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Business basks in shale boom

September 7, 2012
Morning Journal News

YOUNGSTOWN - The second natural gas and shale exposition at the Covelli Centre has put a much finer point on the economic opportunities for the Mahoning Valley and the region.

"You are much closer to a major development of oil and gas than you realize," said David Mustine, the managing director of energy, chemicals and polymers for JobsOhio about the data emerging from the drilling fields.

"We believe it engages the entire state," he told a large audience of industry managers, drilling suppliers and vendors at the three-day Youngstown Ohio Utica & Natural Gas, or YOUNG, Conference and Expo Thursday morning.

Youngstown Mayor Charles Sammarone greeted visitors and participants saying the shale boom is "the next big boom for the Mahoning Valley" while telling visitors "we're interested in your business, in you and your money."

That includes the company with the biggest footprint in the city - V&M Star - that is bringing a sprawling new, state-of-the-art, $650 million facility into play.

Shale and energy show host Denny Malloy told of driving past as it was being built.

"You could see how awesome it is," he said. "The charge (into the shale boom) is being led by V&M Star."

John Mastervich, president and CEO of the seamless pipe manufacturer, said the company "felt strongly that it has "a great opportunity in both Marcellus and Utica shale."

""The emerging shale market and our location fit together in a number of ways," Mastervich said. He expected the plant to be operating at full capacity "toward the end of next year" pushing out pipeline material.

V&M has a $46 million payroll and employment is up 11 percent while it paid $2.4 million in state and local taxes. Mastervich said the plant uses 350 Ohio suppliers including close to 100 from the Youngstown area while hiring people from the immediate area.

During an educational session, Consol Energy General Manager Harry Schurr called the Utica and Marcellus shale plays "gifts" while pointing out the first oil well (Drake) was drilled in Pennsylvania. "Now we're back home with the Utica and the Marcellus," Schurr said to a packed theater and related the impact in unequivocal magnitude-of-scale terms.

By sitting on the two largest shale plays in the continental United States, "It doesn't get any better than that," said Schurr, a key speaker.

Consol Energy acquired 200,000 acres for Utica shale in joint venture with Hess Corp. in Ohio and 628,000 acres in a joint venture with Noble Energy in western Pennsylvania and West Virginia.

It recently opened a "strategically placed" unit office at the International World Trade Center in Leetonia and plans on drilling natural gas and oil wells in Mahoning, Trumbull, Portage and Tuscarawas and other counties.

It employs six people and expects to hire upwards of 20 people at the Leetonia facility.

Mustine said there are still big challenges but Ohio added 111,300 new jobs in the last 18 months and 4,666 in the second quarter of 2102.

He attributed the growth to a "general improvement" in the economy's nine key sectors headed by IT but pointed out the energy industry has invested $863 million not including leases.

He spoke in terms of oil and gas activity noting there have been 360 oil and gas drilling permits issued, 129 wells drilled with 27 producing as of Aug. 22. and 38 rigs in 21 counties.

The breakdown is 18 triple stack rigs (horizontal) and 20 double-stack (vertical).

"The number of permits is growing in 21 counties," he said, explaining there is a focus on Carroll, Columbiana and Harrison counties where 70 percent of the wells have been drilled or permitted and seem to be defining wet gas drilling in the state.

Wet gas has a higher economic value, he said.

"There is still a lot of work to determine how big the play is," Mustine said, adding that Chesapeake, Consol, Hess and Gulfport are here with major oil companies like Exxon-Mobil, Shell, BP and Chevron just getting started.

"The largest companies are just now getting permits and starting to drill. It will be very interesting to see how they engage," Mustine said.

About 115 exhibitors, experts and sponsors with connections to the shale boom participated in the event.

 
 

 

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