On behalf of the 5,000 member businesses and organizations — employing 140,000 people — the Greater Lehigh Valley Chamber of Commerce recognizes the economic benefits and opportunity for energy independence that shale gas formations can bring to Pennsylvania’s businesses, commerce and communities.

What does the Marcellus Shale industry mean to the Lehigh Valley and all of Pennsylvania?

Aside from a handful of groups that rely on permanent crisis for support, people in this state realize the importance of this new energy resource. The natural gas being extracted from the shale two miles underneath us is providing jobs, energy independence and, to the surprise of many, tax revenues — $1.4 billion in state and local taxes during 2009-10 alone.

Some critics talk about how Gov. Tom Corbett should make the drillers “pay their fair share.” But what does this term, “fair share,” mean?

Is it the more than $76 billion that shale gas contributed to the gross domestic product in 2010 that is expected to increase to $231 billion in 2035?

Or the 600,000 jobs the industry supported in 2010 — expected to grow to more than 1.6 million by 2035?

Or is it the spinoffs that have created a boom in support industries, ranging from engineering to environmental services to pipe manufacturing to residential and commercial construction?

When critics say “fair share,” they mean they want dollars from the prosperous gas industry to pay or subsidize other industries and projects. Some critics are falsely saying the state is providing billions in subsidies to the fossil fuels industry. Some are saying to focus subsidies on expensive renewable sources of energy. But what about the impact on commonwealth families?

Philadelphians are already enjoying lower energy bills. In the Lehigh Valley, engineering firms and support businesses are expanding because of jobs in the Marcellus fields — while reducing carbon emissions. With record low prices and home heating bills that have dropped by 40 percent this winter, some folks still think another tax will solve our problems.

On behalf of the 5,000 member businesses and organizations — employing 140,000 people — the Greater Lehigh Valley Chamber of Commerce recognizes the economic benefits and opportunity for energy independence that shale gas formations can bring to Pennsylvania’s businesses, commerce and communities. We also understand the need to protect our environment, natural resources and infrastructure from adverse consequences from developing and extracting shale gas.

What “fair share” should mean is a per-well impact fee — precisely the approach the Corbett administration and the Legislature have been discussing — not an additional tax. The impact fee would focus money on the towns and counties that actually host the drilling sites, ensuring repairs for wear and tear on the area and underwriting increased environmental enforcement.

But the value of the industry extends beyond the impact fee. As a jobs report by President Obama’s administration put it: “Of the major fossil fuels, natural gas is the cleanest and least carbon-intensive for electric power generation. By keeping domestic energy costs relatively low, this resource also supports energy intensive manufacturing in the United States.”

The Chamber believes that an impact fee on natural gas extracted from shale gas formations should be established, subject to the following conditions:

• This fee should be used solely to address direct and indirect impacts, both present and future, associated with natural gas extraction. This includes, but is not limited to, remediation of environmental contamination, infrastructure repair and maintenance, public safety issues, and increased regulatory agency costs associated with properly overseeing the associated industries, and a reasonable fund to address non-recoverable and unexpected costs that are not otherwise covered by responsible parties.
• This fee should be imposed, collected and managed at the state level so that all impacts, including those that may occur “downstream” from well locations, may be addressed in an equitable and consistent manner.
• Funds raised through this assessment should not be added to the state’s general fund nor be available for any other purpose, but instead should be set aside in a trust fund and used solely for purposes outlined above.

Slowly, everybody’s catching on. In Pennsylvania, we got this one right. The Chamber encourages its current and future members to explore the business opportunities Marcellus Shale presents to Pennsylvania.

The members of the Greater Lehigh Valley Chamber of Commerce are committed to working with Gov. Corbett’s administration, our public officials and the gas industry to ensure all Pennsylvanians prosper and grow for generations to come.

