Calfrac Well Services laid off about 60 workers last week from its Chester Hill office.
The cuts were due to slowed production of natural gas in central Pennsylvania that has left the company without any ongoing work, a company spokesman said.
Calfrac, a Calgary, Alberta-based company that provides oil and gas exploration companies with acidizing, hydraulic fracturing, coiled tubing, nitrogen and CO2 drilling, won’t close the office and skip town. There’s too much potential business in central Pennsylvania to leave the area, so about 10 employees were spared to maintain equipment and the facility and to support sales.
“We’re working to get more work in that area, and we’re confident that more work will come back,” Calfrac Vice President of Human Resources Ed Oke said. “This is tied to commodity prices, and we’re hoping as the year goes on prices will turn and then activity will pick up and we’ll try to rehire most of the employees.”
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The company also handed down pay cuts to employees at all levels this year.
U.S. Rep. Glenn Thompson, R-Howard Township, said uncertainty has hurt the natural gas industry.
“It is unfortunate that we have seen a decline in Marcellus-related employment, despite an increase in the volume of production,” Thompson said in an email statement. “While lower energy prices are certainly a benefit for the consumer, we need to be aware of the cloud of uncertainty that has loomed over the industry, with the most recent debate over further taxation. We must also be thinking of the next steps in our energy renaissance, including adequate infrastructure for moving product to new markets and exports to ensure continued demand.”
Moshannon Valley Economic Development Partnership Executive Director Stan LaFuria said a lack of infrastructure and low natural gas market prices are also key issues for local production.
“International and national market conditions have made it tough on the natural gas businesses,” LaFuria said. “We can’t expect them to continue to operate in an area where the activity is so low. Currently, it is the areas with the wet gas that are driving the natural gas companies.”
He said southwestern Pennsylvania and Ohio are where “there is money to be made from the other components within the gas.”
A pipline project in Snow Shoe Township could contribute to the rejuvenation of natural gas production in Centre County an it will be serviceable this year. Superior Appalachian Pipeline began installing pipe in the township May 18.