Not surprisingly, there was a near full house at the African American Chamber of Commerce for Marcellus Shale Coalition President and Executive Director Kathryn Klaber’s Power Breakfast presentation.
Klaber’s PowerPoint broke down the shale gas drilling process into its component parts to show that there are multiple supply chains, and therefore multiple business opportunities for small and minority-owned companies, depending on their expertise.
The areas she highlighted were site preparation, production, transportation and logistics, water management and piping.
“Actually, if you look at our website, at our 173 members, you can get an overview of the supply chain,” she said.
As for site preparation, Klaber said she expects the pace of well drilling to go from its current 1,743 per year to 3,587 per year by 2020. Each one of those pads requires grading equipment and supplies, sand, gravel, cranes. Each of those suppliers has needs also.
“We have local companies, Cleveland Brother, Eaton, Mine Safety Appliances just in the site prep alone. Who does vehicle maintenance,” she said. “We have attorneys and environmental consultants working with drillers and property owners on property issues including detailed requirements for reclaiming old sites—what do you plant, for instance.”
For production, again sites need cranes, drill bits, steel pipe and concrete. These wells go 5,000 to 9,000 feet down then horizontally for up to a mile.
Logistics and transportation requires roads to be built in some cases, trucks, and asphalt. In one case, said Klaber, an agreement to allow a rail spur to be built will finance the completion of the entire Montour Trail.
Water management, she said, is a large part of these operations because the gas is released through a process called hydraulic fracturing, which pumps water and proprietary mixtures of chemicals into the ground where it breaks up the shale and releases the natural gas.
The coalition has a recycling protocol in place that sees to it that 90 percent of the “flow-back” water is recycled into the next well.
Still, water management requires steel, welding equipment, pumps, hose, chemicals, sand, holding tanks and non-permeable membranes.
Piping will eventually replace the need for some of the current truck and rail transport.
“Only half of the gas we’re mining is being delivered to market,” she said. “Once we are at full production, Pennsylvania will go from a net importer to a net exporter of natural gas. In 2020 we’ll be generating $1.87 billion a year in taxes alone, the value added revenue from these secondary businesses will be $18. 85 billion.”
All this is like a gold rush, Klaber said, because there are multiple supply chains—and therefore multiple purchasing agents–and the operations are scattered across the state. Getting connected can be frustrating.
“There are new hotels, restaurants legal and financial services agencies cropping up in Bedford County,” she said. “When I first stated in environmental consulting years ago, I was monitoring the shut down of plant up there. You wouldn’t know, unless you went there.”
As for local and minority employment related to Marcellus, Klaber said the coalition’s workforce survey would be completed in three weeks.
Greg Spenser, CEO of Randall Enterprises, said he spent his entire career in the energy field, and he would like to see a commitment on the part of some of these suppliers to provide opportunities for minority businesses.
Klaber said she’s seen local purchasing requirements in a growing number of major contracts, and she said the coalition is setting up a supplier portal on its website that will help businesses connect.
“But don’t wait for that,” she said. “Concentrate on what value you bring can bring to the table and finding where that purchase gets made.”
More information on the Marcellus Shale Coalition, its members and operations is available at http://www.marcellusshalecoalition.org.
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