Natural gas boon fuels bright spot for local economy

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(EDITOR'S NOTE: As we close out the year, the Sun-Gazette takes a closer look at how the economic crisis of 2009 affected and continues to affect this region. Our year-end series ends today.)

In spite of unemployment climbing above 9 percent, local officials say there was plenty to be positive about in 2009, not the least of which was the continued development of the Marcellus Shale.

That positive feeling should carry over into 2010 and beyond, said Williamsport-Lycoming Chamber of Commerce President Vincent Matteo.

"The future is natural gas, not only for Lycoming County, but for the region," Matteo said.

According to the U.S. Department of Labor's Bureau of Labor Statistics, the county saw unemployment rise from 5.7 percent in October 2008 to 9.2 percent in October 2009, the latest monthly statistic available.

Matteo said the county's unemployment situation is not unique to Pennsylvania or the nation.

"This is not the only area with higher unemployment. It's like that in the national and state economy," Matteo said. "It's not anything we can do about it until the national economy eases up."

The economic sector that probably has been hit the hardest is the retail industry, Matteo said.

16 companies locate here

However, other sectors have benefited from gas exploration, he said.

"Conservatively speaking, in the last year and a half, 16 companies have located in Lycoming County that are gas or gas-related," Matteo said. "More are coming all the time. The same is happening in Tioga, Bradford and Clinton counties."

Natural gas activity has, in turn, increased the demand for local products and services directly and indirectly related to the industry, Matteo said.

For example, drilling companies need stone from local quarries and fencing for drilling sites, while gas workers stay in hotels and eat in local restaurants.

"We usually have a strong hotel market, but it's been off the charts lately," Matteo said. "Most of our hotels are probably setting records for occupancy rates."

Unprecedented flurry of activity

Matteo credited the Marcellus Shale with spurring an unprecedented flurry of activity with the Industrial Properties Corp., the chamber's commercial real estate arm.

"Because of the Marcellus Shale, the IPC has (this year) sold or has under contract more land during any year in our history," he said.

This year saw the groundbreaking at one of those properties in Montgomery. There, a Halliburton concrete mixing plant could see the creation of at least 250 jobs "when it is up and running," Matteo said.

Officials also have suggested that in 2010 a company could be locating here, bringing with it another 50 jobs.

One economic indicator, airport use, has seen an increase in activity related to the gas industry.

Commercial traffic grows

Gas industry activity has resulted in a jump in commercial traffic of 10 percent, and corporate jet travel of 60 percent, according to airport director Thomas Hart.

"We're definitely seeing an increase in business in both the passenger side with the airlines and also in the corporate side with private aircraft," Hart said.

Gas industry officials said they intend to continue developing gas resources in Lycoming County.

"In 2010, we have 15 wells planned in Lycoming County, and we are increasing our capacity to move gas to sales," said Kristi Gittins of Texas-based Chief Oil and Gas.

The company is drilling its 14th well in the county, Gittins said.

Other bright spots

Bright spots in the economy not directly related to the gas industry include Moran Industries' plans to convert the former Kennedy-King housing development on the city's west side into a logistics center that will compliment the company's facility at the nearby Wahoo Industrial Park.

The newly christened Bulkmatic facility at the Newberry Rail Yard will double the capacity of the company's former facility on Maynard Street.

The project included the construction of a new access road from the rail yard to Route 220, and the installation of utilities such as natural gas, water and electricity.

Jerry S. Walls, chairman of the SEDA-Council of Government's Joint Rail Authority, which owns the rail yard, said the new facility will provide cost-competitive commodity transportation to local companies and enable other companies to locate at the rail yard.

Nittany Oil of State College already has plans to build an ethanol storage facility adjacent to Bulkmatic.

Company officials recently received approval from the city Planning Commission to build four, double-walled storage tanks.

According to documents submitted by the company's engineering firm, the company plans to use many of the facilities available at the Bulkmatic development, including lighting and railroad tracks.

The area's access to rail service will aid the gas industry by providing a cost-effective way of transporting pipes, frac sand and other products needed by the industry, Matteo said.