CMU Tepper School of Business: Marcellus Shale Coalition Reaches Out To Community

Natural gas flowing from the Marcellus Shale formation is transforming the region’s economy, but it continues to draw questions – both from those who see opportunity as well as issues associated with hydraulic fracturing. Where can I get a job? Is it safe? Will it affect my drinking water?

Recognizing the continued debate, the Marcellus Shale Coalition – a national organization working with companies involved in the exploration and production of American natural gas, primarily in the Appalachian Basin – reached out to thousands of southwestern Pennsylvania residents, asking them to submit questions about shale gas drilling. Those questions are being posted and answered on its website as part of the “Learn about Shale” campaign.

“We don’t change the wording of questions,” Katie Klaber, MSIA ’03, CEO of the Marcellus Shale Coalition, told Tepper School MBAs. “We are answering those questions with third-party information.”

Being as transparent as possible is one way the group, the natural gas industry and its suppliers are responding to public concerns over the natural gas boom, she said.

Klaber’s February Q&A-format presentation was sponsored by two Tepper School clubs. Questions about economic impact were posed by Dennis Osgood, MBA ’13, president of the Tepper Energy Club, who previously worked as a field engineer in the Marcellus Shale region and other areas of the country. Alanna Houck, MBA ’13, outgoing president of Tepper Net Impact, posed questions about environmental and community concerns.

Klaber shared that the natural gas industry has created 259,000 jobs in Pennsylvania, according to the State Department of Labor. According to PwC, companies have invested $54 million in the Marcellus Shale region in the past three years. “That figure was staggering even to me,” she said.

Klaber noted that steel companies have expanded their pipe, tube and other operations because of the abundance of natural gas. V&M Star, for example, is opening a $650 million steel plant in Youngstown, Ohio. “It is unbelievable to see a town like Youngstown, which has seen very hard times, with a brand new steel plant.”

Klaber said natural gas drillers focus on creating good relationships with individual landowners, who lease their land for horizontal drilling.

Some owners, for example, might balk at a well drill on their property or request that ponds be restored or rebuilt to offset drilling. When possible, gas companies use leeway in their lease agreements to meet these needs. “I am amazed at how much energy companies are used to working on a customized, one-off basis,” she said.

Klaber also reported that market research shows that only eight to 10 percent of local residents oppose hydraulic fracturing, with the strongest opposition in Allegheny County, particularly the City of Pittsburgh. “Human nature is to try to convince every last person that this is a good thing,” she said. However, Klaber suggested that a better strategy is to reach out to the 92 percent [of the public] who favor gas drilling and to make sure they don’t end up on the fence.

Drinking water questions are among the concerns submitted to the coalition. According to the “Learn about Shale” website, “If companies properly construct wells in accordance with state and federal regulations, your drinking water will not be affected by natural gas development.” It adds that state law requires gas companies to test water within 2,500 feet of proposed well sites before and after drilling.

Klaber was one of six speakers sponsored by the Energy Club this year. The group is comprised of about 40 Tepper School MBAs.  Its mission is to broaden students’ interest in energy industry through education and networking opportunities

NOTE: Click HERE to view this letter online.