The first round of the grants announced this week totaled $6.7 million, with 18 companies and organizations from 15 counties receiving funding.

Here’s what newspapers and media outlets across the commonwealth are reporting in today’s papers:

• Blair County Benefiting from Act 13 NGV Grants. “As part of a legislative effort to develop shale gas infrastructure, energy independence and environmental responsibility, the state has awarded grants to help two Blair County companies each buy 12 natural gas vehicles. The Department of Environmental Protection has allocated $288,000 to Burgmeier’s Hauling for compressed natural gas trash trucks and $300,000 to Smith Transport for 12 liquefied natural gas vehicles. The local money is part of a $6.7 million allocation from impact fees from gas operations that will fund 18 projects statewide, according to a DEP news release. … Compressed natural gas is about 20 percent cheaper as a fuel than diesel… and is less volatile in price. It results in lower pollutant emissions…the trucks are also quieter.” (Altoona Mirror, 5/17/13)

• Waste Authority in Lancaster County to Purchase 14 New Trucks, Thanks to Act 13 Revenue. “Lancaster County Solid Waste Management Authority has received a $350,000 state grant to help fund switching its fleet to natural-gas power. The grant, announced Thursday, will help pay for 14 new trash-transfer trucks fueled by compressed natural gas… In a related move, LCSWMA also is installing a natural-gas fueling station at its transfer station complex on Harrisburg Pike. The station will be used by its fleet, the authority’s customers and select groups including businesses and government organizations. The total cost of the new vehicles and fueling station is estimated to be $4 million. The 14 new trucks will cost $1.5 million; the fueling station will cost $2.5 million, an authority spokeswoman said.” (Lancaster Intelligencer Journal, 5/16/13)

• Philadelphia, Delaware County Organizations Receive $1M in Act 13 Dollars for CNG Vehicles. “About $1 million in Marcellus Shale money will make its way to the Philadelphia area to subsidize the purchase of natural-gas-fueled school buses and trucks. The Pennsylvania Department of Environmental Protection awarded a total of $6.7 million in grants Thursday to 18 organizations selected from among 49 applicants. … The grants, which will support the purchase or conversion of 288 heavy vehicles across the state, are financed from the $206 million collected last year from the Marcellus Shale impact fee. …The $499,994 award to the Rose Tree Media schools will help reduce the $4.8 million cost for the district to covert 14 existing diesel buses to compressed natural gas (CNG), and to buy eight new CNG buses. … The CNG vehicles are expected to save at least $1 million over 20 years in lower fuel costs. “In addition to the savings,” said Superintendent James M. Wigo Sr., “we are committed to contributing to the clean-air efforts in Delaware County and the commonwealth.” (Philadelphia Inquirer, 5/17/13)

• Cambria County Trucking Firm Receives Act 13 Funding for CNG Vehicles. “A Cambria County trucking company and a Blair County-based trash hauler with customers in Cambria and Somerset counties are big winners in money handed out by the state from the Marcellus Shale impact fees. … The grant program is significant because the more trucks running on compressed natural gas will result in refueling stations that will open the door for passenger vehicles, said state Sen. John Wozniak, D-Westmont. “This helps in a big way toward increasing demand for refueling stations,” Wozniak said Thursday… “We also have to promote new markets for natural gas, and Act 13 set aside money to accomplish it…” The Marcellus Shale Coalition, an industry-based group formed to promote development of the unconventional gas industry, views the grants as proof of the benefits of Marcellus drilling. “These grants further demonstrate the far-reaching benefits of Marcellus Shale in communities across the commonwealth,” coalition spokesman Patrick Creighton said.” (The Tribune-Democrat, 5/16/13)

• Natural Gas Station Under Construction in Allegheny County. “Natural gas production continues to increase across Western Pennsylvania. As a result, more companies are looking at compressed natural gas as the vehicle fuel of the future. Part of Act 13 of 2012 provides millions of dollars in oil and gas generated funds for converting commercial vehicles to natural gas. Burgmeier’s Hauling is one of the local companies benefitting from the program. … work is under way on a new fueling station for large commercial trucks…The new fueling station is part of a vehicle conversion to compressed natural gas effort that will cut costs and benefit its customers. … Burgmeier’s will be using $300,000 to help with the purchase of twelve new compressed natural gas refuse trucks. In addition to being quieter and more efficient, the new trucks are expected to provide a significant environmental benefit.” (WTAJ-TV, 5/16/13)

# # #

PITTSBURGH – For companies looking to break into the natural gas business here, a Marcellus Shale Coalition membership is key.

