Airports and Marcellus Shale

ARCHITECTURE ● ENGINEERING ● COMMUNICATIONS TECHNOLOGY
AVIATION | CIVIL | CONSTRUCTION SERVICES | DATA SYSTEMS | ENVIRONMENTAL
FACILITIES ENGINEERING | GEOSPATIAL | NETWORKS | PUBLIC SAFETY | TRANSPORTATION
Airports and Their Assets as Economic
Engines Related to the Marcellus Shale
Industry
Gene Pietrowski
Business Development Associate
Rick Holes, PE
VP – Operations Manager – Aviation Services
April 20, 2010

The Marcellus Shale – an “Unconventional” gas play
• Basin is 600 miles in length along its axis
• Contains an estimated 500 trillion cubic feet of gas, in-place

The Marcellus Shale – an “Unconventional” gas play
The Fairway

Marcellus Drilling Permits

Companies in the Marcellus Shale Industry
• Many players in the market at the current time
• Small to large firms
• Some of the best energy companies in the US
• Leasing, Exploration, Drilling, Production, Transmission, and
Service Companies
• Potentially the largest natural gas field in the US
• Region could become the US natural gas capital

• AW Tipka Oil & Gas, Inc. (OH)
• Abarta Oil & Gas Co., Inc. (PA)
• Admiral Bay (CO)
• Allegheny Energy Devel. (OH)
• Allstate Energy Corp. (WV)
• Anadarko Petroleum (TX)
• Appalachian Drilling Co. (KY)
• Ardent Resources, Inc. (PA)
• Artex Oil Company (OH)
• Atlas Energy Resourcs (PA)
• Atlas Gas & Oil Co. (MI)
• Belden & Blake Co. (PA)
• Belmont (CA)
• Berwind Oil & Gas (WV)
• Blue Creek Gas Co. (WV)
• Boyd Oil & Gas Co. (WV)
• Cabot Oil & Gas (WV, TX)
• Cameron Oil & Gas Co. (TX)
• Campbell Oil & Gas (NC)
• Carrizo Oil & Gas, Inc. (TX)
• Carter Oil & Gas, Inc. (VA)
• CDX Gas (WV)

• CGas Exploration Inc. (OH)
• Champlain Resources (Canada)
• Chautauqua Energy (NY)
• Chesapeake Energy (OK, WV)
• Chestnut Ridge Storage (PA)
• Chief Oil & Gas (PA)
• Citation Oil & Gas (IL)
• CNX Gas Corp. (PA)
• Cohort Energy Co. (PA)
• Core Energy (MI)
• DAC (CA)
• Dale Property Services (PA)
• Dart Oil & Gas (TN, MI)
• DH. Arrington Oil & Gas (MI)
• Dee Drilling Co. (IL)
• Deep Rock Energy (IL)
• Denex Petroleum Corp. (WV)
• Domestic Energy Corp. (NY)
• Dominion E&P (WV, PA)
• Dorward Energy Corp. (FL)
• Dynatec Systems, Inc. (NJ)
• East Resources, Inc. (PA)
• Eastern American (PA)
• Energy Corp. of America (PA)

• EOG Resources (TX)
• Epsilon Energy – US (MI)
• Equitable Resources (PA)
• Equity Oil & Gas Funds (OH)
• EXCO Resources, Inc. (TX)
• Federal Oil Co. (MI)
• Fortuna Energy Inc. (NY)
• Franklin Oil & Gas (OH)
• GEOLEX, Inc. (CA)
• GeoMet Operating Co. (TX)
• GFI Oil & Gas Corp. (PA)
• Great Lakes Energy (OH)
• Great Oak Energy, Inc. (PA)
• Great River Energy (MN)
• Guardian Exploration (Canada)
• Headington Oil (TX)
• Highmount Midwest Energy (MI)
• Horizon Energy Corp. (WV)
• Independent Energy (CO)
• Interstate Gas Marketing (PA)
• IOGA of West Virginia (WV)
• Jordan Development (MI)
• Kastle Resources (PA)
• Key Oil Company (KY, WV)

