Marcellus continues to produce jobs and controversy
CHARLESTON, W.Va. -- The continued development of Marcellus Shale deposits to produce natural gas is a major economic force in West Virginia.
That development will continue to create jobs but also stir controversy about the negative environmental impacts of drilling deep into the ground to reach the deposits.
Nicholas "Corky" DeMarco, executive director of the West Virginia Oil and Natural Gas Association, said, "The price of gas has been pretty low for the past couple of years.
"It is all about the fact there is so much gas coming out from the shale and the demand is so low. We have had exceptionally warm winters, which led to people not turning their thermostats up. That is why the prices are depressed. It is a supply-and-demand issue."
DeMarco said gas sales and revenues would pick up if the industry received government approval to "export some liquefied natural gas to some of our international trading partners.
"We are also hoping to be able to switch fuels, to use natural gas as transportation fuel in the future to power railroads and your personal vehicles.
"You will see some of those things happening. There is so much gas in these shales that it should not affect the consumer adversely. The price may go up a little bit, but it will not go up as it did after [Hurricane] Katrina and those types of things."
DeMarco said the industry hopes natural gas prices rise from their current price of $3.35 to $3.50 for a thousand cubic feet to about $4.50 for a thousand cubic feet.
"That would bring a lot of people back into the game. And we have to have uses for our natural gas," DeMarco said. "If you don't have outlets for it, you will continue to have supply and no demand."
Other industries might benefit from increased gas production, too.
Mark Glyptis, a longtime president of the United Steelworkers local union at the Weirton plant, believes West Virginia's steel industry could benefit from the development of the Marcellus Shale reserves.
"With the Marcellus Shale drilling, there will be a large amount of steel needed for pipes. There will be a great deal of drilling and the need for pipes to transport the gas. We have to make sure the government gives us a fair chance to compete," Glyptis said.
West Virginia has huge reserves of natural gas deep underground in the Marcellus Shale deposits that stretch from western New York through Pennsylvania down into West Virginia and eastern Ohio.
Recovering that gas offers great economic opportunities to investors. And it could create thousands of additional good-paying jobs for workers who drill deep underground wells and who operate the gas plants.
Recovering Marcellus gas, critics say, also creates major environmental problems, including fracturing underground rock layers and pumping poisonous chemicals into the earth to help recover the gas.
Pollution from those chemicals, critics argue, could seriously damage local streams and rivers.
Hydrofracking for Marcellus Shale gas has the support of many major political leaders, including Gov. Earl Ray Tomblin, Sen. Joe Manchin, D-W.Va., and most state legislators.
Cracker plants can also produce a wide variety of other products, including: diesel fuel, gasoline, naphtha and ethylene -- a major product used by the plastics industry.
Dave McMahon, a Charleston lawyer, represents surface property owners who do not own mineral rights under their properties. Marcellus Shale drilling projects near their homes could threaten the value of their properties, he argues.
Conventional gas drills cost $300,000 to develop, McMahon said, while hydrofracking gas drills can cost between $3 million and $6 million.
McMahon and his clients also worry about environmental problems, which include chemical-polluted drilling water flowing into streams, creeks and underground water reserves.
The noise generated by hydrofracking drilling projects, McMahon said, also will mean that some people "can't sleep at night."
Another dispute that has developed around hydrofracking projects is whether companies like Dominion Resources will continue importing dozens of workers from other states, such as Texas and Oklahoma, or hire more local workers.
Steve White, executive director of the Affiliated Construction Trades Foundation, has consistently raised those questions.
The ACT Foundation asked Marshall University researchers to compare the economic impact of hiring local workers against hiring out-of-state workers.
Local communities in West Virginia lose millions of dollars when out-of-state construction workers are hired for projects such as building Marcellus Shale drilling and processing facilities, the study found. It was completed in late 2010.
Conducted by Marshall University's Center for Business and Economic Research, the study examined the local economic impacts of building a hypothetical natural gas processing facility similar to the one being built in Marshall County by Dominion Resources.
Dominion's building project, which will last for 30 months, will employ 600 workers at its peak and cost $500 million.
Dominion Resources, based in Richmond, Va., hired CBI-Lummus, a Texas contractor, to build its facility on the shores of the Ohio River in Natrium, a town north of New Martinsville and south of Moundsville in the Northern Panhandle.
The economic impact of paying wages to local workers, the Marshall researchers found, is eight times higher than paying wages to non-local workers, who live here only temporarily.
Last year, Chuck Penn, a Dominion Resources spokesman, defended his company, which he said is investing just under $1 billion for three projects in West Virginia.
The successful bidder for one of Dominion's projects was based in Houston.
"The contract was predicated solely on their technical expertise, he said. "There was no company in West Virginia that had the combination of attributes we needed.
Dominion had encouraged subcontractors to hire local workers, Penn said.
The Marshall study estimated a local community could lose $76.6 million in wages from such a project, when transient workers are hired from distant states.
Using local workers to build such a gas processing facility could infuse $86.4 million in wages into the local economy, the study found.
Typically, most of the money that non-local workers spend goes to hotels and restaurants.
Opposition has also developed in some communities.
In September 2010, the Pocahontas County Commission wrote to the West Virginia Department of Environmental Protection, stating that it was "gravely concerned about the impacts to our pristine environmental and rural culture from the impending possibility of hydrofracture drilling in the Marcellus Shale underlying our borders."
Martin V. Saffer, a lawyer and member of the Pocahontas County Commission, said his county's unique environment "is a benefit for people who live here and people throughout the rest of West Virginia."
"We have pure water, opportunities for recreation. We have a wonderful, flourishing tourism industry. We have farming communities and timber resources. All of these resources will support an economy that will sustain itself for many, many future generations," Saffer said.
Some critics believe drillers have already begun to damage the state's water supplies, since hydraulic fracturing opens up huge fissures in rocks often a mile or more below the surface and pumps in chemicals to assist the removal of natural gas.
Leslee McCarty from the West Virginia Environmental Council believes those chemicals threaten the state's future water supplies and health.
Drilling in West Virginia and other states is causing harm to people's health, their livestock, property, well water, streams and contaminating the air they breathe, she said.
Reach Paul J. Nyden at email@example.com or 304-348-5164.