Four years ago, MSC was little more than an informal umbrella over a smattering of energy companies exploring the Marcellus Shale’s potential to yield natural gas. Today, the industry group is a 300-member, five-office powerhouse that has made itself a household name in the region that birthed the U.S. natural gas boom and brought new wealth and prosperity to drilling communities. It counts Marcellus drilling giants like Chesapeake Energy Corp. and Cabot Oil & Gas Corp. among its members.

Because of its unusual setup — MSC’s focus is on companies operating in a particular energy play, rather than in a certain state — the coalition has extended its reach to residents and industry in not only its home base of Pennsylvania, but also West Virginia, Ohio and New York.

Kathryn Klaber, MSC’s first CEO, is the driving force behind the coalition’s growth.

“From the beginning, we knew that outreach and education would be important,” MSC CEO Kathryn Klaber said.

Klaber, a native Pennsylvanian who answers to Katie, is the coalition’s first CEO. Unlike many of her peers at other energy industry groups, she didn’t come from the energy business.

Before joining MSC in 2010, Klaber was executive vice president for competitiveness at the Allegheny Conference on Community Development, executive director of the Pennsylvania Economy League and an employee of consulting firm Environmental Resources Management Inc.

Klaber called those roles a “good prequel” to the work she’s doing with MSC because those jobs exposed her to the economic challenges Pennsylvanians face and the health, safety and environmental rules to which local businesses must adhere.

As MSC CEO, Klaber, 47, works closely with the organization’s executive board, listening to members and attempting to execute their priorities. Over the organization’s four-year existence, that has become an increasingly onerous task as the group’s membership has grown from about 40 to 300 companies, running the gamut from oil and gas producers to local businesses that are providing support services for Marcellus Shale development.

“This is not your grandfather’s trade association,” said MSC spokesman Travis Windle.

The supply chain integration model is one that is increasingly popular among energy industry groups, including MSC’s sister organization, the Colorado Oil and Gas Association.

COGA President Tisha Schuller, who came into her post around the same time Klaber joined MSC, said she’s been impressed with the coalition’s reach.

“In just a couple years, it’s like they’ve been around for decades,” she said.

Schuller added that Klaber’s role in the coalition has been critical to its success.

“Katie Klaber is a really dynamic and strong leader, and I’m really impressed by her,” Schuller said. “She has quite a unique skill set and is positively a force to be reckoned with.”

‘Connectors’

Because MSC’s 15 staff members are spread across five offices and spend a lot of time in the field, coalition headquarters, located on a winding road in a business park near Pittsburgh International Airport, is far from bustling.

But its phone lines are busy.

For the people who call in to ask questions such as “Where’s my royalty check?” or “How can my son get a job?” Klaber said MSC’s staff members see themselves as “connectors” who can provide critical information.

Windle offered one example of a call that came into the office in late March.

Meetings at MSC’s Pittsburgh headquarters provide key networking opportunities for energy companies and support service providers.

“I spent probably 45 minutes on the phone with a nice older woman from the Youngstown [Ohio] area, and she had questions about seismic, and she was calling the ‘Marcellus Shale.’ People might say, ‘I hear Marcellus Shale, I read about it in the newspaper; I’m going to Google that,” he said. “Who comes up? We do.”

In the case of community members worried about the health, safety and environmental impacts of drilling and hydraulic fracturing, the technology used to extract gas from shale, MSC often arranges rig tours.

“Those tours are the best way to really have a more productive conversation because you see how this works,” Klaber said. “You see how complex it is.”

She said she only wishes she could get all 12.7 million Pennsylvanians on a tour.

