Participants in a recent shale gas energy conference held in Hobbs, New Mexico, referred to a whirlwind trip to Lea County, NM, as “exhausting” but “enlightening.” Bradford County Commissioners Doug McLinko, Mark Smith, and Daryl Miller, Susquehanna County Commissioner Mary Ann Warren and Pennsylvania state Rep. Tina Pickett were among local elected officials to partake in discussions and serve as guests on informative panels.
“It was a very interesting trip, and we came away with a tremendous amount of information,” said Miller. “We spent a fair amount of time with several of their elected officials and local business leaders discussing a wide range of issues that any area involved in energy exploration faces.”
New Mexico, with only two million people compared to Pennsylvania’s 26 million, is a key energy producing state. Lea County has been drilling for oil and gas for more than 70 years, and business is suddenly booming again in light of the technologies that support horizontal drilling and fracking. There is also a uranium plant in the county.
Doug McLinko Doug McLinko “They are very proud of their energy,” said McLinko. “They call it the Energyplex. They were drilling for oil right along the road to town.”
McLinko was among the participants to return with the notion that Pennsylvania counties in the Marcellus shale region may have been better prepared for the gas boom than was initially realized. Challenges such as housing shortages, environmental concerns, regulations, and work force have plagued Hobbs for years, and authorities there haven’t conquered all of their issues, despite being so many years ahead of this area in oil and gas production.
“They are not that diversified in their economies,” said Central Bradford Progress Authority director Tony Ventello. “We have a very diversified economy to begin with, which can be helpful with the swings in the industry. Let’s build on it.”
“You have to be balanced with different kinds of industry. You can’t rely on just the gas industry,” McLinko concurred. “You have to be proactive in planning growth and attracting jobs, not reactive. We’re also in a better position with our regulations than they were when they got started.”
Making sure that the industry progresses within affective guidelines continues to be a priority here, but Ventello and McLinko agree that the emphasis should be on how to sustain the economic momentum generated by the gas boom by taking advantage of the energy that we are producing.
“They demand responsible drilling, but you need to be diverse in your job base,” said McLinko. “We need to be ready to go, so we don’t miss one development opportunity that can add to the tax base and reduce the pressure on landowners.”
“My intention was to look at the value-added natural gas utilization. Let’s not harvest it and let it leave the area,” Ventello added. “Let’s look at natural gas as a feedstock for other development in this area.”
Water conservation and the protection of drinking water is an especially sensitive issue in New Mexico, Miller explained, because the state is more arid to begin with. With more than 50,000 wells drilled, the state has no documented cases of contamination of fresh water wells as a result of fracking.
Ventello, Miller, and Pickett took note that upwards of 35 percent of Lea County’s budget depends on energy production revenue, which has dealt the area some economic blows due to the inconsistency of energy development in the past. The area boasts of low property taxes, but its citizens have endured boom and bust cycles during the three generations of oil production in the Permian basin and gas drilling in the Woodford shale.
“They tax the industry to the point of critics saying they are overtaxing,” related McLinko, who feels that gas companies here are doing a better job at repairing infrastructure than in New Mexico.
Pennsylvania participants found it especially interesting, however, that New Mexico has set aside $12 million from energy revenues in two large funds. The $9 million permanent fund is tapped primarily for educational purposes on a local level, noted Pickett, while Ventello explained that the $3 million capital projects is used state-wide for a variety of projects.
“We generally go out on a bond issue to fuel that type of activity,” Ventello noted. “They have the cash in place. They’re banking that money.”
Conference attendees were addressed by New Mexico’s Lt. Gov. John Sanchez and several members of its legislature, in addition to representatives from their equivalent to Pennsylvania’s Department of Environmental Protection. McLinko related that PA DEP representative Alan Eichler made a poignant presentation on behalf of this area, and Rep. Pickett spoke alongside Sanchez on the second day of the conference.
“We both agreed that a national energy policy for the United States is a critical discussion needed in this upcoming presidential race,” Pickett stated, noting that the current market price of natural gas, compared to other energy sources, will continue to drive the development of the so-called “wet gas” that is extracted from shale for many years to come.
Pickett and McLinko termed the conference “historic” in that it puts Bradford County and the surrounding area in the national spotlight, which is something that McLinko feels could be further developed. From what he learned in New Mexico, he is also certain that now is the time to enhance the tax base here, “not just at the county level, but also in the boroughs and townships.”
Ventello agrees. He noted that there has not been much of an opportunity for debriefing among the participants after the “intensive” conference, but he continues to put the pieces together in hindsight. He looks forward to working with commissioners from Bradford and Susquehanna Counties to find ways “to promote and develop new business opportunities beyond just landowner payments and royalties.”
Ventello also wants to make sure that companies and businesses in this area are reacting and providing products and services that are needed by the gas industry. For example, a large New York-based company has expressed an interest in expanding natural gas energy services. “Susquehanna County has some of the most prolific wells, but they don’t have the infrastructure to use it.”
Pickett is excited about the possibility of last week’s conference leading to a large coalition of the estimated 167 counties across the nation with shale gas. The conference in Hobbs, she noted “was the beginning of a dialogue to bring these counties together in communication to share solutions and problems. The Pennsylvania entourage invited the New Mexico conference participants to visit this area.
“We need to have a better power point to talk about the Bradford County experience as other counties look to us for leadership,” suggested McLinko, who also made it clear that the county did pick up the tab for airfare for the three commissioners to travel to New Mexico. The commissioners did, however, pay for their own lodging and other expenses. http://www.rocket-courier.com/news/2012-01-19/Front_Page/Officials_Return_From_Western_Gas_Fields_Invigorat.html