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A step toward energy independence

New “greenfield” pipelines to take Marcellus and Utica gas to markets in Northeast, Southeast and New England This year, the Federal Energy Regulatory Commission (FERC) announced 10 proposed Marcellus and Utica shale gas transmission pipeline projects. All but one have significant new “greenfield” construction, which

Getting gas to market: the legal issues behind the infrastructure

The “glut of natural gas” in the Marcellus and Utica shale plays has brought numerous midstream companies to the forefront of the natural gas industry. Now that there seems to be an enormous amount of natural gas in storage, addressing how to get it to

Marcellus and Utica: What’s Ahead for 2015?

Exciting times are forecast for the Shale industry in 2015 and beyond. Ten Marcellus and Utica interstate pipeline projects are in the process of development. The state will host the first two liquid natural gas (LNG) facilities in the Northeast built exclusively for LNG-powered tractor-trailer

Charitable giving extends beyond the holidays for ‘good neighbor’ Shale gas companies

In early September when Williams’ largest fundraising event featured natural gas companies grilling pulled pork, beef brisket and pork ribs in the late summer heat vying for top Williams BBQ honors, the last thing they were probably thinking about was the winter holiday season. The

Entries for 2015 Northeast Oil & Gas Awards now open

Entries for the much-anticipated 2015 Northeast Oil & Gas Awards will continue to be accepted until the submission deadline of Thursday, Dec. 11. The event, which is also sponsored by media sponsor Marcellus Business Central, will feature an awards gala dinner on Wednesday, March 25,

A step toward energy independence

New “greenfield” pipelines to take Marcellus and Utica gas to markets in Northeast, Southeast and New England

This year, the Federal Energy Regulatory Commission (FERC) announced 10 proposed Marcellus and Utica shale gas transmission pipeline projects. All but one have significant new “greenfield” construction, which means they are new pipelines with new rights of way.

Before 2014, all of the Marcellus and Utica interstate pipeline projects had been upgrades to existing pipelines that carried natural gas from the Gulf Coast and the West. Some of those pipelines were expanded or “looped” to accommodate additional gas from the Marcellus and the Utica shale plays. The 10 new “greenfield” pipelines would transport Marcellus and Utica shale gas to markets and processing facilities.

williams-northeat-cover-pix

The Springville line, pictured here during construction in northeast Pennsylvania, will transport natural gas from Williams operations in Susquehanna County to Williams’ Transco system in Luzerne County. Photo courtesy of www.williamsinthenortheast.com

Currently, 20 interstate natural gas pipeline systems operate within the northeast region. The larger capacity pipelines are owned by the Columbia Gas Transmission Company (9.4 Bcf per day), the Transcontinental Gas Pipeline Company (8.5 Bcf per day), Texas Eastern Transmission Company (7.3 Bcf per day), and The Tennessee Gas Pipeline Company (6.7 Bcf per day).

The interstate pipelines transport gas to several intrastate natural gas pipelines and at least 50 local distribution companies, which deliver gas to homes and businesses. They also serve large industrial customers and natural gas fired electric power plants.

“The Marcellus shale play has made Pennsylvania the second largest natural gas producer in the country, and the Utica in Ohio is a proven major source of valuable natural gas liquids,” said Dave Messersmith, a member of Penn State Extension’s Marcellus Education Teams.

He said production has reached the point where new lines are needed to get the gas to market, which is why new “greenfield” projects are being proposed in Pennsylvania and surrounding states.

Additionally, because existing interstate pipelines run from south to north and laterally across the state, new pipelines would originate in the major shale gas regions like the Northern Tier and the southwest to take the gas out of state.

Williams, an Oklahoma-based midstream company that owns 100 percent of the 10,200-mile Transco Pipeline and 49 percent of the Gulfstream Pipeline, is the sole sponsor of three of the 10 new pipeline projects — Atlantic Sunrise, Diamond East and Western Marcellus Pipeline Project. It would also own 70 percent of a fourth proposed project — the Constitution Pipeline.

Atlantic Sunrise

This pipeline would run 178 miles north to south from Susquehanna County to Lancaster County, and have a capacity to deliver 1.7 Bcf per day of natural gas.

The pipeline is expected to increase economic activity in project regions by $1.7 billion, according to Williams. If approved by FERC, construction would begin in 2016, with an in-service target of 2017.

Residents of Lebanon County opposing the pipeline are trying to use an ordinance that would return major infrastructure decisions to local communities rather than corporations and the state and federal government.

Legal challenges have sometimes been effective in stopping intrastate pipelines such as distribution lines. For example, a Columbia distribution line was stopped from going through downtown State College in 2013. Local laws have rarely stopped interstate pipelines from proceeding — although pipelines are sometimes rerouted if significant environmental impacts are discovered.

Earlier, the proposed Commonwealth Pipeline had a similar path from north to south, but after the open season seeking customers and gas drillers was announced, the project was cancelled.

“It’s not unusual for large scale, capital intensive pipeline projects to get pulled because of lack of open season interest or perhaps issues with planning and execution of the pipeline, and that could happen with any of these new proposed pipelines,” said Messersmith.

Diamond East

Announced in August, the Diamond East Pipeline is designed to be a large scale transmission pipeline that would stretch from a gathering system in Luzerne and Lycoming counties, run through the Delaware River Basin, and terminate in Mercer County, New Jersey. The project includes new pipeline looping and additional compression to transport about 1 billion cubic feet of natural gas per day.

The project will need permits and authorizations from the Federal Energy Regulatory Commission (FERC), the Army Corps of Engineers, and the Pennsylvania and New Jersey Departments of Environmental Protection before it can proceed.