While public questions aren’t MSC’s focus, part of its role is to engage and educate the wider community to help the industry operate more efficiently, Klaber said.

How does the coalition do it?

“Just like the energy strategy: all of the above,” said Steve Forde, MSC’s vice president of policy and communications.

Using YouTube videos, speakers series, an online Ask About Shale forum and other techniques, the coalition has attempted to reach every corner of the region affected by Marcellus activity.

Forde said he was surprised by the success of a recent 11-minute YouTube video explaining methane migration.

“To register as a YouTube hit, you’ve got to watch it the whole way through, and even I didn’t make it through the first couple of times. But in the first week, we had like 1,100 full views on something that’s very, very technical,” Forde said.

Klaber added that the video’s popularity demonstrated a hunger for information about drilling.

“We thought, ‘Wow, people really do want to learn,’” she said.

Environmental debate

To some in the environmental community, though, MSC’s methane video and other educational materials are a form of industry propaganda.

Jeff Schmidt, director of the Sierra Club’s Pennsylvania chapter, was critical of MSC’s support of a part of Act 13, the 2012 Marcellus Shale drilling law that says state regulations supercede local authority to control gas operations. The coalition and other industry groups say they oppose local regulation because of its fragmented nature. Businesses need consistency to operate effectively, they say.

“The coalition’s goal is to change the subject from the problems and simply focus on economic benefits,” Schmidt said.

Klaber said the coalition has worked to take a proactive role in Marcellus Shale issues and tried to withhold from fighting tooth and nail against new rules and regulations.

Pennsylvania Department of Environmental Protection spokesman Kevin Sunday said MSC has been instrumental in industry communications. When Gov. Tom Corbett (R) two years ago called on the oil and gas industry to stop sending its waste to facilities discharging into waterways, DEP reached out to the coalition.

“We called on the industry and particularly the MSC,” Sunday said. They “complied overnight.”

Through its committee structure and monthly meetings, MSC gives its board members — producers and midstream companies — and its associate members — the legal experts, environmental consultants, road repair professionals and others who facilitate the drilling process — the chance to collaborate on best practices for oil and gas extraction in the Marcellus.

Associate member Accutest Laboratories, an engineering consulting firm, was involved in recent recommendations for companies to conduct pre-drilling groundwater sampling near wells to provide a base line for comparison in the event of later pollution allegations.

“[MSC takes] a proactive role in what I’ve seen in determining any issues or addressing any part of it,” said Accutest Technical Director Kesavalu Bagawandoss. “They want to make sure the right things are done in a responsible manner.”

The coalition’s best practices are the heartbeat of the organization’s efforts to push member companies and even energy firms outside its membership to go above and beyond state drilling regulations.

“This is a challenge across lots of businesses, but ours in particular, that we have allowed ourselves as a business community to come across as not environmentally sensitive where it’s the exact opposite,” Klaber said. “There’s more protection of the environment happening from within the varied industries that design and build and operate these processes. You look through our membership roster, and there are more engineering degrees and civil and environmental and chemical — all the technical aspects that make sure we do this in a protective manner.”

But the best practices supported by MSC and other oil and gas industry groups don’t hold operators accountable, allowing them to pick and choose to what extent they would like to protect the air and groundwater, said PennEnvironment spokeswoman Erika Staaf.

“From what I see, the main point that they try to drive home is related to economy and jobs because they see that it’s a strong argument they can make,” she said. “It seems to me they might minimize the environmental dangers.”

Staaf added that greater support from the coalition on environmental regulations could “raise the basement rather than just the ceiling” for the industry.

MSC’s future

With the environmental debates and price issues — natural gas recently began a slow price recovery after overproduction forced rates to 10-year lows — surrounding Marcellus Shale development, Klaber said she sees the industry as one that is very much in flux.

Although MSC plans to keep its play-specific name, the staff there sees a role for itself in guiding development in Ohio’s Utica Shale and other emerging energy fields in the region. Still, Klaber said she wants to keep the coalition’s focus on the Marcellus, where she believes there will be work to do for years to come.