T. Anthony Iannelli is president and CEO of the Greater Lehigh Valley Chamber of Commerce.

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Regardless of your position in the debate over using hydraulic fracturing to develop shale gas resources, here’s something we can all agree on: New York state needs an economic jump-start. Local businesses that have supported communities for years are now struggling to survive.

Fortunately, that’s not the case at RETTEW Associates Inc., an engineering firm based in Lancaster, Pa. In recent years, the demand for engineering, surveying and environmental consulting services in Pennsylvania has increased tremendously as the oil and gas industry relies more heavily on local businesses. In the midst of this challenging economic environment, RETTEW is not only surviving, but thriving. At a time when companies in other states are laying off workers, we are proud to be hiring hardworking men and women from Pennsylvania to support our business. A few “real world” examples of the kind of economic benefits shale gas can provide:

» Added more than 200 new jobs since June 2010.

» Expanded our facilities, which generated more than $4.5 million for local contractors and other vendors.

» Purchased 75 new vehicles to support our growth.

» Established a charitable giving fund of $100,000 and have participated in numerous local charity events, including “Relay for Life” and local food banks.

» Created a scholarship endowment at Penn State University.

Why is this important to New Yorkers? Because this same economic prosperity can be realized here if we are able to expand our existing employment base at our New York offices in Delaware and Sullivan counties through the development of shale gas resources. We stand ready, as so many other local businesses do, to be part of New York’s economic revitalization.

Achieving economic gains without addressing environmental considerations is unacceptable, but protecting our land and water and improving our economy are not mutually exclusive goals. That’s why Gov. Andrew Cuomo and the New York Department of Conservation extended the comment period until Jan. 11 and will continue studying the most responsible and safe way to regulate shale gas development that both protects the environment and provides economic opportunities for New Yorkers in desperate need of employment.

But now many cities in New York have proposed or approved moratoriums on shale gas development that could stifle future economic growth. The effect on our business and others could be devastating.

We believe local governments should work with the state to find regulatory solutions that protect human health, preserve the environment and stimulate local economies. Hanging in the balance is the health and future growth of our business, hundreds of new jobs and millions of dollars in tax revenue that ultimately flow back into the community to avoid teacher layoffs at local schools, ensure our libraries remain open, provide much- needed equipment to our fire departments and promote the continuation of city services.

At a time when the economy is struggling to rebound and so many businesses are in need of a lifeline, halting shale gas development is not the answer.

Lauriello is president of RETTEW.

NOTE: Click HERE to view this column online.

U.S. Rep. Bill Shuster, a Republican representing the 9th Congressional District, said the Marcellus shale gas drilling industry offers a tremendous opportunity to revitalize the economy and create jobs in Fayette County and throughout Pennsylvania.

But as the gas drilling industry continues to grow, Shuster stressed the importance of making sure companies comply with state and federal guidelines so the environment continues to be protected.

“I want to make sure there are good-paying jobs in this area,” he told a crowd of about 100 people who gathered at the AMVETS Post 103 in Hopwood on Thursday.

“The population has been declining in Pennsylvania. Young people are leaving because we don’t have enough jobs,” Shuster added. “I also want to make sure that businesses stay in Pennsylvania.”

Fayette County will serve as the center of the Marcellus shale industry in Pennsylvania, Shuster said, because “this is the place with the wet gas, and that’s what they need.”

“But as the industry grows, I want to make sure the gas companies don’t stray away from responsible drilling practices,” he said to applause.

Although states like Oklahoma and Texas have embraced the oil and gas industry and its pipelines for many years, Shuster said, the industry is new to Pennsylvania and people are concerned.

“I understand why people are concerned,” the congressman said. “When they took the coal out of here, we had polluted streams. We want to make sure that doesn’t happen again.”

In the past, Shuster said, Pennsylvania was a very powerful state with a strong economy because of its coal, steel, timber and other booming industries.

“The gas industry gives us an opportunity to revitalize ourselves,” he said. “Pennsylvania could once again become a very powerful state.”

