SRU’s College of Business, Information and Social Sciences held an assembly in the ATS auditorium Tuesday at common hour, about the developing natural gas industry from the Marcellus Shale.
Joy Ruff, the economic development community outreach manager for the Marcellus Shale Coalition, came to SRU to give a presentation about the economics associated with shale gas development.
“When a rock gets on the cover of ‘Time’ magazine, you know it’s big business,” Ruff said. “America is starting to take notice.”
States all over North America have started extracting natural gases from shale. The shale industry is highly competitive, but Pennsylvania has a huge advantage. The states in the northeast are using the most natural gas, and because Pennsylvania has so much Marcellus Shale and is so close to the cities using the gas, many businesses are taking advantage of the shale.
The natural gases are cheap to produce and the cleanest fossil fuel to use, Ruff said.
Ruff stressed the difference between dry gas and wet gas. Dry gas is the type of fuel that can be used straight out of the ground, while wet gas contains some liquid raw materials that must be removed before use. Many factories, such as those in the plastic industry, use these raw materials and will move close to locations that have a lot of wet gas.
Many dry gas companies are losing money from operating, while wet gas companies are making money just by selling their byproducts, Ruff said. Marcellus Shale provides a wet gas.
Bradford, Susquehanna, and Butler counties are some of counties in Pa. with a leading number of drilling wells. The number of wells is quickly increasing. Ruff said that where CEOs decide to place the wells ultimately decides where workers will be moving.
The types of jobs required depend on the phase of the wells. Early on, geologists are required to find out where to place a well. Engineers are then needed to plan how to get the natural gas out of the shale. Afterwards, environmental scientists double check the plans to see if they are safe for the environment.
Workers are then required to construct and maintain wells. After the gases are extracted, they must be stored and shipped to their destinations. So many drivers are required that railroads are building new routes to help transport the gases. Desk jobs, such as those in management, marketing and law are also required.
“The natural gas industry allows students right out of high school to get a high paying job,” Ruff said. “And that’s some of the skilled positions. The welders, the machinists, the electricians.”
Ruff stated that the Marcellus Shale industry has a much greater economic impact than just the jobs that are directly associated with it. The development of the shale industry brings more workers into one location. The higher amount of people benefits the communities that they move into. School districts, the entertainment industry, restaurants and real estate all get more revenue.
Ruff provided some statistics about the Marcellus Shale industry from the Pa. Department of Labor and Industry. There are currently 229,000 employees working in the shale industry. Every seven out of ten of those employees are native to Pa. The average core wage for an employee is $76,036, which is about $30,000 higher than the average wage for someone who is not in the shale industry.
Companies spend around $5 million to produce every well, and $12.5 billion to operate them, Ruff said. Each well has over 400 employees directly working on one site.
SRU business professor John Buttermore was one of the professors who decided to invite Ruff to speak. He believes that the shale industry is very important to SRU students.
“It’s right under our feet,” Buttermore said. “It represents a real chance for long-term careers in a number of different fields.”
During the question and answer portion of the presentation, a student questioned the safety of the hydraulic fracturing (fracking) process. While Ruff admitted to not knowing the technical aspects of the fracking process, she did state that the Marcellus Shale Coalition complies with Pennsylvania’s strict laws, and treats safety as a prime concern. She also said that companies who don’t follow the Marcellus Shale Coalition’s rules are removed from the group.
Geology professor Dr. Michael Zieg states that there could potentially be environmental issues depending on how they handle their fluids from fracking. With that being said, the environmental regulations have become stricter since natural gases were first extracted from the Marcellus Shale.
“Everything is a balance,” Zeig said. “There’s a cost to extracting coal, there’s a cost to extracting gas. It’s not perfectly clean anytime we extract energy, and there will be some environmental cost. The question is how the environmental impact stacks up against the economic benefit from the resource.”
As this is part of a four part series, the Environmental Concerns will be covered in an assembly at a later date.
The next presentation in the series will be in late March and the speaker will be a representative of one of the drilling companies giving a viewpoint on shale from a business perspective.
The following two are most likely going to be panel discussions rather than speakers, Buttermore said. The first one will focus on the safety and environmental issues, and will be held early in the Fall 2012 semester. The second panel discussion will be held late in the fall semester, and is going to focus on the supply community and the ripple effect of the Marcellus Shale industry.