“If we keep chasing the next shale play, that’s all we’ll be doing,” she said.

Despite some safety and environmental concerns, the public is still largely interested in how it can stake its claim in shale prosperity, Klaber said.

“As that awareness of that opportunity has grown, different agencies see a role for their own missions in it,” she said.

Fostering that interest is part of MSC’s future.

“We realize that as people go along that education curve, the support level goes up. But Pennsylvania is 12.7 million people, and it takes 45 minutes to talk to one woman about seismic in Ohio,” Klaber said, hearkening back to Windle’s call.

“It’s not going to happen overnight.”

NOTE: Click HERE to view this story online.

“The responsible development of natural gas from the Marcellus Shale is a once-in-a-lifetime opportunity for our entire region. To fully realize these shared environmental, economic and security benefits demands broad-based engagement with policymakers, elected leaders and regulators,” said Kathryn Klaber, chief executive officer of the MSC. “Jim’s more than two decades of experience working collaboratively with public officials on complex issues will serve our members well by advancing common sense solutions aimed at protecting our environment, generating jobs and revenue, and long-term energy security and affordability for the Commonwealth.”

Prior to joining the MSC, Mr. Welty served as a government relations professional at Buchanan Ingersoll & Rooney and K&L Gates, where he represented a diverse set of clients in Harrisburg. Mr. Welty, who resides in Cumberland County, also served as vice president of legislative and corporate affairs at the Pennsylvania Chamber of Business and Industry, the commonwealth’s largest business advocacy organization and was the Pennsylvania state director for the National Federation of Independent Businesses (NFIB).

“Jim is a respected professional who has deep experience working with both Democrats and Republicans to advance meaningful, impactful outcomes,” continued Klaber. “We look forward to his leadership in advocating on behalf of our approximately 300 member companies to ensure that we continue to get this historic opportunity right.”

Welty joins the Coalition’s management team, led by Klaber, working alongside Andrew Paterson, vice president, technical and regulatory; Steve Forde, vice president, policy and communications; and Robert Petrilli, vice president, finance and administration; and will work closely in Harrisburg with Amber Benzon, director, government affairs.

And leaders in Washington, DC, as well as across the world, are keeping a watchful eye on these game-changing energy security, economic and environmentally positive developments, which continue to be driven by innovative, safety-first solutions.

Yesterday, in fact, the U.S. House of Representative’s powerful Energy & Commerce Committee held a hearing entitled U.S. Energy Abundance: Exports and the Changing Global Energy Landscape. The hearing focused on common sense liquefied natural gas (LNG) export policies aimed further leveraging America’s abundant shale gas resources in a way that will continue to benefit our economy, consumers, small businesses and manufacturers, our nation’s trade balance and security, as well as key U.S. allies and trading partners.

The committee’s chairman, Congressman Fred Upton of Michigan, said: “To think that America, in just a short period of time, would be at such a strategic advantage to use our resources to not only help our country domestically with new jobs and energy security, but to also influence Russia’s ability to wield an energy weapon over its European customers, is truly remarkable.”

What follows are key excerpts from the hearing.

Congressman Ed Whitfield (Ky.), Energy and Power Subcommittee Chairman

• America’s energy abundance is creating employment opportunities and growth at a time when little else in the economy is going as well – and that alone is enough reason to support domestic energy production.
• Thanks to American innovations in hydraulic fracturing and directional drilling that is expanding the supply of domestic oil and natural gas. Instead of being beholden to energy exporting nations, we are fast becoming one ourselves. Perhaps nowhere is the reversal more stark than with natural gas.
• By taking advantage of these export opportunities, we can help our own economy and at the same time strengthen our ties with key allies.

Former U.S. Sen. Bennett Johnston (La.)

• The Department of Energy in its latest annual report projected a 100-year supply of natural gas with, by 2040, a growth in natural gas production of 40% and a growth in consumption of only 20%. … A study commissioned by DOE concluded that exports of natural gas would not appreciably increase the price.
• The free market might not always lead to everyone’s definition of the sweet spot, but experience has shown that it is a better allocator and regulator than bureaucrats and politicians. We should heed the admonition of Adam Smith that demand begets supply: Allow the free market to allocate the nation’s newfound energy bounty.

