The Pittsburgh Tribune Review reports that colleges located in Western Pennsylvania are creating programs to prepare students for jobs in the energy industry. For example, Kennedy Township’s Rosedale Technical Institute (soon to be re-named Rosedale Technical College) currently offers an industrial technician associate degree program, and it will add additional programs next year. Westmoreland County Community College offers an energy degree program and Butler County Community College recently added four energy classes to its course offerings. Allegheny County and Beaver County Community Colleges also offer classes geared toward the energy industry. According to the Pennsylvania Department of Labor and Industry, shale-related industries employed approximately 238,000 people in 2013.
Thanks in large part to the oil and gas industry, western Pennsylvania is experiencing a boom in job growth which is bringing young and talented individuals to the region. According to the U.S. Bureau of Labor Statistics, Pennsylvania’s oil and natural gas industry employment between 2007 and 2012 increased by 259.3% – accounting for almost 245,000 jobs in Pennsylvania. Of the new hires working in the industry, 96% are from Pennsylvania or an adjacent state. The Young Adults report from PittsburghTODAY notes that roughly 70% of the people moving to Pittsburgh from larger cities are under the age of 35. According to the Department of Labor and Industry, the average wage in the shale industry is nearly $90,000 – almost $41,000 greater than most other industries. A 2014 PNC Financial Services report states that this economic growth can continue to increase in the coming decades.
Natural Gas Intelligence reports that a new truck-to-rail transloading facility owned by Denver-based Concord Energy LLC, has opened in Parkersburg, West Virginia. The facility is capable of handling more than 150,000 bbl of crude oil condensate and natural gas liquids, and is expected to primarily serve E&P companies operating in southeast Ohio and northwest West Virginia. The facility will load light condensates, stabilized condensate, raw natural gas liquids (NGL) and purity NGL products, and includes warehouse space, a lay-down area and its location provides access to highways and the Ohio River. This announcement is the latest in a series of similar facilities that have revived dormant railroads and industrial sites throughout the region.
Oil and gas production increased by 640% from 2012 to 2013 according to a report published by the Ohio Department of Natural Resources. The one year increase was the largest in Ohio history and is the most natural gas that Ohio has produced since 1982. Much of the increase is due to the production of 352 active horizontal wells in Ohio, which have overtaken the production of over 51,000 vertical wells. To date, Ohio has approved 1,386 permits for horizontal drilling with 470 wells in production or capable of production. Officials project that another 700 wells will be drilled in 2014 and 800 in 2015.
The Wall Street Journal reported that MarkWest Energy Partners, L.P. recently announced that a new cryogenic processing facility called Bluestone II will be commenced in Butler County, Pennsylvania. The new facility will increase the processing capacity for Marcellus producers in northwest Pennsylvania to 210 million cubic feet per day. MarkWest Energy Partners, L.P. is involved in gathering, processing and transporting natural gas and the fractionation, storage and marketing of natural gas liquids.
The Ohio Department of Jobs and Family Services released its quarterly report on the shale industry last Friday. The report shows a 79% increase in core shale-related industry employment in Ohio over the last two years, with an additional 1.5% increase in ancillary jobs, such as trucking services and geophysical surveying. Areas of particularly significant growth include pipeline construction and fossil fuel electric power generation. An accompanying analysis of wage growth shows that the average wage for core industry employees was $27,003 greater than the average wage for industry jobs across Ohio. The number of businesses providing core shale services has also increased, from 610 core businesses in 2011 to 737 in 2013. A pdf of the full report can be viewed here.
.
Plans by Moundsville Power LLC to build a natural gas power plant were approved by members of the Marshall County Commission on April 22, 2014. The proposed 549 megawatt natural gas power plant is considered the first “downstream” project of its kind in West Virginia, is expected to use more than $100 million worth of natural gas per year, and will replace recently closed and retiring power plants in the area. As planned, the plant will generate power 24 hours a day and enough electricity to power approximately 549,000 homes. Current plans for construction are expected to begin in 2015 to bring the plant online in 2018, with the estimated cost of the plant to be $615 million. The project still requires state and federal approvals prior to development.
Utica East Ohio Midstream (“UEO”) recently purchased two buildings in downtown Salineville, Ohio. The company owns natural gas processing plants in nearby Kensington and Leesville. UEO plans to use the buildings for administrative offices for its oil and gas operations in the area. A company spokesman says that the purchase of the buildings solidifies UEO’s presence in the community. They estimate that 40 people will be working in the buildings.