“The permitting process for pipelines can take two to three years because of all the regulatory bodies involved,” said Messersmith. “Before a company can receive a permit for construction, it must also prove there’s an economic need for the project, meaning in this case that the market price of gas coming from the northern Marcellus counties is less than where it’s going to be delivered by a substantial margin.

Last year, when temperatures plummeted into single digits, the price of gas coming from the Gulf cost was 35 times higher on the spot market than Marcellus gas.

Western Marcellus Pipeline Project

By late 2018, the Western Marcellus Pipeline would connect Williams’ Ohio Valley Midstream processing and gathering system in northern West Virginia with the Transco pipeline, and provide as much as two billion cubic feet per day of Marcellus and Utica natural gas to markets in the Mid-Atlantic and southeastern U.S.

The Constitution Pipeline

This 124-mile pipeline through Pennsylvania and New York would have a capacity to transport 650,000 dekatherms of natural gas – enough natural gas to serve approximately 3 million homes per day.

The 30-inch pipeline would collect Marcellus gas from pipelines in the Northern Tier feeding into the Williams Midstream Central Station in Susquehanna County and  transport it into New York State to the Iroquois Gas Transmission to move gas to New York City, and to the Tennessee Gas Pipeline to move gas  to Boston.

In addition, the pipeline would have five tap lines to bring gas to local communities in New York State along the pipeline path. The target in-service date is 2016.

Penn East

This proposed 105-mile pipeline would emanate in the Wilkes-Barre area and move gas southeast to Trenton, NJ. Sponsors include Atlanta-based AGL Resources, NJR Pipeline Company, PSEG Power LLC, South Jersey Industries, UGI Energy Services, and most recently, Spectra Energy Partners.

“What’s unique about some of these newer projects is that instead of being owned by one major midstream company such as Williams or Kinder Morgan, they’re sponsored by a number of different companies including gas distributors,” said Messersmith.

The remaining pipeline projects include: Duke Energy, Piedmont Natural Gas, AGL Resources and Dominion Energy’s Atlantic Coast Pipeline in WV, VA, and NC; Kinder Morgan’s Northeast Energy Direct in PA, NY and MA; Energy Transfer Partners’ ET Rover Pipeline in OH and MI; Sunoco’s Mariner East Phase II in PA; and Mountain Valley Pipeline in WV and PA.

The 550-mile Atlantic Coast Pipeline would move Marcellus gas into North Carolina, and the 300-mile Mountain Valley Pipeline into Virginia.

“These are the first major pipelines to move Marcellus gas into the Southeast market,” said Messersmith.

“All these projects are still in the permitting phase with the exception of Mariner East II, which would use an existing pipeline that was repurposed to move natural gas liquids from western Pennsylvania to the Markus Hook refinery in Philadelphia.

“The gas from all 10 projects will ultimately end up being used in homes, businesses, manufacturing plants, power plants, and at some of the export terminals that will be shipping liquid natural gas abroad.

“It’s hard to overemphasize the importance our domestic oil and gas production will have toward our nation’s goal of becoming energy independent,” said Messersmith. “These new pipelines are a step in that direction.”

Getting gas to market: the legal issues behind the infrastructure

The “glut of natural gas” in the Marcellus and Utica shale plays has brought numerous midstream companies to the forefront of the natural gas industry. Now that there seems to be an enormous amount of natural gas in storage, addressing how to get it to market is another situation altogether.

Numerous pipelines, or infrastructure, have been proposed within Pennsylvania to carry gas to places like New York, New Jersey, and other east coast states like the Carolinas. It is expected that these pipelines will someday bring natural gas to millions of homes and businesses.

But many people are surprised to see that it takes years for these projects to start, and even longer to be completed.

According to Blaine A. Lucas, shareholder at Babst Calland law firm of Pittsburgh whose expertise is in the public sector services of energy and natural resources, there are numerous factors leading to a completed pipeline project.

“It’s fair to say that we have had this dramatic increase in potential supply of natural gas from all the exploration and production companies, but the pipeline infrastructure is not in place to bring it to market,” Calland said in a telephone interview from his Pittsburgh office. “Just from an economic standpoint, the cost of constructing (the infrastructure) in place is significant.

“Combined with the myriad of regulatory issues at the local, state and federal level, the combination of those factors to put it in place with approvals beforehand has been daunting.”

Lucas said the regulatory levels between constructing and fracking a rig is different by leaps and bounds from constructing infrastructure.

“A pipeline is hundreds and hundreds of miles, compared to a well site,” Lucas said.  He said there are three issues that the midstream industry is facing:

First, there is too much gas.

“You have significant increase in production because of the thousands of wells in the state, so now there is inadaequate infrastructure to move the gas to market,” Lucas explained. “Next, you need to go through many hurdles of regulatory issues. There is significant time and cost involved in building that infrastructure.”

Lastly, there are regulations, rules, and more regulations.

“You’re not just dealing with one or a limited number of properties, you’re dealing with hundreds and thousands of properties within hundreds of miles,” Lucas said, specifically citing issues with obtaining permits, rights-of-way, and more.

Additionally, there has been a changing level of regulations within the numerous layers of government and regulatory agencies.

Lucas said that, depending on local zoning ordinances, the local governments vary greatly on how they address pipelines. Some interpret the ordinances to not apply to pipelines; therefore there aren’t really any public requirements.

Or, officials may treat pipelines as a permitted use by right, which as long as the requirements are met, the company can then apply for a permit.

In a third situation – which mostly is the case with well pads — pipelines may be authorized by conditional use, which requires a hearing by the local government body, which is usually a board of township supervisors or an appointed zoning hearing board.

“This is where these issues tend to bubble up to get to the public realm,” Lucas said. He said opposition to the construction of pipelines varies.