• Knox Energy Inc. (OH)
• M&M Energy LLC (PA)
• Marathon Oil Co. (TX)
• McIntosh & Associates (CA)
• McIntosh Oil & Gas (WV)
• Mid-Central Land Services (IN)
• Mike Ross, Inc. (WV)
• Mountaineer Gas Co. (WV)
• Murvin & Meier Oil Co. (IL)
• Noble Energy (IN)
• Nornew Inc. (NY)
• North Coast Energy (OH)
• Northstar Energy Corp. (WV)
• Ohio Oil Gathering (OH)
• Oilsands Questm, Inc. (CAN)
• PC Exploration, Inc. (CA)
• PC Oil & Gas, USA (FL, TX)
• Penn Virginia Corp. (PA)
• Penn Virginia MC Energy (OK)
• Penn Virginia Oil & Gas (TN, TX)
• Penncara Energy, LLC (PA)
• Penneco Oil Company (PA)
• PA General Energy Co. (PA)
• PetroEdge Resources (TX)

• Petroleum Development (WV)
• Range Oil & Gas (Canada)
• Range Resources (PA)
• Rex Energy (PA)
• Riley Natural Gas Co. (WV)
• Rockwell Energy (TX)
• Savoy Energy (MI)
• Seneca Resources (NY)
• Sigma Corp. (CA)
• Snyder Associated Co. (PA)
• Sojourner Drilling (TX)
• Southern Land Co. (TN)
• Southwestern Energy (TX)
• Stephen Wilson Gas Co. (FL)
• Stone Energy Corp. (LA, TX)
• Sunrise Exploration, Inc. (IL)
• Talisman Energy (CAN)
• Tanglewood Explor. (TX)
• Texas Keystone (PA)
• Trans/Republic (TX)
• Tri County Oil & Gas (WV)
• TURM Oil & Gas (PA)
• Tuscany Oil & Gas (OK)
• TXOK Energy (OK)

• Typhoon Energy (PA)
• Ultra Gas Co. (PA)
• Ultra Petroleum (TX)
• Victory Energy (PA)
• Waco Oil & Gas (WV)
• West Bay Exploration (MI)
• Western Land Services (PA)
• Winchester Energy (LA)
• XTO Energy (TX)
• Z Oil & Gas (PA)

• The above list of companies are involved in the leasing, land
acquisition, drilling, exploration, transmission, and
distribution of natural gas
• These are called:
– Gathering
– Midstream
– Upstream

• There are multiple types of companies that work in the Marcellus
Shale Industry
• These companies provide support services to the industry
• They are also involved in the economic impact
• They include companies such as:
– Halliburton
– Superior
– Sooner Pipe
– PBT and Hart Resources
– Holloman Corporation
– BJ Services
– Universal
– National Oil Well Varco

Marrying the Marcellus Shale Industry with Airports
• What is the Marcellus Shale Industry looking for?
Land for drilling or development
Access to major highways
Access to railroads
Proximity to Commercial Service or large General Aviation airport
Available workforce
Tax breaks
Keystone Opportunity Zones

• What Do Airports Offer?
Land – typically flat and developable
Access to major highways
Some are near railroads
Aviation access
Typically near population centers
Utilities are readily available
Already noise generators
Some offer KOZ’s

• Drilling Opportunities
 Commercial – Service Airports
- Large amount of open space
• Typically at least 500 acres of land
• Pittsburgh International – 12,500 acres
- Noise is not a problem
- In most cases, water is available
 General Aviation Airports
- Open space
• Typically at least 100 acres of land
- Sometimes hedged-in by development
- May be in more rural areas

• Drilling Issues to Address
Must receive Fair Market Value for Leases
National Environmental Policy Act of 1969 (NEPA)
• Environmental Finding on Drilling
• Environmental Finding on Water Usage
• Environmental Finding on Waste Water
• Must be reviewed and approved by FAA prior to signing lease
• Typically will require a Short Form Environmental Assessment
Need to ensure Grant Assurances are met
Drill rigs must be Airspaced
Need at least 120 Days in Advance

• Drilling
PAAirports Where Drilling is Proposed or Occurring
• Pittsburgh International
• Bradford Regional
• Johnstown-Cambria County
• DuBois Regional
• Indiana County
• Connellsville
• Rostraver