Shuster represents only the eastern portion of Fayette County, including the Hopwood area and the South Connellsville area.

He explained the 9th Congressional District in Pennsylvania could expand to include Fayette County and parts of Washington and Greene counties if redistricting is approved.

“I certainly hope that I can earn your support if I become your congressman,” he said. “I have a commitment to working hard. Pennsylvania lost a congressional seat due to the declining population, and that’s why redistricting had to be done.”

If redistricting takes place, U.S. Rep. Mark Critz, a Democrat, will no longer represent Fayette County.

Shuster said he remembers the first time he came to Fayette County 10 years ago.

“When I was driving through the mountains on my way here today, I saw the National Pike Water Authority, which was one of the first projects I worked on in Fayette County,” he said. “I drove past the Hopwood streetscape project, and I had fond memories of working on that project.

“I care about Fayette County,” he added. “It is a fantastic place. You have Fallingwater, Kentuck Knob, Fort Necessity, Ohiopyle and Nemacolin Woodlands, which are great tourist attractions.”

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WEIRTON – A Louisiana-based company that dries drill cuttings for the shale industry has located a regional office in Weirton, creating as many as 30 new jobs by year’s end.

Environmental Drilling Solutions, LLC, based in Lafayette, is operating out of a building acquired in November along Cove Hill Road.

EDS Regional Manager Jake Garber said they currently have four projects running in the Southwest Marcellus and Utica shale plays, though none of their work sites are actually in Hancock County. He said that number should grow, and quickly.

“We’re working now south of Pittsburgh in Washington County, and we have some others in Ohio,” he said.

“But Weirton is kind of centralized among all the activity.

“It’s a good location for us to be able to dispatch our services to different areas, whether it’s Ohio, West Virginia or Southwestern Pennsylvania.”

EDS, billed as a leader in solids control, cuttings processing and zero discharge services, dispatches mobile dryer and mobile centrifuge units operating in the Marcellus shale.

In layman’s terms, Garber said the company “handles and processes all the drill cuttings that come out of the well when they hit the surface, drill cuttings being the actual dirt that the drilling rigs produce. We’re a service provider to the operators.”

Once the liquids are separated from the solids, “essentially what you’re left with is dirt. There’s no associated liquid,” he said, adding the operator then has the solids hauled to an approved disposal facility.

Garber said EDS uses a two-step process to separate the liquids from the dirt.

“That separation is what’s called solids control,” he said.

“It’s a very vital part of the process. Without solids control, you can’t drill a well.”

While solids control is a drilling industry practice, Garber said what EDS offers is a specialized service.

“There are other suppliers out there who do what we do, but we’ve done some engineering modifications to our equipment to allow us to perform better in Marcellus and Utica,” he said.

Though EDS has worked in other shale plays across the country, he said Marcellus and Utica are extremely challenging “because of the consistency of the product we get, it’s a little different that what we’ve seen in other formations.”

Half of the 6,000-square-foot Weirton facility is warehouse space.

The rest houses offices.

Garber said they currently have 10 people working out of the location, though that will increase as they ramp up business activities.

“Hopefully, by summertime we should be in full stride,” he said. “We’re currently building more assets to send up to that area. We currently have three units in the area, but we’re in the process of sending two more – they’re manufactured here, in our corporate facility in Louisiana.

Garber said they’ll be using local vendors to supply the parts they’ll need to service their equipment.

Companywide, EDS employs 275 people at eight locations.

Richard Guillory, EDS’s area manager, touted the Weirton property’s location “near the airport, the highway and many of the drilling rigs in the area, which is beneficial to our clients.”

NOTE: Click HERE to view this story online.

