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Connecting Local Businesses to the Shale Gas Supply Chain
Pennsylvania Highlands Community College
November 20, 2012
Connecting Local Businesses to
the Shale Gas Supply Chain
Jim Ladlee, Penn State Marcellus Center (MCOR) &
Shale Training and Education Center (ShaleTEC)
Photo Courtesy Penn State Marcellus Center
Ladlee, 2012
marcellus.psu.edu
Opportunity & Perspective
Photo Courtesy Penn State Marcellus Center
Ladlee, 2012
Jim Ladlee
jladlee@psu.edu
(814) 470-3459
marcellus.psu.edu
1
Connecting Local Businesses to the Shale Gas Supply Chain
Pennsylvania Highlands Community College
November 20, 2012
Fitting the Oil/Gas Patch
• Know the high priority occupations (HPO’s)
• Be ready
–
–
–
–
Strong work ethic
Problem solver
Basic knowledge of natural gas production
Pass a drug test
• Network (high contact)
• Patience and perseverance (polite persistence)
• Get ready
– Have a plan
– Take your safety training
Ladlee, 2012
marcellus.psu.edu
The Timeline
Source: Pennsylvania Marcellus Shale Workforce Needs Assessment http://www.msetc.org/
Ladlee, 2012
Jim Ladlee
jladlee@psu.edu
(814) 470-3459
marcellus.psu.edu
2
Connecting Local Businesses to the Shale Gas Supply Chain
Pennsylvania Highlands Community College
November 20, 2012
Workforce & Economic Development
116
120
Current Rig Count
November 9, 2012
Historical Pennsylvania
July Rig Count
100
83
80
78
68
60
43
40
26
25
20
17
25
17
11
0
0
0
Sources: Baker-Hughes Investor Relations (November 9, 2012)
Ladlee, 2012
12
marcellus.psu.edu
Rig Count by County
Pennsylvania (68 Rigs)
10
8
6
4
2
0
Ladlee, 2012
Jim Ladlee
jladlee@psu.edu
(814) 470-3459
marcellus.psu.edu
3
Connecting Local Businesses to the Shale Gas Supply Chain
Pennsylvania Highlands Community College
November 20, 2012
Rig Count by County
Ohio (25 Rigs)
8
7
6
5
4
3
2
1
0
marcellus.psu.edu
Ladlee, 2012
Rig Count by County
West Virginia (27 Rigs)
7
6
5
4
3
2
1
0
Harrison
Ladlee, 2012
Jim Ladlee
jladlee@psu.edu
(814) 470-3459
Doddridge
Wetzel
Marshall
Brooke
Gilmer
Ohio
marcellus.psu.edu
4
Connecting Local Businesses to the Shale Gas Supply Chain
Pennsylvania Highlands Community College
November 20, 2012
4
3.5
Ohio Rig Locations
January 13, 2012
13 Rigs
Source: Rig Data
3
2.5
2
1.5
1
0.5
0
marcellus.psu.edu
Ladlee, 2012
9
8
Ohio Rig Locations
November 9, 2012
31 Rigs
Source: Rig Data
7
6
5
4
3
2
1
0
Ladlee, 2012
Jim Ladlee
jladlee@psu.edu
(814) 470-3459
marcellus.psu.edu
5
Connecting Local Businesses to the Shale Gas Supply Chain
Pennsylvania Highlands Community College
November 20, 2012
5
4.5
4
West Virginia Rig Locations
January 13, 2012
31 Rigs
Source: Rig Data
3.5
3
2.5
2
1.5
1
0.5
0
Ladlee, 2012
6
5
marcellus.psu.edu
West Virginia Rig Locations
November 9, 2012
26 Rigs
Source: Rig Data
4
3
2
1
0
Ladlee, 2012
Jim Ladlee
jladlee@psu.edu
(814) 470-3459
marcellus.psu.edu
6
Bradford, PA
Lycoming, PA
Susquehanna, PA
Tioga, PA
Washington, PA
Greene, PA
Clearfield, PA
Wyoming, PA
Westmoreland, PA
Fayette, PA
Butler, PA
Clinton, PA
Armstrong, PA
Beaver, PA
Cameron, PA
Indiana, PA
Jefferson, PA
Mckean, PA
Allegheny, PA
Clarion, PA
Crawford, PA
Erie, PA
Mercer, PA
Potter, PA
Sullivan, PA
Cambria, PA
Centre, PA
Elk, PA
Forest, PA
Huntingdon
Lawrence, PA
Somerset, PA
Venango, PA
Warren, PA
Bradford, PA
Lycoming, PA
Susquehanna, PA
Tioga, PA
Washington, PA
Greene, PA
Clearfield, PA
Wyoming, PA
Westmoreland, PA
Fayette, PA
Butler, PA
Clinton, PA
Armstrong, PA
Beaver, PA
Cameron, PA
Indiana, PA
Jefferson, PA
Mckean, PA
Allegheny, PA
Clarion, PA
Crawford, PA
Erie, PA
Mercer, PA
Potter, PA
Sullivan, PA
Cambria, PA
Centre, PA
Elk, PA
Forest, PA
Huntingdon
Lawrence, PA
Somerset, PA
Venango, PA
Warren, PA
Connecting Local Businesses to the Shale Gas Supply Chain
Pennsylvania Highlands Community College
November 20, 2012
Jim Ladlee
jladlee@psu.edu
(814) 470-3459
25
Pennsylvania Rig Locations
January 13, 2012
142 Rigs
20
Source: Rig Data
15
10
5
0
Ladlee, 2012
14
12
Ladlee, 2012
marcellus.psu.edu
Pennsylvania Rig Locations
November 9, 2012
80 Rigs
10
Source: Rig Data
8
6
4
2
0
marcellus.psu.edu
7
Connecting Local Businesses to the Shale Gas Supply Chain
Pennsylvania Highlands Community College
November 20, 2012
marcellus.psu.edu
Ladlee, 2012
Workforce & Economic Development
14000
More wells drilled per year
12000
No change in wells drilled per year
10000
Less wells drilled per year
8000
Size of workforce will
depend on number of
wells drilled each year.