Bipartisan Policy Center co-chair and Former U.S. Sen. Byron Dorgan (N.D.)

• Domestic oil, natural gas, and renewable energy production are up, while energy imports are down; new energy development is driving a jobs boom in many parts of the country; and lower energy costs are helping the U.S. manufacturing sector recover. … Thanks to this combination of positive supply and demand trends, our nation is arguably more energy secure than it has been in more than a generation.
• The recent boom in domestic energy production, much of it linked to the advent of more sophisticated drilling technologies—such as hydraulic fracturing—that have made it economic to develop unconventional resources such as shale gas, is already spurring new investments and growth opportunities, particularly in industries that can take advantage of lower cost natural gas.
• We believe that the opportunity to increase U.S. energy exports reflects one of the important economic upsides of our nation’s newfound energy abundance. … Expanded exports will improve the U.S. balance of trade, support local and regional economies, and increase the U.S. presence in global energy markets – and do so without harm to the environment or to U.S. consumers and businesses.

Mike Halleck, President Executive, Columbiana Co., Ohio Board of Commissioners

• Why not pursue exportation to countries that we have open trade with. It would seem to me that not only would this stabilize prices, but give the United States a different standing in the world and make a statement of energy independence. … Common sense would tell me that if we are exporting more product abroad, there will be a need for more production, thus more workers needed for this production.

Amy Jaffe, Director, Energy & Sustainability, UC Davis Graduate School of Management

• The United States has for many decades been the leading nation in championing open markets and free trade in energy. Open trade and investment in energy is important to U.S. vital interests for many reasons. … As American shale production expands from natural gas to oil, the geopolitical benefits will mushroom both by improving U.S. financial strength and by eliminating U.S. vulnerability to economic blackmail.
• To the extent that energy exports improve our global financial footing, it will not only give us an upper hand with China, which will still be highly dependent on foreign oil imports, but also allow the United States the luxury to regain its strong influence as a donor to global institutions such as the World Bank and United Nations, again enhancing our national power and influence.

Have natural gas-related questions? We encourage you, and others, to visit LearnAboutShale.org.

Spearheaded by Ben Franklin Technology Partners’ Shale Gas Innovation & Commercialization Center, this year’s program highlights three winners from 12 finalists at an event held today in Washington County, Pa. More than 70 applicants entered this year’s contest for the opportunity to win $75,000 in prize money.

“Innovation, research and technological advancements have been, and continue to be, the catalyst for shale gas development’s sustained success,” said MSC chief executive officer Kathryn Klaber. “The companies honored today as finalists, as well as the other 70 applicants, should be proud of their work, and we commend their efforts to further improve the safe, productive, and cost-competitive development of this world-class resource. Without forward-looking thinkers and companies willing to invest in new technologies, the natural gas revolution that we’re witnessing today would not have been possible.”

The MSC, through its Research Collaborative, has been an active partner with the Shale Gas Innovation & Commercialization Center for the past three years. At the MSC’s annual SHALE INSIGHT ™ conference, a Technology Showcase forum provides companies the opportunity to formally demonstrate and actively market their services to natural gas industry officials. Companies interested in presenting at SHALE INSIGHT™ 2013 should visit www.shaleinsight.com for additional information on this year’s Technology Showcase.

Read more about technology driving America’s energy resurgence, as reported last week by the Associated Press:

• Technology created an energy revolution over the past decade – just not the one we expected. … Oil companies big and small have used technology to find a bounty of oil and natural gas so large that worries about running out have melted away. New imaging technologies let drillers find oil and gas trapped miles underground and undersea. Oil rigs “walk” from one drill site to the next. But while the national focus was on alternatives, the oil and gas industry was innovating too. New technology allowed drillers to do two crucial things: find more places where oil and gas is hidden and bring it to the surface economically. … Onshore, small drillers learned how to pull oil and gas out of previously inaccessible underground rock formations.” .. “It has made possible things that were unthinkable 10 years ago…”

# # #

This is great news for every Pennsylvanian. However, the story failed to inform your readers of the key and growing role that clean-burning natural gas continues to play in enhancing our region’s and the nation’s air quality.