FLASHBACK: Then-Federal Reserve Chairman Alan Greenspan in 2003: “We are not apt to return to earlier periods of relative abundance and low prices anytime soon. … Increased marginal supplies from abroad, while likely to notably damp the levels and volatility of American natural gas prices, would expose us to possibly insecure sources of foreign supply, as it has for oil. … Markets need to be able to effectively adjust to unexpected shortfalls in domestic supply. … As the technology of LNG liquefaction and shipping has improved, and as safety considerations have lessened, a major expansion of U.S. import capability appears to be under way. These movements bode well for widespread natural gas availability in North America in the years ahead.” (U.S. Senate Energy and Natural Resources Committee testimony, 7/10/03)

Shale Gas $100 Billion Savings to U.S. Exceed Tax Cuts
Bloomberg
January 26, 2012

Natural gas prices that slumped to a 10-year low this month could save U.S. consumers $16.5 billion on home energy bills over the course of a year, according to a senior economist at the U.S. Federal Reserve.

U.S. households might see total savings from lower gas prices of as much as $113 billion a year through 2015, including tack-on effects such as lower product prices and higher wages generated by cheaper fuel, according to energy industry consultants IHS Inc.

The projected savings is “an unbelievable amount of money,” said Greg Ebel, chief executive of Spectra Energy Corp., during a Jan. 17 interview. “That’s better than any tax cut you’ve seen out there, better than any government handout.”

If consumers end up pocketing more than $100 billion due to low gas prices, it could add a “significant” piece to U.S. gross domestic product growth for 2012 or 2013, said Robert Solow, professor emeritus at the Massachusetts Institute of Technology in Cambridge, who won the 1987 Nobel Prize in economics. “If that figure is right, it’s a substantial amount,” Solow said in a telephone interview yesterday.

The savings realized by the nation’s 113 million households will vary depending on location and how much gas makes up the home’s total energy bill. Gas utilities are passing along the lower prices they’re paying for the fuel because of a glut of new domestic production from hydraulic fracturing and horizontal drilling in shale formations.

—

Consumers will likely spend about 95 percent of the direct savings they see from their gas bills, said Bernard Weinstein, associate director of the Maguire Energy Institute at Southern Methodist University in Dallas. While that amount is a fraction of the $10.245 trillion in consumer spending for 2010, “it’s a step in the right direction,” Solow said.

—

Typical Household Savings

The typical U.S. household gas bill this year would drop to $323.50 from $468.80 in the previous year at an average gas price of $2.50 per million British thermal units — a savings of $145.30, said Mine Yucel, vice president and senior economist at the Federal Reserve Bank of Dallas.

Residents are forecast to pay about 25 percent less this winter for gas used in stoves, furnaces and fireplaces than they did in 2008, when the fuel last touched highs of more than $13.50, according to the U.S. Energy Information Administration.

“I think of shale gas as a real game-changer for consumers of natural gas,” said Hank Linginfelter, executive vice president of Atlanta-based AGL Resources Inc., in a telephone interview. “It’s having a significant impact on prices.”

AGL Resources, the largest standalone local U.S. gas distribution owner, said December bills have fallen on average 25 percent from a year ago at its utilities in seven states.

40 Percent Bill Trim

Iowa gas bills fell about 19 percent in December compared to the same month a year ago on lower demand and prices, MidAmerican Energy Co., owned by Warren Buffett’s Berkshire Hathaway Inc., said. Piedmont Natural Gas Co., based in Charlotte, North Carolina, has proposed cutting rates next month that would bring the average bill down by 40 percent since 2008.

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The decline in gas has pushed average wholesale electricity prices paid by utilities down 50 percent since fourth quarter 2008, according to a Jan. 11 report from Standard & Poor’s. Meanwhile, retail rates paid by consumers have risen about 5 percent over a similar period, according to data from the Energy Department compiled by Bloomberg .

—

Between 2012 and 2015, lower gas prices may result in total average annual household savings of $926, in part due to lower gas heating and electricity bills, according to a December report by the consultants IHS.

MSC President: “We can’t afford not to get this right“

The region’s largest natural gas trade group has expressed optimism about President Obama’s support of shale gas production he mentioned Tuesday night in his State of the Union Address.