“Unless it is an inter-state, federally regulated pipeline, there is no power of eminent domain,” Lucas said. “So if a property owner doesn’t want to sell, they don’t have to. But that is just a private property issue.”

Lucas said most opposition is drive by the NIMBY syndrome – Not In My Back Yard – which is a characterization of opposition by residents to a proposal for a new development or construction project because it is close to them, often with the connotation that such residents believe that the projects are needed in society but should be further away.

“Most of opposition is driven by NIMBY,” Lucas said.  “Some is philosophical, others are from greenhouse gas or as it pertains to environmental issues. And some are just opposed to natural gas development in general,” Lucas said.

Lucas added that in the western part of the nation, there aren’t a lot of gathering lines and issues surrounding them. “but I do hear of them in the northeast part of Pennsylvania in Tioga, Bradford and Susquehanna counties where drilling is big,” Lucas said.

 

Marcellus and Utica: What’s Ahead for 2015?

Exciting times are forecast for the Shale industry in 2015 and beyond. Ten Marcellus and Utica interstate pipeline projects are in the process of development. The state will host the first two liquid natural gas (LNG) facilities in the Northeast built exclusively for LNG-powered tractor-trailer fleets and drilling rigs. More homes and businesses in Pennsylvania are expected to use natural gas next year for heating and cooking as utilities bring gas to underserved areas. And four our ethane cracker plants have been proposed for the Appalachian Basin, which are expected to draw a host of manufacturers to our region.

Two new natural gas liquefaction plants

REV LNG, based in Ulysses, supplies LNG-powered, 18-wheel-truck fleets and gas drilling rigs, using its own LNG-powered cryogenic delivery fleet. Natural gas must be cooled to 260 degrees below zero to become liquefied for more compact storage and transport as opposed to compressed natural gas (CNG).

For REV LNG to remain competitve with diesel fuel suppliers, the company has to deliver LNG to fleets and rigs within a 400-mile radius of a liquefaction plant. The problem is that large LNG plants were built to serve the natural gas utility market. As a result, in the winter months when LNG is in its greatest demand for heating homes and businesses, REV LNG supply gets cut off.

“It’s difficult to be in a distribution business when you’re feedstock can be cut off three out of 12 months a year,” said David Kailbourne, REV LNG owner.

“By having smaller merchant LNG plants that sell directly to the distribution market and not the utilities, we will provide a safe, secure supply of fuel for ourselves as well as our customers.”

The company’s first LNG plant will be built in Herrick Township in Bradford County and produce up to 50,000 gallons of LNG per day. The second LNG plant will be located south of Pittsburgh. Both plants are expected to be operational by fall of 2015.

The other end of the LNG transportation business is fueling the truck fleets and drilling rigs. LNG gas stations cost between $2 to $5 million to build. Fureling long-haul trucks would require hundreds of LNG stations in the Northeast and thousands of LNG stations across the country.

“We realized we couldn’t build all that infrastructure, so our business model targets the 60 percent of the 18-wheeler truck fleets that return to base each day after traveling up to 700 miles,” said Kailbourne. “We provide companies with a private fuel island, which is a mobile LNG fuel tank and dispensing unit. We own it, insure it, service it, and maintain it. The new LNG plants will make us a one-stop shop.”

REV LNG received an $800,000 grant from the state Dept. of Environmental Protection to help with the construction of the plants.

Utilities serve Marcellus gas to new customers

When the shale gas industry arrived, it made two promises: new jobs and a cheap source of energy.

The jobs came and continue to grow, but the only Marcellus gas Pennsylvanians received was co-mingled in interstate transmission lines with more expensive Gulf Coast gas, and that reduced price gas went primarily to urban customers already receiving natural gas.

Three new gas utility projects aim to bring Marcellus gas to underserved areas in the state. Last month, UGI Energy Services Inc., headquartered in Reading, completed its Union Dale Pipeline project, which consists of six miles of 12-inch diameter pipeline that takes Marcellus gas from Clifford Township to the UGI Penn Natural Gas system in Union Dale in Susquehanna County.

The new pipeline can transport up to 100 million cubic feet of gas per day, which could serve about 500,000 homes, according to the American Gas Association.

UGI also made upgrades to its Manning Compressor Station in Washington Township in Wyoming County, which added 50 million cubic feet of capacity to deliver gas from Susquehanna County north to the interstate Tennessee Gas Pipeline and south to the Wilkes-Barre area and the interstate Transco Pipeline, which runs through Luzerne County.

“Today, UGI gets 80 percent of its supply from Marcellus gas, which allows the company to charge customers 30 percent less than it did in 2008,” said Terry Fitzpatrick, president & CEO of the Energy Association of Pennsylvania in Harrisburg, the trade group for the electric and natural gas utilities in Pennsylvania. “Homeowners who convert from fuel oil save an average of $1,500 per year.”

Peoples Natural Gas, headquartered in Pittsburgh, recently proposed a cost-share program to serve Marcellus gas to customers in the Gallitzin-area in Cambria County. Building new pipelines carries an upfront cost of millions of dollars, which prevents gas utilities from investing in areas where there’s not density population or a high usage industrial “anchor” customer.

Under the new program, Peoples Natural Gas would front the cost of the new pipeline and then charge customers $70 per month with about 11 percent interest until the pipeline was paid off. Even with the charges, Peoples claims that customers would realize energy savings as soon as they switched over.

“With this abundant supply of Marcellus gas available and its accompanying lower price, there’s pressure on gas utilities to build out the system to serve new customers who previously weren’t on the system,” said Fitzpatrick. “Some utilities such as Peoples already have filed cost-sharing programs with the PUC to make it easier for customers in underserved areas to receive gas service.

Shell buys property for cracker plant, three other crackers planned

Three years ago, Shell leased the former Horsehead Corp. zinc smelter site in Monaca, Beaver County, to explore the feasibility of building an ethane cracker plant, with an estimated cost from $2.5 to $3 billion.