Here are the facts. As the Post-Gazette reported in February, Pennsylvania’s air pollution “has declined significantly since 2008” due to the “increased use of natural gas for power production, according to the state Department of Environmental Protection.” CNN reported that “increased natural gas production in the U.S. will be a huge driver in improving air quality.” And further, the American Lung Association’s Kevin Stewart told the Citizen’s Voice natural gas-fired power plants have “also helped reduce air pollutants” in the region.

The increased use of clean-burning natural gas is proving critical in addressing and achieving improved air quality in Pennsylvania and across the nation.

Kathryn Klaber, CEO
Marcellus Shale Coalition
Pittsburgh, Pa.

NOTE: Click HERE to view this letter online.

Reinforcing this positive economic impact further, the Manhattan Institute for Policy Research released a study today entitled Economic Effects of Hydrofracturing on Local Economies: A Comparison of New York and Pennsylvania, offering a snapshot of the regional impact of safe, tightly-regulated natural gas development.

Here are key excerpts of this new study:

• Pennsylvania counties with hydrofractured gas wells have performed better across economic indicators than those that have no wells.
• Between 2007 and 2011, per-capita income rose by 19 percent in Pennsylvania counties with more than 200 wells, by 14 percent in counties with between 20 and 200 wells, and by 12 percent in counties with fewer than 20 wells.
• Counties with more than 200 wells added jobs at a 7 percent annual rate over the same time period.
• Using the Pennsylvania data to project hydrofracking’s effect on New York counties, we find that the income of residents in the 28 New York counties above the Marcellus Shale has the potential to expand by 15 percent or more over the next four years—if the state’s moratorium is lifted.
• Our data also suggest that had New York allowed its counties to fully exploit the Marcellus Shale, those counties would have seen income-growth rates of up to 15 percent for a given four-year period, or as much as 6 percent more than they are experiencing.
• Even at levels of development far below the maximum, our analysis estimates that billions of dollars could accrue to local economies if hydrofracturing is permitted in New York State.
• We have shown that Pennsylvania counties with hydraulic fracturing had higher economic growth rates than those without. The results also reveal that a greater number of wells correlated with a higher rate of economic growth.
• [Results] suggest that over the past decade, had New York State counties on the Marcellus Shale been allowed to use these resources, economic growth would have been substantially higher—at up to 15 percent for a given four-year period, or 6 percent greater than would otherwise be expected. This corresponds to a potential $8 billion in extra income in upstate New York.

And today’s study follows last week’s Small Business and Entrepreneurship Council report, which focuses on The Benefits of Natural Gas Production and Exports for U.S. Small Businesses [click HERE for Pa.-specific economic impacts]. The study underscores the significant benefits tied to natural gas development for our nation’s small businesses, in particular as it relates to job growth. Further, according to the report, a common sense U.S. natural gas export policy would be a “net positive resulting in greater U.S. natural gas production, increased investment, enhanced GDP growth, rising incomes, and more jobs.”

In a release, Raymond J. Keating, chief economist for SBE Council and author of the report, said:

“The tremendous increase in domestic natural gas production has been a boon for small business and job growth in the energy sector in recent years. Looking ahead, growth opportunities for small businesses and employment in the U.S. energy sector look bright due to increased natural gas demand, including in international markets. The opportunity exists for exporting liquefied natural gas (LNG). Expanded demand for U.S. natural gas internationally will be a net positive, resulting in greater U.S. natural gas production, increased investment, enhanced GDP growth, rising incomes, and more jobs.”

Fact-based reports like these – demonstrating that science continues to prevail – play an important role in understanding the overall impact and benefits associated with safe, American shale gas development. Please visit LearnAboutShale.org for more natural gas-related information, and join the online conversation by using #LearnAboutShale. We hope to hear from you soon!