Marcellus Shale Monument

Who knew what, when? That question preoccupied my mind while thinking about the possible billion dollar investment by V&M Star in Youngstown, Ohio. Why was the Mahoning Valley on the map so early on in the Marcellus Shale play? StateImpact Pennsylvania has some answers:

About 40 years ago, Scott Linde started his small company, Linde Corporation, in Honesdale, P-A, laying pipe. Linde got his first boost in 1972, when Hurricane Agnes hit northeastern Pennsylvania, destroying much of the area’s infrastructure. Then came the Clean Water Act. That meant more pipelines were needed to comply with new federal regulations on water quality. When the big box distribution warehouses like Home Depot moved in near Wilkes Barre, along routes 80, 81 and the Northeast Extension, they needed plumbing. Once again, Linde was at the right place, at the right time. Then, in 2007, just before the recession hit, Linde says he got a tip. Pay attention to something called the Marcellus Shale.

“Actually, one of the main reasons we got involved this early, within six months, is that two of my partners and good friends, we go fishing, and they live up there, and they said Scott, there’s something happening up there.”

These days, the towering Linde has actually doubled his business. Just last year, he says, his company laid 50 miles of pipes for the gas industry. Some pipes take the gas from the well to a major transmission line. Other pipe carry the hundreds of thousands of gallons of water needed to drill a well and extract the gas.

Sorting through all the hype surrounding the Marcellus Shale isn't easy. I stay focused on two facts while reading any article about the boom. First, the financial crisis didn't impede investment. I'm not sure the economic calamity affected the money at all. Policy uncertainty wasn't an issue, either. Second, the price of natural gas collapsed and has remained low. The dramatic increase in supply is real enough.

I'm sure that industry isn't going pick up and move somewhere else more tax friendly. As I've written many times, investors are pot-committed to Pennsylvania. Shale gas isn't here today, gone tomorrow. The game changing will only get more dramatic. I will end with the introduction to the StateImpact piece:

You’ve probably heard about job loss and budget cuts. So what kind of company can be building it’s headquarters with backlit marble-paneled walls from Turkey, Zebra tiled marble from Brazil with onyx trim, skylights, large windows looking out onto the Endless Mountains, an atrium with glass flooring, and marble window sills. And what kind of company is doing all of this, not in Pittsburgh, not in Philly, but, in an industrial park in Pittston? A company that lays pipe — for Pennsylvania’s natural gas rush.