It would be the first cracker plant built in the Northeast. A “cracker” converts ethane, a by-product of natural gas, to ethylene, which is used to make plastics, plastic bags, antifreeze and detergents.

.After three lease renewals, Shell exercised its option to buy the property on Nov. 7. The company said the purchase will help advance the permitting process. Shell has applied for an air-quality permit and has contracted with Consol Energy Inc. to ship ethane to the proposed plant. Consol is drilling 45 wet gas wells on 9,000 acres at the Pittsburgh International Airport.

Shell will hold a meeting with engineers on Dec. 8 at the state Dept. of Transportation building to talk about the next phase of the Route 18 realignment.

“Shell has talked with Trumbull Corporation and Mascaro Construction, both headquartered in Pittsburgh, who will potentially design and construct the $60 to $90 million road realignment project,” said Beaver County Commissioner Joe Spanik. “Shell is also having two new piers built on the nearby Ohio River, which they’re working on with the Army Corps of Engineers.”

Shell has hired Bechtel, a San Francisco-based, international engineering and construction firm, to build the plant. Bechtel’s specialties include pipelines, oil & gas field development, and building refineries and petrochemical facilities. The company employs 53,000 worldwide and earned $37.9 billion last year.

“Shell has held a series of public meetings to keep residents informed about what the company is doing and to address any issues, for example, Shell reps held a meeting two weeks ago in Lincoln Park to discuss environmental impacts,” Spanik said.

In addition to meetings, Shell is also sending representatives into nearby communities such as New Brighton and Beaver Falls to discuss the project with local residents.

Three other cracker plants have been proposed within a 750-mile radius of Pittsburgh.

Odebrecht, a Brazilian petrochemical company, has proposed a cracker plant complex, called Project Ascent, 10 miles outside of Parkersburg, W.Va. The complex would include an ethane cracker plant and three polyethylene plants.

Appalachian Resins Inc. recently announced plans for a $1 billion cracker plant in Ohio on a 50-acre site along in Salem Township, Monroe County, which like the Shell property, sits next to the Ohio River.

PTT Global Chemical of Thailand and Marubeni Corp., a Japanese trading and investment house, are considering the former site of Wheeling Pittsburgh Steel Chemical in Allenport, Washington County, as a possible location for a cracker plant. The site sits next to the Monongahela River and is accessible by rail.

“All of this interest in building cracker plants here gives us even greater optimism about a future economic boom for the Appalachian Basin as manufacturers are attracted to the region to be close to the feedstock,” said Spanik.

Charitable giving extends beyond the holidays for ‘good neighbor’ Shale gas companies

In early September when Williams’ largest fundraising event featured natural gas companies grilling pulled pork, beef brisket and pork ribs in the late summer heat vying for top Williams BBQ honors, the last thing they were probably thinking about was the winter holiday season.

The Barbecue Cook-Off is Williams’ largest fundraising event to benefit the United Way in northeast Pennsylvania. Williams matches all proceeds from the event, dollar for dollar.

In 2014, Williams raised more than $70,000 in its third season, a 40 percent increase from 2013. With the pledged Williams match, the company provided about $140,000 to local United Way agencies.

Referred to as a “signature event” by Williams’ public outreach representative Mike Atchie, the annual BBQ is more than just bragging rights.

“We wanted to do something to drive interest in (United Way)”, Atchie explained.  “Some companies do golf outings, but this is our industry.  Many Marcellus-related companies have cooking equipment like giant grills or smokers to cook for their workers. So we bring them in for a fundraiser, make it a compettion and have some fun.

“The idea is to continue to build on this and make it our signature event for the Northeast,” Atchie said.

Many teams were from local natural gas production or pipeline companies or contractors working in the Marcellus Shale. According to Atchie, rather than pick and choose which charitable organizations the company should donate to, it was better to donate to the local United Way organizations in the Marcellus shale area so that the funds could be distributed more uniformly.

The Williams BBQ is just one of many examples of how the shale gas companies are giving back to the shale communities.

In 2012, Tropical Storm Lee wreaked havoc in the northern and central Pennsylvania regions, mostly due to massive flooding.

According to the Marcellus Shale Coalition (MSC), member companies controlled their operations in northern Pennsylvania to ensure no environmental damage was incurred and no well pads were compromised.  At the same time companies operating in the flood-affected areas also stepped up to pledge valuable financial resources, work hours, supplies, and expertise to help communities heal more quickly in the wake of the flooding.

In total, MSC member companies donated approximately $1 million in financial and in-kind contributions to impacted communities in the days following the flood conditions.

Shale companies say they are being good neighbors with the commitment to the communities in which its employees live and work. MSC member companies Anadarko Petroleum CorporationCabot Oil & GasChesapeake EnergyChief Oil & GasEXCO ResourcesPennsylvania General Energy, Penn Virginia Resource (PVR) Partners, Range Resources, Talisman Energy USA, Williams, and XTO Energy, among others provided financial contributions to numerous organizations like the American Red Cross, Meshoppen Volunteer Fire Company, and Lycoming County Chamber/First Community Foundation of Pennsylvania to name a few.

According to Joseph T. Kolarik, CPA, MBA and tax director at SF&Company, CPAs and Business Advisors based in State College and York, most businesses, regardless of size, want to be good neighbors regardless of the season.

“Business owners, no matter the business structure, feel a sense of responsibility or need to give to the charitable organizations in the community that they operate in,” Kolarik said. “The charitable interests do vary, but most business owners give charitably to local or national charities, depending on the scope of their businesses.”

And of course, businesses are likewise rewarded for their charitable efforts.