6000
4000
2000
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Year
Ladlee, 2012
Jim Ladlee
jladlee@psu.edu
(814) 470-3459
marcellus.psu.edu
8
Connecting Local Businesses to the Shale Gas Supply Chain
Pennsylvania Highlands Community College
November 20, 2012
Natural Gas Price (July) 2002-2012
$12.00
July Monthly Average Wellhead Price:
2002
$2.92
2008
$10.79
$13.58 - daily high
November 18, 2012 $3.82
$10.00
$8.00
$6.00
$4.00
$2.00
Sources: Energy Information Administration
$0.00
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Today
marcellus.psu.edu
Ladlee, 2012
4,500
Working Natural Gas in Underground Storage
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
Source: Energy Information Administration (November 12, 2012)
Ladlee, 2012
Jim Ladlee
jladlee@psu.edu
(814) 470-3459
Oct-12
Nov-12
Sep-12
Jul-12
Aug-12
Jun-12
Apr-12
May-12
Mar-12
Jan-12
5-Year Minimum
Feb-12
Dec-11
Oct-11
Nov-11
Sep-11
Jul-11
5-Year Maxium
Aug-11
Jun-11
Apr-11
May-11
Feb-11
Mar-11
Jan-11
Dec-10
Nov-10
0
Storage Inventory:
marcellus.psu.edu
9
Connecting Local Businesses to the Shale Gas Supply Chain
Pennsylvania Highlands Community College
November 20, 2012
Development Patterns
• E&P vs. subcontractor
• Hot spot vs. overall
• Development type
–
–
–
–
Appalachian Basin
Regional offices/centers
Field offices
Field location
• Pace
–
–
–
–
Price
Inventory
Production
Utilization
• Federal/State Policy
Ladlee, 2012
Photo Courtesy Penn State Marcellus Center
marcellus.psu.edu
Source: PA Marcellus Shale Workforce Needs Assessment http://www.msetc.org/
Ladlee, 2012
Jim Ladlee
jladlee@psu.edu
(814) 470-3459
marcellus.psu.edu
10
Connecting Local Businesses to the Shale Gas Supply Chain
Pennsylvania Highlands Community College
November 20, 2012
Employment (2009Q1 to 2012Q1)
•
•
•
•
Core industries up 19,100 (+177.5%).
Ancillary industries up 13,700 (+7.2%).
All industries up 43,300 (+0.8%).
2012Q1 Marcellus Shale related industries
total employment was 234,000.
Marcellus Shale Fast Facts, October, 2012 edition*
Center for Workforce Information & Analysis (CWIA)
Ladlee, 2012
marcellus.psu.edu
Establishments (2009Q1 to 2012Q1)
• 1,165 establishments added
– 408 core, 757 ancillary
• Core 65.0% growth
• Ancillary 6.2% growth
• All PA Industries 4.0% growth
• 13,065 Shale establishments in 2012Q1
Marcellus Shale Fast Facts, October, 2012 edition*
Center for Workforce Information & Analysis (CWIA)
Ladlee, 2012
Jim Ladlee
jladlee@psu.edu
(814) 470-3459
marcellus.psu.edu
11
Connecting Local Businesses to the Shale Gas Supply Chain
Pennsylvania Highlands Community College
November 20, 2012
PA Wages (2011Q2 through 2012Q1)
• Average across all industries $47,861
• Average in core industries $83,065
• Average for ancillary industries $64,799
Marcellus Shale Fast Facts, October, 2012 edition*
Center for Workforce Information & Analysis (CWIA)
marcellus.psu.edu
Ladlee, 2012
Ancillary Industries
2009Q1
Est.