As Reported by MetroNews on March 26, the proposed Wood County, West Virginia, petrochemical “Cracker” plant project, called Project Ascent, took a significant step forward on Wednesday with an announcement from Antero Resources that it would contribute 30,000 barrels of ethane per day to the proposed plant, which represents approximately one half of the ethane needed to operate the plant. The proposed Cracker plant will use ethane to manufacture polyethylene, which is used to making various plastics. Further information on the agreement between Antero and Ascent is expected to be announced on Wednesday, March 26, at the West Virginia Manufacturers Association’s Marcellus to Manufacturing Ethane Development Conference being held at the Charleston Civic Center in Charleston, West Virginia.
The Charleston Daily Mail reports that a 130-foot, 255 ton de-ethanizer tower was scheduled to arrive at the Williams Energy Oak Grove site in Marshall County on Monday or Tuesday. The tower is the second of three “Superload” installments being delivered to the Williams Energy site and indicates the growing impact of Marcellus and Utica Shale development on West Virginia. According to The Intelligencer/Wheeling News-Register, the de-ethanizer strips ethane from the natural gas stream prior to pipeline transport. In its processed form, ethane is a Natural Gas Liquid (NGL) and can be used to make plastics and medical and chemical products. The de-ethanizer is the first at the Oak Grove site and the third in Marshall County. The stripped ethane will likely be shipped via pipeline to the Gulf Coast or to Canada. That may change, however, if the proposed Cracker Plants in Beaver County, Pennsylvania and Wood County, West Virginia are completed.
The Pittsburgh Business Times reports that the Beaver County Board of Commissioners and representatives from Royal Dutch Shell met to discuss the next planning steps for the proposed cracker plant in Beaver County, Pennsylvania. Although the meeting did not result in a final decision as to whether the company will build the plant, the commissioners and representatives discussed relocating a portion of a highway, power lines, a rail line and developing a dock. Shell began demolition activities at the former Horsehead site in February. It has also begun to secure feedstock supply for the plant by securing agreements with CNX Gas Co. LLC, Hilcorp Energy Co., Noble Energy Inc. and Seneca Resources Corp.
As reported by Pittsburgh’s NPR News Station, 90.5 WESA, three advocacy groups, Leaders of Policy Matters Ohio, the Pennsylvania Budget and Policy Center, and the West Virginia Center on Budget & Policy, sent a letter to the governors of Ohio, Pennsylvania and West Virginia requesting a common severance tax for oil and gas production in all three states. These advocacy groups suggest that the purpose of a common severance tax would be to provide consistency in the industry allowing each state to similarly benefit from the economic opportunities created by oil and gas production. The letter asserts that a common policy would provide long-term predictability and take taxing out of the competitive equation between the states. The letter recommends that West Virginia’s severance tax should be set as a minimum rate, as it is in the middle range of taxes in gas-producing states.
As reported in the Pittsburgh Business Times, the proposed ethane cracker plant near Parkersburg, West Virginia, could potentially have a multi-billion dollar positive effect on the state’s economy. Emeritus Professor of Economics Tom S. Witt of West Virginia University authored a report, entitled “Building Value from Shale Gas: The Promise of Expanding Petrochemicals in West Virginia,” wherein he analyzed the short and long term impact of the proposed facility on West Virginia’s economy. Based upon the conclusions of Professor Witt’s report, the construction and operation of the proposed ethane cracker plant could generate a total of 19,710 jobs, representing employee compensation of $1.047 Billion and total economic output of $2.261 Billion. Professor Witt, in his report and in an interview with the Charleston Daily Mail, gives specific policy and legislative recommendations for West Virginia to successfully attract large scale projects, such as the ethane cracker.
The West Virginia Senate unanimously passed Senate Bill 461, known as The Future Fund Bill, on February 21st. The Bill, as described in an Associated Press story published in the Charleston Gazette, would create a new fund that would be financed by 25 percent of the severance tax revenues collected from oil and gas exploration companies above a $175 million threshold. The fund would accrue interest for six years before it could be used to finance economic development projects, building infrastructure and increases in teacher salaries. As described in a Shale Energy Law Blog post from last September, the Bill was inspired by legislation passed in North Dakota that created that state’s Legacy Fund, a fund financed by extraction taxes that can be used to finance projects after 2017. The Bill must now be approved by the West Virginia House of Delegates.
West Virginia State University has developed a new academic program designed to educate the next generation of oil and gas employees, developers, and industrialists in the Appalachian region. WVSU now offers a Concentration in Energy Management associated with its Bachelor of Science degree in Business Administration. This new concentration is designed to expose student to several industry topics which may not typically be included in Business Administration curriculum, including emphasizing communication skills, studying energy financial markets, personnel management, and accounting. This partnership between industry heavy-weights and WVSU promises to offer a fruitful collaboration benefiting both the students and the State of West Virginia.
For more information regarding the Energy Management Concentration, call (304) 766-3065.