“Businesses do receive a tax deduction for their contributions, and it’s a way to promote a business in the community. But those motivations are not the primary motive,” Kolarik continued. “There are many businesses with marginal profits that give charitably.

“It all comes down to the charitable human interest of the owners.”

Entries for 2015 Northeast Oil & Gas Awards now open

Entries for the much-anticipated 2015 Northeast Oil & Gas Awards will continue to be accepted until the submission deadline of Thursday, Dec. 11.

The event, which is also sponsored by media sponsor Marcellus Business Central, will feature an awards gala dinner on Wednesday, March 25, 2015 in Pittsburgh.Oil-&-Gas-Awards

The Oil & Gas Awards is a 5-star red carpet, tuxedo affair that attracts the most senior and well-respected leaders within the oil and gas industry. The Industry Summit brings together the leading organizations in each region to network and share their experiences on the topics most important to the industry.

The awards are a platform for the oil and gas industry to demonstrate and celebrate the advances made in the key areas of environmental stewardship, efficiency, innovation, corporate social responsibility and health & safety.

In addition to the awards event, the Northeast Industry Summit will be held immediately preceding the awards gala dinner. The Northeast Industry Summit will provide an extended platform to deliver strategic and operational business insights that have clear commercial benefits. The draft agenda will be released shortly.

Listed below are the categories for the upcoming awards.

After the entry deadline, all entries are correlated by region and category into judge’s packs. The packs are sent to the judges for review, voting and to pass comment on. The judge’s votes are correlated to define the shortlist of finalists for each region.

Judging will take about four weeks. After the judging period, the finalists will be announced on the Oil & Gas Awards Website and by the association and media partners.

After the finalists’ announcement, the events team will be in touch to deliver the finalist’s logo badge and press release so finalists can promote their achievements.

Finalists will also need to provide marketing assets such as high-resolution logos and corporate bios. Organizations entering the awards and are voted finalists by the awards judging panel must attend the relevant awards gala dinners for all of the regions in which they are voted a finalist. Finalists are asked to budget to attend the awards and schedule availability of attendees.

Pricing is available at www.oilandgasawards.com/2014-pricing/.

Information about how to enter can be found at www.oilandgasawards.com. Companies requiring assistance with writing an entry or who have questions can contact the Oil & Gas Awards’ editorial team to assist with the entry process by contacting info@oilandgasawards.com or by telephone at (210) 591-8468.

 

New programs launched to increase affordable access to natural gas

A Columbia Gas of Pennsylvania, Inc., pilot program approved in late October by the Pennsylvania Public Utility Commission (PUC) will provide a new way to bring natural gas service to those who request it.

A similar program launched by UGI Utilities Inc – the Get Gas Program – is likewise designed to provide natural gas service to additional areas, which are currently unserved or underserved.

At the recent Keystone Energy Forum held at the Nittany Lion Inn in State College, Columbia Gas spokesman Russell Bedell explained the residential situation in Centre County.

“There are 7,400 miles of (natural gas) pipe in Centre County, serving 12,000 customers,” Bedell said. “Columbia Gas now has a new area service program to help grow that customer base, and bring natural gas to people who want it.”

The new program means many potential Columbia Gas customers will have an option to pay for all or a portion of their natural gas line extension payment over a period of 20 years, rather than with just the lump sum payment that Columbia Gas has historically been required to charge.

A typical cost for a property owner to access a natural gas line averages about $10,000 – and with the new program, that cost can be broken down and added to the customer’s monthly payment as opposed to paying it up front.

“We are excited that the PUC has given us the opportunity to bring natural gas to more Pennsylvanians who are not currently adjacent to existing natural gas pipelines,” said Columbia Gas President Mark Kempic. “The Commission’s initiative in approving this program furthers the goal of making natural gas more readily available to residents of Pennsylvania, the second-largest producer of natural gas in the country. Natural gas can be as much as 40 percent less expensive than other home energy choices, so now is a great time to be a natural gas customer.”

The company’s current procedure for any extension of gas mains to serve new customers is to perform an economic analysis and determine if the cost of the pipeline extension can be justified by projected revenues, or if an upfront payment needs to be made.

Instead of paying the entire amount up front, under the new program, qualifying customers may be able to pay all or a portion of the upfront payment through a monthly charge of “up to” $35 for new gas service.

UGI’s GET Gas program will be available initially as a 5-year pilot to customers of UGI Utilities – Gas Division, UGI Penn National Gas and UGI Central Penn Gas. Under UGI’s plan, GET Gas customers will pay a monthly surcharge over a 10-year-period to cover the cost of the main extension rather than making a substantial up-front contribution.

GET Gas is projecting that UGI may extend natural gas service to a reasonable prospect of 50 percent or more of existing homes along the main extension, and will convert their primary heating service to natural gas over the next 12 years, provided the cost of the main extension is greater than $15,000 and expected costs per new customer doesn’t exceed $10,000.

CBICC expo draws crowd

STATE COLLEGE, PA — Leaders from more than 80 businesses gathered at The Penn Stater Conference Center Hotel for the Chamber of Business and Industry in Centre County’s (CBICC) annual business expo on Thursday, Nov. 20. The event brought together professionals in industries ranging from food vendors to health care to share their tips and tricks with one another.CBICC photo

Dolce Vita Desserts owner Mary Hilliard returned to cater the expo for her second year, providing attendees with a sweet treat as they walked through the door.

“Any time I can get my product out there and in people’s mouths, I do it,” Hilliard said. “Any little bit is good for my business.

Networking was a focus for the event, and vendors were given the opportunity to make connections through speed networking, which was set up in a speed-dating type format.  The members of the CBICC also placed a major focus on social media with the help of the marketing sponsor Impressions WHQ.