Prior to the president’s address, Kathryn Klaber, president of the Southpointe-based Marcellus Shale Coalition, which has nearly 300 members from the natural gas drilling, production and supply chain, told reporters from the news and trade media she was pleased Obama was including natural gas as part of a strategy to make America energy independent.

“Over the past 40 years, every president, regardless of party, has called for energy independence,” Klaber said, adding recent technological developments – in essence, hydraulic fracturing, – are producing natural gas in volumes that can make energy independence a possibility.

Klaber also said she hoped the president would work with both parties in 2012 to develop a policy that covers both environmental and energy security concerns.

“We can’t afford not to get this right,” she said.

While the president voiced support for gas produced from shale, he said his administration “will take every possible action to safely develop this energy,” adding he would require all companies that drill for gas on public lands to disclose the chemicals they use.

Like Klaber’s MSC, Regina Hopper, president and chief executive officer of America’s Natural Gas Alliance, also supported Obama’s move.

“We welcome President Obama’s remarks in support of the safe and responsible development of natural gas and the opportunities it presents to create American jobs and advance our nation’s environment, economy and energy security.”

While asking government to develop a roadmap for responsible shale gas production, Obama also reiterated his support for clean energy production of all types.

Consumer Energy Alliance Mid-Atlantic, which represents consumers of energy from every sector of the economy, said the alliance supports his vision for safe, responsible development of natural gas in shale formations as a potential boost to the economy:

“President Obama’s vision for an all-of-the-above energy approach is a step in the right direction toward an abundant domestic energy supply and more American jobs,” CEA said in a statement.

“With the recent news that lower natural gas prices resulting from shale gas production have the potential to add over 1 million manufacturing jobs in the U.S. by 2025, it’s clear that by leveraging U.S. resources across the nation – we can create an economy-boosting energy plan for America.”

But one area lawmaker said it remained to be seen if the president’s remarks would be translated into action.

“Southwestern Pennsylvania families want less talk and more action to grow jobs and get our economy moving,” said U.S. Rep. Tim Murphy, R-18th District, in a statement. “Yes, we need more U.S. energy production and a strong domestic manufacturing base. We also need to cut spending and stop job-crushing regulations to help our economy get back on track.

“Yet the goals laid out by the president tonight are the very things his administration is actively working to stop. If the president truly wanted to increase domestic energy production, he wouldn’t be blocking the Keystone Pipeline.”

Meanwhile, Sen. Robert Casey, who has been a critic of shale gas extraction but two weeks ago asked Shell Oil Co. to locate its proposed ethane cracking plant in Pennsylvania, focused his reaction to the president’s address on improving manufacturing, especially in Pennsylvania.

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“The development of clean, American natural gas is creating tens of thousands of family-sustaining jobs, providing consumers with more affordable energy, and ushering in an economic and manufacturing rebirth in communities across the nation. Through the safe production of shale gas, we are – thanks to advances in technology and responsible practices – able to unify environmental and energy policy.

“MSC member companies’ resolution to enhance the transparency of their operations through better disclosure on the FracFocus.org website, while creating more jobs throughout our region, is just the latest example of exactly that.

“We are encouraged that President Obama recognizes the tremendous energy security, environmental, and economic benefits associated with job-creating American shale gas development fueled overwhelmingly through private investment on privately-owned lands.

“And while presidents of both parties have made a clarion call for more American energy over the past four decades, it is our genuine hope that President Obama’s remarks tonight are reflected in his Administration’s policies that are rooted in sound science and move forward with an aim of leveraging our nation’s abundant natural gas resources on behalf of consumers, families, and small businesses. American natural gas will continue to make our nation stronger and more secure.“ 

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By Evamarie Socha The Daily Item

There’s no Marcellus Shale drilling here, but there are local businesses that provide ancillary services, or support to drilling companies.