Emp.
2012Q11
Est.
Actual Change % Change
Emp.
Est.
Emp.
Est. Emp.
Specialized Freight Trucking
1,042
9,336 1,286 12,983
244
3,648
23%
39%
General Freight Trucking
1,206
8,085 1,409 10,513
203
2,428
17%
30%
8,774
9
1,550
2%
21%
535 19,090
3
1,499
1%
9%
2,462 41,691 2,588 42,999
126
1,308
5%
3%
Testing Laboratories
394
Highway, Street, & Bridge Const.
532 17,591
Engineering Services
Const., Mine, & Forest Equip Rent
7,224
403
115
2,202
164
3,382
49
1,180
43%
54%
Geophysical Survey & Map Srvs
55
237
59
344
4
106
7%
45%
Oil & Gas Machine & Equip Mfg
8
338
10
427
2
89
25%
26%
Marcellus Shale Fast Facts, October, 2012 edition*
Center for Workforce Information & Analysis (CWIA)
Ladlee, 2012
Jim Ladlee
jladlee@psu.edu
(814) 470-3459
marcellus.psu.edu
12
Connecting Local Businesses to the Shale Gas Supply Chain
Pennsylvania Highlands Community College
November 20, 2012
Biggest Challenge Finding Workers
0%
10%
20%
30%
40%
50%
60%
70%
80%
54%
Willing to work hours
36%
Good work history
22%
Clean criminal background
25%
Free from drugs
71%
Experience needed
63%
Technical skill needed
45%
Proper degree/certification
24%
Proper interpersonal skills
Source: Pennsylvania Marcellus Shale Workforce Needs Assessment http://www.msetc.org/
marcellus.psu.edu
Ladlee, 2012
Business Impacts Hotel Tax
$971,583
$1,000,000
$900,000
$800,000
$674,083
$700,000
$525,702
$600,000
$500,000
$450,032
$411,521
2009
2010
$345,411
$400,000
$300,000
2008
456,378
$269,810
$222,524
171,903
2011
$242,000
193,882
$200,000
$100,000
$-
Bradford
Ladlee, 2012
Jim Ladlee
jladlee@psu.edu
(814) 470-3459
Lycoming
Tioga
marcellus.psu.edu
13
Connecting Local Businesses to the Shale Gas Supply Chain
Pennsylvania Highlands Community College
November 20, 2012
Business Impacts - Rail
8,500
9,000
7,405
8,000
7,000
5,730
5,700
6,000
2008
4,767
5,000
2009
2010
4,000
2011
2,471
3,000
2,130
2,000
1,600
2,000
841
1,000
411
80
Bradford
Ladlee, 2012
Lycoming
Tioga
marcellus.psu.edu
Utilization
Transportation
Manufacturing
• Compressed Natural Gas (CNG) • Strong energy users
– Paper
• Liquefied Natural Gas (LNG)
– Steel
• Gas to Liquids (GTL)
– Plastics
• Co-fueling
– Diesel/Natural Gas
– Electric/Natural Gas
Ethane Cracker
Ladlee, 2012
Jim Ladlee
jladlee@psu.edu
(814) 470-3459
– Glass
– Agriculture
Power Generation
• Combined Heat and Power
• Coal Conversion
• Peaking Power
marcellus.psu.edu
14
Connecting Local Businesses to the Shale Gas Supply Chain
Pennsylvania Highlands Community College
November 20, 2012
marcellus.psu.edu
Ladlee, 2012
Fitting the Oil/Gas Patch
• Know the high priority occupations (HPO’s)
• Be ready
–
–
–
–
Strong work ethic
Problem solver
Basic knowledge of natural gas production
Pass a drug test
• Network (high contact)
• Patience and perseverance (polite persistence)
• Get ready
– Have a plan
– Take your safety training
Ladlee, 2012
Jim Ladlee
jladlee@psu.edu
(814) 470-3459
marcellus.psu.edu
15
Connecting Local Businesses to the Shale Gas Supply Chain
Pennsylvania Highlands Community College
November 20, 2012
Thank You
• www.marcellus.psu.edu
Questions Contact: Web Resources:
Jim Ladlee
• www.msetc.org
jladlee@psu.edu
• www.naturalgas.psu.edu
(814) 470-3459
www.marcellus.psu.edu
www.msetc.org
www.naturalgas.psu.edu
Ladlee, 2012
marcellus.psu.edu
Photo Courtesy Penn State Marcellus Center
Jim Ladlee
jladlee@psu.edu
(814) 470-3459
16