“We heavily promoted the #cbiccexpo hashtag on Twitter and also brought back the ‘fan favorite’ contest on Facebook, which was won by THON,” said CBICC Communications Director Lesley Kistner. “New this year was a “selfie station,” where exhibitors/attendees were encouraged to take selfies and post them on Twitter. It was nice to see people having fun with that.”

Highway and bridge construction revived by Act 89

On Oct. 24, the state Public-Private Partnership Board (P3) and Department of Transportation (PennDOT) announced that the Plenary Walsh Keystone Partners won the competition for the $889 million P3 Rapid Bridge Replacement program. The partnership will replace 558 structurally deficient bridges in the commonwealth in the next 48 months.

According to the American Road and Transportation Builders Association, more than 5,200 of the commonwealth’s 22,600 bridges – about 23 percent – are rated structurally deficient under federal guidelines, more than any other state.Act-89-opening-pic

Although some dramatic bridge collapses in the U.S. have made the news in recent years, the state’s structurally deficient bridges are not about to fall down. The weight restrictions placed on them, however, can force commercial drivers whose trucks are over the weight limit to go miles out of their way to pick up and deliver goods, adding transportation costs and forcing drivers to detour through narrow streets designed for local traffic.

The P3 board consists of many members of the construction industry, including Plenary Walsh Keystone Partners – a consortium comprised of the Plenary Group, The Walsh Group, Granite Construction Company and HDR Engineering.

The P3 team also includes 11 Pennsylvania-based subcontractors, including five from the region:

• Glenn O. Hawbaker Inc. of State College, Centre County

• J.F. Shea Construction Inc. of Mount Pleasant, Westmoreland County

• Larson Design Group of Williamsport, Lycoming County

• Swank Construction Company of New Kensington, Westmoreland County

• TRC Engineers, Inc. of Export, Westmoreland County.

The P3 program is one of the first public-private partnerships in the nation to construct hundreds of bridges under a single contract.

The Plenary Walsh team will privately fund the design, build, and maintenance of the bridges in exchange for periodic payments from the state raised through a bond program. Under the 28-year contract, the project will cost an average of $65 million annually.

According to PennDOT, the P3 program could save the state more than $220 million, because the average cost per bridge under the P3 contract is $1.6 million versus the state’s average of over $2 million per bridge.

The Transportation Funding Act of 2013 (Act 89)

Glenn O. Hawbaker of State College, one of the P3 team’s subcontractors, had been receiving about half of its annual revenue from highway projects before the Great Recession. When federal and state highway funds dried up, the company was forced to lay off 300 employees.

Hawbaker won the first stimulus highway project in Pennsylvania and hired some of the workers back, but those “shovel ready” projects were short-lived. Of the $700 billion in stimulus funds, only $27 billion were allocated to infrastructure across 50 states.

To compensate for the lack of road work, Hawbaker diversified into new areas including building a railroad terminal for offloading asphalt and salt for Penn DOT, making mulch for State College’s parks, recycling building materials, and constructing roads and well pads for the Shale gas industry. In the past five years, the company rebuilt its workforce to more than 1,400 employees.

Act 89 was signed into law last year by Gov. Tom Corbett to fund road projects, bridge repairs and public transit. The new law has provided $2.4 billion in transportation projects this year so far, and by 2018, transportation projects will get an additional $2.3 billion per year, which makes it the largest increase in state transportation infrastructure funding in decades.

“Now we have some backlog, which gives us the ability to plan our business in advance and know where we’re going,” said Charlie Campbell, director of special projects at Hawbaker. “Act 89 finally put us in position to repair our roads and update our infrastructure for the 21 century.

“What’s unique is that it’s not just a year or two funding like the federal highway bill, but it’s ongoing and doesn’t require periodic renewal,” Campbell said.

Hawbaker picked up 25 highway and bridge projects in the past six months, representing about $150 million worth of business. The company expects to receive between 50 to 60 percent of its revenue from highway and bridge work next year and to hire new workers.

Finding those workers might be challenging, according to Jason Wagner, director of policy and government relations for the Associated Pennsylvania Constructors (ABC), Harrisburg.

“During the recession, a lot of highway construction workers were laid off and are working in other industries such as the Shale gas industry or building trades where there was more stable employment,” said Wagner. “Now that we have the funding in place and know that it’s going to increase, we have to engage in some comprehensive workforce development efforts in order attract workers back to the highway construction industry again so we can staff these new projects.

Wagner said most job positions require workers with technical skills, including basic computer knowledge. The company is working with Penn DOT to develop workforce development programs, as well as unions, which have new training centers.

Another contractor in the region benefitting from Act 89 is Jay Fulkroad & Sons, a family-owned business in McAlisterville, Juniata County.

On Oct. 23, Fulkroad won a $2 million contract to construct a small bridge as part of three-phase Potters Mills Gap Project near the Centre/Mifflin County line to west of S.R. 0322 / PA 144 intersection. The goal is to improve safety, reduce congestion, enhance mobility and alleviate access concerns by building a bridge across the mountain gap and a 4-lane roadway that will pass near State College and then run south to Seven Mountains.

“The design engineering for the bridge will be starting in a couple weeks and will take about 45 days to complete,” said Don Peck, Fulkroad’s project manager. “We anticipate starting construction sometime in December or January, depending on the weather.”

The bridge needs to be built before the roadway construction begins on Sept. 1, 2015.

The new bridge will connect the two sides of the mountain to provide a crossing for the Seven Mountains Campgrounds, which is 15 miles east of State College.

Fulkroad’s Act 89 projects range from $900 million to $2.5 million. The company also won the bid on a $4 million dam rehabilitation project. Fulkroad was forced lay off 50 workers during the recession and now has 75 employees.

While Peck is happy about the Act 89 funding, he remains somewhat critical of the plan.