MILTON — When Minuteman Environmental Services found a place in the Milton Industrial Park, it brought along about 150 jobs and delighted Milton borough manager Chuck Beck.

He was sorely disappointed when Minuteman’s first try to get into the industrial park, on the West Chillisquaque Township side, fell through.

“I couldn’t understand the logic behind why (the company) didn’t fit,” Beck said. “These trucks are basically hauling water,” the residual waste that comes from drilling operations, he said. “It’s about the same as that from a trash truck.”

Minuteman scrapped those plans following strong opposition from township citizens, who feared that its operations with Marcellus Shale drilling posed an environmental hazard. But with that, it also scrapped jobs.

In November, Minuteman got in the park on the Milton borough side, using as a trucking terminal the 23 acres that had served the former Integrity Building Systems.

“Personally, as a borough manager, I’m very happy where it is,” Beck said.

Not only did the company add to local employment, but the tax rolls get a local service tax of $52 a year per employee, he said.

The Minuteman story has played out all over the Valley. There’s no Marcellus Shale drilling here, but there are local businesses that provide ancillary services, or support to drilling companies.

These companies, which also include Moran Industries in Watsontown and Zartman Construction Inc. in Point Township, have added jobs that otherwise wouldn’t exist here.

Tracking the market

In the Central Workforce Investment Area, which includes the Valley counties, ancillary employment grew 14.5 percent, going from 9,723 jobs in the second quarter of 2008 to 11,131 jobs in the second quarter of 2011.

Ancillary industries, those that support drilling operations, include water supply and irrigations systems; specialized long-distance freight trucking; construction, mining and forestry machinery and equipment rental and leasing, among many others. The shale industry also fuels a seemingly never-ending need for commercially licensed drivers.

There’s some explanation needed to understand this. The Pennsylvania Department of Labor and Industry doesn’t break down the number of ancillary industry jobs created in each county.

What it does track are these jobs by workforce investment area, a labor market of contiguous counties where employment, training and educational services are provided.

The Valley is part of the Central workforce investment area, which also includes Centre, Clinton, Columbia, Lycoming and Mifflin counties.

50 more jobs coming

“We anticipate hiring and creating at least 50 additional jobs in the near future,” said Brian Bolus, Minuteman’s owner and president. “Our new location in Milton has enabled us to expand our services and continue to create jobs.”

Located just off Route 147, Minuteman’s trucks have fast access to major roads heading to drilling operations north of here.

The same is true of Zartman Construction Inc., of Point Township, just off Route 11.

Dean Paul, vice president of operations, said the company added six employees — operators, riggers and truck drivers — when it bought a large mobile crane that it leases to drilling companies. The crane travels to drill sites and helps put up and take down rigs as needed, Paul said.

“Construction activity also has picked up there,” he said, “so we’ve had several construction jobs related to the business,” such as warehouses. “The construction has been a bright spot.”

Moran Industries declined a Daily Item request for an interview for this story.

Enforcement concerns

What concerned West Chillisquaque Township and other Valley residents who have organized against gas-drilling-related businesses in their communities are the hazards posed by the industry.

“There is certainly a benefit from the job creation,” said Jan Jarrett, president and chief executive officer of Citizens for Pennsylvania’s Future, an environmental advocacy group that monitors Marcellus Shale issues. “We’ve got no concerns about the jobs being created by the boon, that’s a definite upside of gas drilling.”

It’s the near-lightning speed of drilling, which has outpaced environmental regulations, that has her worried.

“We want to be sure the drilling is adequately regulated, and the rules and regulations are vigorously enforced,” Jarrett said, adding that this industry poses “monumental challenges” to the state Department of Environmental Protection.

“This is an intensely industrial activity,” she said. “It has its hazards. It leaves a significant environmental footprint. We must be sure the industry is overseen in a manner that minimizes the environmental impact of it.”

Minuteman and Milton haven’t been spared the environmental controversy.