• Development Opportunities
Many companies looking to locate in Northern PA
• Drilling Companies
• Pipe Suppliers
• Gas Companies
• Most are from Texas or Oklahoma
Looking for 5 – 25 acres
Some want to be ON an airport
Most want to be NEAR an airport
ALL will UTILIZE the local airport

• Development Opportunities - Airport Usage
Many companies have their own aircraft
• Fly staff to PA on Monday morning
• Fly staff back to home on Friday afternoon
• Typically 5-20 seat jet aircraft
• Some have as large as 50-passenger jet aircraft
• May need hangar space
Many use existing commercial service
• This will help attract more and larger aircraft
• May need to look at different routes

• Airport Usage Examples
Williamsport Regional (US Airways to Philadelphia)
• 50% increase in GA jet traffic
• 5% to 10% increase in passenger enplanements
• Preferred destination changed from Charlotte, NC to Dallas, TX
• Houston, TX is now a top-five destination
DuBois Regional (Continental to Cleveland)
• 10% increase in GA traffic
• No noticeable increase in passenger enplanements
University Park (Multiple Airlines and Destinations)
• Minor use by GA jet traffic
• 9% increase in passenger enplanements (May or may not be due to
Marcellus Shale Industry)

• Development Opportunities – Issues to Address
Show on Airport Layout Plan
Can’t use land identified for “Airport Development”
Can’t normally sell land – Long-term leases are preferable
Must receive Fair Market Value for Leases
• Need at least one appraisal
• Leased value must be greater than Fair Market Value
Development in construction must be Airspaced
Must receive environmental finding
Allow at least 90 days in advance

• Development Opportunities – Issues to Address
Meet early on with FAA and/or PADOT Bureau of Aviation
Need to start coordination early in the project
• Expect FAA/PADOT coordination to take minimum of 3 months
Meet early on with Local Municipal Officials
• Check Zoning
• Meet land development requirements

• Development Example
Sooner Pipe Facility at Williamsport Regional Airport
• Williamsport Regional Airport
– Located in Montoursville, PA
– 2 runways – 9-27 (6,824’ x 150’); 12-30 (4,280’ x 150’)
– Instrument landing system for all-weather usage
– Air traffic control tower
– 3 scheduled flights per day to Philadelphia
– Full-service fixed-base operator
– Apron and Hangar Spaces available
– Located within 1 mile of I-180
– Located along Lycoming Valley Railroad
– 15-acre Keystone Opportunity Zone available

• Williamsport Regional Airport

• Sooner Pipe, LLC
• World’s largest tubular distributor and logistic service provider to the oil
and gas industry
• Headquartered in Houston, TX
• Sales of $5 billion annually
• Other Locations
– Crosby, TX
– Searcy, AR
– Midland, TX
– Godley, TX
• Looking to locate a pipe yard in Central PA

• Typical Pipe Yards

• Total Leased Area = 24.3 Acres
• Plan to construct:
– 80’ x 250’ Shop Building
– 60’ x 50’ Office Building
– 60-vehicle parking lot
– Rail siding to Lycoming Valley Railroad tracks
– Two pipe storage yards

• Proposed usage
– Pipe will be delivered via rail
– Upon delivery, pipe will be threaded for use
– Stored in storage yard
– Loaded on trucks for delivery to field
– Using local trucking company
– Average time pipe spends in yard < 1 week
• Proposed employment
– Up to 75 full-time staff
– All will be hired locally and trained in Texas

Holloman Corporation Development in Montoursville
• Looking for 5-10 acres
• Near major highway
• Near railroad, preferably with spur
• Near airport
• No land on airport, so focused within a mile
• Found potential reuse of 8-acre former furniture factory
• Property owner has offered build-to-suit
• 3-year lease with option to buy

Airports and Their Assets as Economic
Engines Related to the Marcellus Shale
Industry
Thank You!!
Gene Pietrowski: (814) 472-7700, Ext. 1262 or (814) 932-7256
Rick Holes: (814) 472-7700, Ext. 1272 or (814) 659-7565

Airports and Marcellus Shale

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