“The state might save millions of dollars with the public-private partnership, but the bulk of the millions being spent on the 558 bridges is going to companies based outside of Pennsylvania,” Peck said. “The rest is going to only 11 large firms based in the state, because it’s hard for smaller companies like ours to compete with larger firms since they have economies of scale.

“If Penn DOT was in charge of the bridge program, they probably would have broken the jobs into more pieces and employed more small firms,” Peck continued. “But at least those structurally deficient bridges are finally getting replaced, and that’s a good thing for Pennsylvanians.”

Baby boomers grow health and rehabilitation industry

Long before health and fitness was promoted by celebrities such as Jane Fonda and Richard Simmons, “the godfather of fitness” hosted the first fitness television program in 1953 by way of the self-named Jack LaLanne Show. Dressed in a black jump suit and black ballet slippers, his show was aimed toward “the ladies,” whom he encouraged to join his new health clubs.

LaLanne paved the way for the development of the fitness center industry, which burgeoned in the 1970s and 1980s when running and aerobics became popular. Membership in health clubs continued to grow throughout the 1990s, with a tremendous growth spurt in the early 2000s when franchise fitness clubs such as Planet Fitness, Gold’s Gym and Anytime Fitness began popping up around the country.

The revenue of U.S. health clubs reached a new high of $22.4 billion in 2013, nearly a 100 percent increase in revenue since 2000. This increase is reflected in the total number of memberships at fitness centers in the U.S., which rose from 32.8 million to 52.9 million during that timeframe.

About half of all health club members belong to commercial health clubs, with the remainder divided between non-profit clubs such as the YMCA and for-profit clubs such as corporate clubs, country clubs or spas.

In the 1970s, the Kindler family opened its first full service health club in Camp Hill near Harrisburg. Membership included access to fitness equipment, exercises classes and custom tailored programs by fitness instructors.

“Over the years, we’ve run every type of model of fitness center you think of, but the no frills, affordable and inclusive Planet Fitness model is by far the greatest and most successful we’ve found,” said Steve Kindler, Jr., owner at Kindler & Crimmins Associates.

The Kindler family owns nine Planet Fitness franchises in central Pennsylvania and plans on opening a tenth club next to Sears at the Nittany Mall in State College on December 17.

Typically, during the club’s busy season, 1,400 to 1,700 people a day visit the clubs. Planet Fitness relies on volume business since basic membership only costs $10 per month. Members can upgrade to a Black Card monthly membership for $19.99, which allows them to work out at any Planet Fitness in the country.

The new club will have two entrances, one inside the mall and an exterior entrance. Even though the mall closes at 10 p.m., Planet Fitness will be open 24/7.

“The best thing about Planet Fitness is our ‘Judgment Free Zone,’” said Kindler.

“We provide a completely different atmosphere than other health clubs, because we don’t cater to the heavy weight lifters and body builders, but instead we’re structured around general fitness and first time gym users, and we provide a fun, comfortable environment to work out.”

A Planet Fitness member could be a 20-something preparing for a marathon or an elderly person who just wants to walk on the treadmill to maintain fitness. The clubs have gym equipment and fitness instructors but no exercise classes, which helps keep costs low.

Megan Lynch, public relations manager at Planet Fitness headquarters in Newington, New Hampshire, explained the company’s philosophy.

“Our motto is, ‘We’re not a gym, We’re Planet Fitness,’ because our clubs are where all the awesome Janes and Joes of the world – everyday people – can feel comfortable working out at their own pace without judgment from other members,” said Lynch.

“Our members can work out for 2 hours or 2 minutes and not feel judged on their physical appearance or level of activity.”

Planet Fitness has more than 850 locations in 47 states. By the end of next year, that number is expected to rise to over 1,000 franchises nationwide.

Rehabilitation centers

The flip side to wellness is getting back in shape while recovering from an injury or illness. Outpatient rehabilitation centers aid this process by offering physical, occupational or speech therapies often using the same fitness equipment found in health clubs.

The U.S. outpatient rehabilitation market is estimated to be a $19 billion industry with a projected annual growth rate of five percent or higher. Given the aging and active U.S. population, the demographics favor a sustained growth in patients requiring rehabilitation services.

HealthSouth, headquartered in Birmingham, Alabama, is one of the nation’s largest healthcare providers, specializing in rehabilitation hospitals and outpatient centers. The company operates as HealthSouth Nittany Valley Rehabilitation Hospital in Pleasant Gap and as HealthSouth Rehabilitation Hospital of Altoona. The Nittany Valley hospital has an outpatient rehab center onsite and two in Burnham and Mifflintown in Mifflin County.

HealthSouth Nittany Valley’s outpatient rehab centers treat the entire spectrum of clients – a young person with a sports injury, a 30-year-old with a stroke, a 60-year-old with Guillain–Barré syndrome, or an 80-year-old recovering from a hip replacement, for example.

While about 15 percent of the patients are from the rehab hospital, most come as outpatients referred by their doctors.

“One of the biggest changes we’ve seen is the cap on what Medicare will pay for rehab therapy,” said Tracy Everhart, OTR/L, manager of outpatient therapy services and an occupational therapist at the center.

“There are different tiers, but the initial cap is $1,920 for the calendar year, and unfortunately, physical therapy and speech therapy have to share that money.

“Occupational therapy has another pool of money patients can use, but we must stay within those government allowances, so we’ve had to be creative on how we can maximize the patient’s time in therapy.

Everhart or another therapist will do an initial assessment, and if someone who has had a mild stroke is doing well, he may be scheduled for therapy three times a week to him the maximum amount possible for a shorter period of time.

If a patient had a brain injury or a very severe stroke and is not expected to be rehabilitated in a couple months, the therapist might decrease the therapy to twice a week or once a week to extend the amount of time he is able to be seen.