“I do know there have been anonymous phone calls to DEP and EPA about supposed violations, hazmat on the property, spilled substances,” Beck said. “Every complaint is investigated, and nothing has been found.”

Bolus said he’s excited to be a part of the community and be able to help the local economy. “The West Chillisquaque industrial park location was a loss” for the township and the Milton Area Industrial Development Association, Bolus said. “It is unfortunate that we were denied our approval. Fortunately, the Milton borough and community saw our potential and gave us this great opportunity to be where we are now.”

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WVU prof.: “Our employment rate for those graduating from our [shale gas] program is 100 percent.”

MORGANTOWN – The natural gas drilling boom sweeping the tri-state region is paying dividends for those earning graduate degrees in geology or geophysics from West Virginia University.

“I have kids who are going out and making as much as $120,000 a year, right off the bat,” said Tim Carr, WVU’s Marshall Miller professor of geology.

Noting the number of students earning advanced degrees has jumped significantly with the increased development of the Marcellus and Utica shale fields, Carr said those students have gone to work for companies such as Chesapeake Energy, Consol Energy, EQT Corp., and Petroleum Development Corp.

“And right now, our employment rate for those graduating from our program is 100 percent,” Carr added.

As some WVU graduates take their talents to work in the gas and oil industry, the university also offers programs for those interested in studying how drilling and fracking may impact local water supplies. Iowa native Michon Mulder and New York native Andrea Sack are two of the students studying isotope geochemistry to determine how gas drilling and coal mining may affect drinking water wells.

“I came to WVU because I wanted to get into the environmental side of the energy industry,” said Mulder, who noted she studies samples drawn from water wells in the north-central West Virginia.

Though she is still in the midst of her studies, Mulder said she believes that methane found in drinking water supplies could get there by any number of means. She does not dismiss the possibility it could come from gas drilling, but said there are many other possibilities.

“There are really multiple sources of methane – coal operations, landfills, and organics,” Mulder added, noting those who depend on water wells near drilling operations should get their water tested before such drilling.

Sack said she enjoys WVU, adding that there are great opportunities for students enrolled in the geology field right now.

“I am studying coal mine drainage,” she said, adding that most of her samples come from abandoned coal mines throughout the state.

Though Carr believes the overall future for the Marcellus and Utica shale drilling is bright, he said low natural gas prices may lead some companies to scale back their operations in the “dry” gas regions of Pennsylvania and West Virginia. According to the New York Mercantile Exchange, or NYMEX, natural gas prices hovered around $2.40 per 1,000 cubic feet last week, sharply lower than they were in previous years.

The methane-dominated dry gas is much more ready for market by companies such as Columbia Gas and Mountaineer Gas than the “wet” gas. This gas contains methane and substances such as ethane, propane, butane and propane, which are collectively known in the industry as natural gas liquids, or NGL. Carr said much of Marshall and Ohio counties contain the wet gas, as do counties in eastern Ohio.

“There should be a shift to there being more activity in the wet gas regions because of the value of the NGL,” he said. “And the farther west you go, the better chance that you are going to be able to get oil, which is much more valuable at this point.”

Carr pointed out that by comparison to the low natural gas price, the price for a barrel of oil on the NYMEX last week was over $100.

Ohio oil and gas industry leaders believe the state’s share of the Utica Shale may contain up to 5.5 billion barrels of oil, in addition to a bounty of NGL. Carr said the Marcellus formation also contains some oil, but it is difficult to retrieve at this point.

NOTE: Click HERE to view this story online.

“Leaders in Harrisburg would be wise to avoid the temptation of crafting policy in a vacuum and instead design a fee and regulatory structure that not only provides heightened safeguards to the public, but also a competitive investment climate.”

The Marcellus Shale has been, and continues to be, the source of enormous benefits for Pennsylvanians. In one year alone, the industry has provided $1.6 billion in royalties and bonus fee income to local landowners. Residents now enjoy lower energy bills, with one conservative estimate showing consumers saving a total of nearly $650 million in 2011.

