Westmoreland, neighboring counties keep faith in Marcellus shale gas industry

Joe Napsha
| Tuesday, March 8, 2016, 11:05 p.m.

Diversification may be the key to economic success for Westmoreland, Fayette and Washington counties, but officials from those counties said Tuesday they're not giving up on the Marcellus shale — a lucrative source of income and jobs that's taken a hit recently because of declining natural gas prices.

Unlike the steel industry that collapsed in the 1980s and 1990s, the Marcellus industry will rebound, officials from the three counties said during a session attended by about 75 government and business leaders at the Willow Room in Rostraver.

“Natural gas will come back,” Washington County Commissioner Larry Maggi said.

His reasoning? The gas will remain here waiting to be tapped when prices eventually rise.

“We're seeing companies that want to be in Southwestern Pennsylvania to be close to cheap energy,” Maggi said.

Those companies have been a boon to municipalities since the communities began collecting impact fees on drilling operations in 2012.

Washington County received $6.5 million, Westmoreland County $1.5 million and Fayette County $1.3 million in impact fees in 2014, according to the latest data from the state's Public Utility Commission.

But statewide, those fees have been decreasing since reaching a high of $226 million in 2012 as gas prices drop and companies cut back on production.

The state's Independent Fiscal Office projects that 2015 impact fees will drop $38 million from 2014 to $185.5 million when those numbers are tallied this year.

The good news for the region is that gas production is expected to rebound next year, according to a U.S. Energy Information Administration forecast released this month. As they wait for that to happen, officials at the event sponsored by the Mon Valley Regional Chamber of Commerce — including Westmoreland commission Chairwoman Gina Cerilli and Fay-Penn Economic Development Council Executive Director Robert Shark — said developing initiatives that don't depend on natural gas production is crucial.

Fayette's economic development initiative is focusing on building entrepreneurship and filling space in its business park near Fairchance, Shark said.

“I definitely see a brighter future for Fayette County, even with the slowdown in the oil and gas industry,” Shark said.

Cerilli pointed to the success of the expansive network of her county's 16 industrial parks — most of which are at full occupancy — where 142 companies employ 9,500 workers.

She added Westmoreland has initiated a business outreach program — visiting 56 businesses and targeting 137 — designed to learn what is needed to keep the businesses in the county.

“We are constantly looking to expand our industrial parks,” Cerilli said. “It's great to go out and try to attract new businesses ... but we have to remember the businesses that are already here. It is easier for businesses that are already here to expand than it is us to go out and bring businesses here.”

To help foster economic development, James Protin, business consultant and president of the Mon Valley Chamber of Commerce, said he would like to see a leadership group formed with government officials and the business sector to address the region's economic problems. Cooperation among the officials of all three counties would be critical to those efforts, Protin said.

“It's never going to be the way it was,” Protin said, referring to the role the steel and coal industries played in the Mon Valley for decades. “But it doesn't mean it can't be better.”

Improving quality of life in the region is also important to economic development, Shark said, because millennials — those who range in age from their early 20s to their mid-30s — “will look for a nice place to live before they look for a job.”

Exploiting recreational opportunities in the region to augment economic development initiatives is another key to success — and something Maggi said is happening in river towns including Allenport, Stockdale and Roscoe.

“The Mon Valley is starting to percolate,” Maggi said.

Joe Napsha is a Tribune-Review staff writer. Reach him at 724-836-5252 or jnapsha@tribweb.com.

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