Another major change in the rehabilitation industry is that physical therapists are now required to hold a Doctorate of Physical Therapy. This was due to the American Physical Therapy Association’s constant push for raising standards in the profession, but it is not required by state law. Formerly, a master’s degree was acceptable.

Most physical therapy is performed by a physical therapist assistant, which is a two-year degree, but assistants must work under the supervision of a PT with a doctorate.

“How this change impacts rehabilitation centers depends on where you are,” said Everhart. “In Pittsburgh, there are a lot of PT schools so it’s pretty easy to find a Ph.D. to fill a position, whereas to fill a position in Mifflintown it could take much longer, and you might have one or two applicants instead of five or six to choose from.”

According to the U.S. Bureau of Statistics, physical therapists with a doctorate earn just under $80,000 annually.

The other program HealthSouth recently implemented is called the Big and Loud Program, which was specifically designed for Parkinson’s patients.

“There’s now a lot more education for the patient, with the goal of getting the patient to sustain what we’ve been working on in therapy at home,” said Everhart.

The Big and Loud Program teaches Parkinson’s patients how to walk without shuffling, or other ambulation issues.

“As the aging population continues to grow, we expect to see more and more patients with age-related problems,” said Everhart. “We’re gearing up for this by furthering our knowledge of rehabilitation for the elderly population.”

Keystone Energy Forum comes to Centre County

STATE COLLEGE, PA – About 80 people gathered at the Nittany Lion Inn on Friday, Nov. 14 for the first Keystone Energy Forum (KEF) held in Centre County. The event was sponsored by the Centre County Chamber of Business & Industry (CBICC) and media sponsor Marcellus Business Central.

KEF was formed several years ago to educate citizens about natural gas development within the Marcellus and Utica shale regions.

The forum and luncheon featured discussions about Act 13 Impact Fees, the state of shale in Centre County itself, and how the Shale industry has brought local businesses and entrepreneurs success in the industry.

“KEF was formed to give the general public facts about the shale gas industry, and let them decide on their own,” said KEF Director Bill Stewart.

Stephanie Catarino Wissman, executive director at Associated Petroleum  Industries of Pennsylvania (API), discussed Act 13 and related impact fees awarded to Centre County. She also pointed out that the natural gas industry has contributed about $34.7 billion into the state’s economy.

“We have a glut of natural gas,” she said. “But we have a shortage of infrastructure to get that gas to market.”

Catarino Wissman identified one of the problems facing the infrastructure shortage is a lack of laborers and skilled workers. API has launched a campaign to recruit the next generation of oil and gas workers via it’s new Web site: www.oilandgasworkforce.com. The site was launched in June.

David Yoxtheimer, a hydrogeologist and extension associate with Penn State University’s Marcellus Center for Outreach and Research (MCOR), provided natural gas statistics related to Centre County.

“Things are slowing down in Centre County as far as new wells drilled,” Yoxtheimer said. He said there are 65 wells drilled in the county, with 48 listed on the latest production report and 24 are active producing. There have been no new wells drilled since 2011.

“We won’t see gangbuster numbers (in Centre County) like in Susquehanna,” Yoxtheimer said. But he did point out that Pennsylvania is leading the nation in the storage of natural gas. He said the natural gas lines that have been used to send gas to storage are now being considered to transport it to the global market.

And Russell Bedell, manager of communications and community relations at Columbia Gas of Pennsylvania, said gas companies like his are thinking outside the box to get natural gas to more customers.

A Columbia Gas of Pennsylvania, Inc., pilot program was approved about a month ago by the Pennsylvania Public Utility Commission (PUC), and will provide a new way to bring natural gas service to those who request it.

The new program means many potential Columbia Gas customers will have an option to pay for all or a portion of their natural gas line extension payment over a period of 20 years rather than with just the lump sum payment that Columbia Gas has historically been required to charge.

The company’s current procedure for any extension of gas mains to serve new customers is to perform an economic analysis and determine if the cost of the pipeline extension can be justified by projected revenues, or if an upfront payment needs to be made.

Under the new program, qualifying customers may instead be able to pay all or a portion of the upfront payment through a monthly charge of “up to” $35 for new gas service. As Columbia Gas pilots this new option over the next four years, up to $1 million in customer deposits may be spread over 20 years, thereby enabling millions of dollars to be invested in line extensions to increase affordable access to safe, efficient, and clean-burning natural gas where the company does not currently have facilities available.

Dr. Jeremy Frank, president of KCF Technologies Inc. in State College, spoke about how the gas industry has directly or indirectly assisted small business owners and entrepreneurs like himself become more profitable.

Frank co-founded his company after earning a Doctorate in mechanical engineering. He has worked for fifteen years on the development and commercialization of electromechanical devices, with the recent focus on wireless sensors for continuous  monitoring of machinery.

He saw a huge opportunity within the oil and natural gas industry to market a breakthrough new capability to improve the safety and reliability of upstream operations in the northeast region of the state. Wireless sensor systems monitor when the equipment is being damaged, identifies the component and severity of the damage, and enables the operators to take action – before the equipment breaks or becomes severely damaged.

“Ten percent of our economy is wasted due to breakdowns,” Frank said. “KCF is a technology development company trying to make things work smarter. We want to predict and prevent a problem before it happens.”

CBICC Communications Director Lesley Kistner said this is the first time a Keystone Energy Forum was held in Centre County.

“We were pleased with the turnout from a broad cross section of our membership,” Kistner said. “There was great interest in learning how our county is benefitting from shale gas drilling. We received a lot of positive feedback from attendees, particularly for the opportunity to hear directly from a local company that has developed innovative technology beginning to be used by the industry.”