CBICC forum focuses on Marcellus Shale

Jeremy Frank told a room of about 80 people that he needs to hire engineers with personalities.

He delivered his one-liner with a smile, but he couldn’t have been more serious.

Frank, the president of State College-based KCF Technologies, was one of five speakers for the Keystone Energy Forum that focused on the Marcellus Shale natural gas industry. The Chamber of Business and Industry of Centre County organized the forum Friday at the Nittany Lion Inn.

Frank got KCF Technologies into the natural gas industry about a year ago, offering wireless vibration and temperature sensors in well pads to detect abnormal behaviors in equipment.

The move has paid off.

“This industry will probably be responsible for at least half of our revenues for the next three years, so it’s defining our growth and is the source of our growth,” Frank said.

Consequently, he said, his company is seeking to hire engineers who can engage people in the field.

“Our work is to go out and solve mechanical problems before they happen,” he said. “That’s done through software and data, but it’s delivered through our sale engineers’ boots on the ground that can go out and solve mechanical problems in real life.”

The country is on pace to break natural gas production records, but Centre County has not reached its potential.

Only half of the county’s 48 Marcellus Shale wells are in production, and no new wells have been dug since 2011, according to Dave Yoxtheimer, an extension associate with Penn State’s Marcellus Center for Outreach and Research.

“There’s room to put in wells, roughly 175,000 acres, so there’s that much room to drill,” Yoxtheimer said. “What I really think it boils down to mostly is the economics. The price of natural gas is around $4 per 1,000 cubic feet, which can be profitable if you’re efficient.”

“To make money, higher yielding wells are obviously going to yield more profits,” he continued. “It can be profitable in Centre County, but not as profitable as some higher yielding areas in the state, so companies are focusing more on where it’s most profitable.”

Improving technology will lead to higher yielding wells, which could increase the industry’s presence in the county, Yoxtheimer said.

“You’re seeing as the geological understanding of shale increases the number of wells increases,” he said. “That’s why we’re also seeing yields increasing more. If you go back five years, it was assumed a good well in Pennsylvania would produce 5 billion cubic feet of gas, and now we’re talking about yields that could exceed that, and that’s due to geological understanding and better fracturing technologies.”

Stephanie Wissman, executive director of the American Petroleum Institute of Pennsylvania, stressed the importance of policymaking related to the industry’s growth.

“(The government) could be more expeditious with LNG export terminal applications, of which there are 22 pending today,” Wissman said. “There are nine that have been approved. Most of those facilities were import facilities, and now we’re in a situation where we can export.”

The United States now produces the most natural gas in the world.

“Up until five to six years ago the United States was an importer of natural gas,” Keystone Energy Forum State Director Bill Stewart said. “Natural gas was scarce enough to be rationed, and Congress passed an energy bill in the 1980s that prohibited the use of natural gas in anything but home heating and electric generation.”

“We’ve reversed that, and that’s why you now see things produced with natural gas engines,” he continued. “We have a homegrown domestic energy source, and a lot of it comes from Pennsylvania. Exporting will become important for us, because you can get more selling it to European and Asian countries, which helps a company’s bottom line to keep drilling here.”