Besides investing more than $400 million in roads and related infrastructure, the industry also has paid an estimated $1 billion in state and local taxes during the last five years. Even as the rest of the country’s economy struggles amid devastatingly high and lingering unemployment rates, the natural gas industry supports nearly 230,000 jobs throughout the commonwealth, according to state labor data. Key natural gas-producing counties, which have long struggled with tough economic times, are now realizing unemployment rates that are the envy of the nation.

But it’s important to realize that these contributions to Pennsylvania’s economy and workforce hinge on a rational regulatory environment. Indeed, the economic benefits provided by responsible natural gas development from shale were not preordained, and the ability to create jobs and invest in local communities will depend in no small part on the type of regulatory environment our elected leaders choose to create.

State lawmakers are considering a range of policies impacting the industry, including a proposal to create an impact fee for Marcellus development. Such a fee would provide another important source of public revenue for the communities in which natural gas development is under way, but only if it is structured in a competitive manner.

The natural gas industry — like any other industry — cannot grow amid continually increasing costs, nor can it make the proper long-term investments in new infrastructure, new jobs and new equipment if that money instead must be used to pay new taxes or higher fees. Creating an overly burdensome tax or fee — especially given market conditions and the historically low price of natural gas — could drive investment out of Pennsylvania and into more competitive states, regions or even nations, resulting in less state and local revenue, lost jobs and fewer public investments.

We’ve been down this road before. For decades, leaders in Harrisburg continually created regulatory hurdles and costly mandates for Pennsylvania’s manufacturers. While manufacturing didn’t pack up and leave wholesale, the imposition of uncompetitive policies and complex, anti-growth tax and regulatory structures forced many companies to cut investments in the commonwealth and send their money — and jobs — to other areas of the country, or even outside the United States.

When it comes to natural gas development, if Pennsylvania unnecessarily creates a hostile investment climate through a high-cost regulatory regime, operators might well decide to invest in neighboring states or other basins nationwide and the world. We’ve seen several key operators begin, in earnest, to reallocate capital from Pennsylvania to other basins.

In fact, manufacturing is an interesting example because of what Marcellus development has meant for this crucial base of our economy. After years of investing in more competitive overseas markets, chemical and manufacturing companies are now — thanks to lower gas prices spurred by in part by the Marcellus Shale — reinvesting in the U.S.

One company, Shell, also is planning to build an ethane cracker, possibly in Pennsylvania. It’s a chemical manufacturing renaissance that the American Chemistry Council projects will ultimately result in $132 billion in added economic output and is allowing companies to bring jobs back from overseas. Similar growth is being realized in steel, construction and transportation industries as well, adding new life to key sectors of our state and national economy.

For its part, the White House has underscored the critical and growing role that American natural gas development is playing in rebuilding our nation’s manufacturing base. Recently, the Obama administration noted that “the potential benefits [of shale gas] to the U.S. economy are substantial” and “will boost investment and exports in the coming years, generating new jobs.”

This resurgence of manufacturing — and the hundreds of thousands of jobs it supports — would not have happened if the country had viewed the industry as nothing more than a flash-in-the-pan source of government revenue.

Leaders in Harrisburg would be wise to avoid the temptation of crafting policy in a vacuum and instead design a fee and regulatory structure that not only provides heightened safeguards to the public, but also a competitive investment climate.

The responsible development of the Marcellus Shale has been a blessing to the Pennsylvania economy, and the industry is eager to continue its investments throughout the region. We hope that our elected leaders in Harrisburg share this commitment to Pennsylvanians’ future and are equally committed to the ongoing economic rebirth that is now being ushered into our commonwealth.

Kathryn Klaber is president of the Canonsburg-based Marcellus Shale Coalition (www.MarcellusCoalition.org).

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