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Gas Drilling Raises Economic Prospects
5/16/2008
Gathering the manpower and equipment to tap natural gas under the Southern Tier will continue for months and years as companies recruit qualified help for jobs ranging from land prospecting to drilling, industry sources said.
Gas drilling raises economic prospects
Work to have long-term impact on Tier jobs
Gathering the manpower and equipment to tap natural gas under the Southern Tier will continue for months and years as companies recruit qualified help for jobs ranging from land prospecting to drilling, industry sources said.
Some jobs, such as clerical help to process land deals and laborers laying pipe to carry the gas, will be local. Others, like specialized teams operating drilling rigs, will likely be brought from out of the area.
Until recently, low natural gas prices and technological limits caused a lull in the industry regionally, said Brad Gill, a spokesman for the Independent Oil & Gas Association of New York. A drop in gas prices below $3 per 1,000 cubic feet in the late 1980s and through the 1990s "decimated our industry," he said. Consequently, prospecting slowed, infrastructure development lagged and jobs dwindled.
Prices have since more than tripled, and new technology and current geological models have led to a rush to tap the Marcellus Shale formation. It's the largest untapped natural gas reserve in the country and it extends under the Southern Tier and Pennsylvania.
Everything is suddenly changing, as companies race to catch up.
The discovery and development of a gas or oil reserves such as the Marcellus formation, and the prospecting and deal-making that go along with it, are known in the industry as a "play."
"This is a very large play (through the Southern Tier and Pennsylvania) that has received the attention of extremely large independent oil companies," Gill said. "It's still in its infancy."
The economic potential for the play was previewed in a $90 million land lease deal between XTO Energy, of Fort Worth, Texas, and a coalition of 300 landowners in the Deposit area. Parties are scheduled to sign the agreement later this month.
The number of jobs that the gas play could bring to the area is anybody's guess until drilling begins and the productivity of the reserve is proven. Already, hundreds of jobs are being created by clerks and accountants contracted to handle land deals like the one in Deposit, prospectors -- called landmen -- negotiating more deals, and laborers working on pipelines.
Unlike conventional wells, drilled vertically through gas reserves in the Trenton Black River formation in Broome County and western New York, technological advances will allow wells to bore horizontally into the much larger Marcellus Shale. That carries the promise of higher yields, but it also will require more equipment and people to work it.
While the wells are drilled, more infrastructure must be developed to carry the gas to major pipelines, such as the 30-inch diameter Millennium, now being constructed through Broome County. The 186-mile stretch from Corning to Ramapo will improve access to natural gas reserves in Canada and the Southern Tier. If gas development of Marcellus gas wells in the Southern Tier meets industry expectations, a network of feeder lines from individual wells must be developed.
John Shaffer, business manager for Local Chapter 7 of the Laborers International Union of North America, said the Millennium line will use local union workers, who begin at $23 an hour, plus benefits. He anticipates the jobs for additional infrastructure will include local manpower.
It is likely that companies will bring some specialists from out of the area, especially for gas drilling. Rigs now working a large productive gas reserve in Texas called the Barnet Shale must also be moved to the area, or built, industry sources said.
Each rig, which runs around the clock, requires three crews of five people, working 12 hours on and 12 hours off for 10 days in a row.
"Anybody can do that," said Terry Engelder, a geologist at Penn State specializing in the Marcellus Shale. "But few people can do it for two or three years, and that's what it takes. It's very hard work and it's not weather dependent ... It takes a very special person."
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