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Marcellus Shale Case Study – Williamsport Regional Airport
 

Marcellus Shale Case Study – Williamsport Regional Airport

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This presentation was given by Rick Holes at the 2011 FAA Eastern Regional Conference in Hershey, Pennsylvania.

This presentation was given by Rick Holes at the 2011 FAA Eastern Regional Conference in Hershey, Pennsylvania.

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    Marcellus Shale Case Study – Williamsport Regional Airport Marcellus Shale Case Study – Williamsport Regional Airport Presentation Transcript

    • Airports and Marcellus ShaleAndMarcellus Shale Case Study – Williamsport Regional Airport
      Rick Holes, PE
      VP – Operations Manager – Aviation Services
      Tom Hart
      Executive Director – Williamsport Regional Airport
    • Aviation Industry Woes
      From 2007-2009, passenger traffic dropped by 8.2%
      2010 traffic is expected to increase, though
      Multiple airline mergers/failures have occurred
      Large, commercial service airports have suffered from
      Reduced passenger volumes
      Reduced number of airlines
      Reduced revenue
      Increased costs
      General aviation airports have also suffered
    • Aviation Industry Woes
      ASCE Infrastructure Report Card for Aviation = D (Poor)
      $46.3 billion
      Estimated shortfall is $Estimates $87 billion to upgrade infrastructure from 2009-2014
      Estimated spending is 40.7 billion
      The last AIP Bill expired in several years ago
      Congress has forced the FAA to operate under CR’s
      In 2010, 5 CR’s were issued
      As a result, funding is parceled
      Projects need to be delayed or completed in phases
      Projects are taking longer and costing more
    • Aviation Industry Woes
      In PA, the Aviation Restricted Account is has a negative cash flow
      Fuel sales greatly reduced from pre-9/11 levels
      Fuel tax cap is set at $0.02 per gallon
      In 2009/10, oil price index reduced tax to $0.016 per gallon
      Current tax rate is $0.017 per gallon
      Meanwhile, construction costs have skyrocketed
      Utility costs are increasing dramatically
    • Marcellus Shale – Aviation Savior??
      Since 2007, Marcellus Shale companies are moving into PA, WV and NY
      Focus has been on mineral rights acquisition and drilling
      Landowners have been approached by gas companies for drilling rights
      Offers started at $100/acre and have increased from there
      Royalties of up to 18+% have been offered
      Economy slowed down the movement for a while, but it’s back to full-speed
    • The Marcellus Shale Play
      Basin is 600 miles in length along its axis
      Contains an estimated 500 trillion cubic feet of gas, in-place
    • Marcellus Shale Drilling Permits in PA
    • 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
    • Companies in the Marcellus Shale Industry
      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 Resources (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)
    • Companies in the Marcellus Shale Industry
      • 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)
      • 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)
    • Companies in the Marcellus Shale Industry
      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)
    • Companies in the Marcellus Shale Industry
      • NorthstarEnergy Corp. (WV)
      • Ohio Oil Gathering (OH)
      • OilsandsQuestm, 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)
      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)
    • Companies in the Marcellus Shale Industry
      • Southwestern Energy (TX)
      • Stephen Wilson Gas Co. (FL)
      • Stone Energy Corp. (LA, TX)
      • Sunrise Exploration, Inc. (IL)
      • Talisman Energy (CAN)
      • TanglewoodExplor. (TX)
      • Texas Keystone (PA)
      • Trans/Republic (TX)
      • Tri County Oil & Gas (WV)
      • TURM Oil & Gas (PA)
      • Tuscany Oil & Gas (OK)
      • TXOK Energy (OK)
      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)
    • Companies in the Marcellus Shale Industry
      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)
    • Companies in the Marcellus Shale Industry
      The previous list of companies are involved in the leasing, land acquisition, drilling, exploration, transmission, and distribution of natural gas
      However, they are followed by support companies that include:
      Halliburton
      Superior
      Sooner Pipe
      PBT and Hart Resources
      Holloman Corporation
      BJ Services
      Universal
      National Oil Well Varco
      These companies provide pipe, sand, and other materials and support needed as a part of the Marcellus Shale drilling operation
    • The Marcellus Shale Industry and Airports
      Drilling Opportunities
      • Commercial – Service Airports
      • Large amount of open space
      • Typically at least 500 acres of land
      • Noise is typically 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
    • The Marcellus Shale Industry and Airports
      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 for approvals
    • The Marcellus Shale Industry and Airports
      Drilling
      • PA Airports Where Drilling is Proposed or Occurring
      Pittsburgh International
      Bradford Regional
      Johnstown-Cambria County
      DuBois Regional
      Indiana County
      Connellsville
      Rostraver
    • The Marcellus Shale Industry and 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
    • The Marcellus Shale Industry and Airports
      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
    • The Marcellus Shale Industry and Airports
      Development Opportunities
      Many companies looking to locate in Northern PA
      Drilling Companies
      Pipe Suppliers
      Gas Companies
      Most are from Texas, Louisiana, Oklahoma, Washington, or Oregon
      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
    • The Marcellus Shale Industry and Airports
      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
      Parking facilities can become overtaxed
    • The Marcellus Shale Industry and Airports
      Development Opportunities – Issues to Address
      Show on Airport Layout Plan (Pen and Ink Change)
      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 for approvals
    • The Marcellus Shale Industry and Airports
      Development Opportunities – Recommendations
      If you are located within the Play, BE PREPARED!! You will be contacted by companies associated with Marcellus Shale
      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
      Hire an attorney who has experience in mineral rights and/or the Marcellus Shale industry
    • The Marcellus Shale Industry and Airports
      Case Study – Williamsport Regional Airport
      Williamsport is the Marcellus Shale Capital of Northern PA
      Good Highway Access
      US Route 15 connects Maryland to New York through Harrisburg
      US Route 220 provides access from Central PA
      Interstate 180 provides direct connection to Interstate 80
      Good Rail Access
      Lycoming Valley Railroad
      Good Air Access
      6,824’ Runway
      580 Acres of Land
      Plenty of available office/hangar space
    • The Marcellus Shale Industry and Airports
      Case Study – Williamsport Regional Airport
      • Scheduled Air Service
      Prior to 9/11, there were 4 flights to PHL and 3 flights to PIT
      Passenger enplanements were over 52,000 in 2000
      Enplanements dropped to a low of 20,000 in 2009
      Currently, there are 3 daily flights to Philadelphia
      In 2010, enplanements increased by 12%
      In January 2011, USAirways switched to 50-passenger DASH-8 aircraft
      Currently looking at service to Dallas, Houston and Chicago
      Increased service is supported by Halliburton
    • The Marcellus Shale Industry and Airports
      Case Study – Williamsport Regional Airport
      • General Aviation
      IPT saw fairly consistent GA usage (4 to 8 jets (<30,000 lb.) per week)
      Major usage during Little League World Series
      In 2009, GA traffic started to increase
      Currently, GA traffic averages 15 jets per week
      Major GA usage by:
      Halliburton (50-passenger RJ)
      Anadarko
    • The Marcellus Shale Industry and Airports
      Case Study – Williamsport Regional Airport
      • Sooner Pipe Facility at 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
    • The Marcellus Shale Industry and Airports
      Case Study – Williamsport Regional Airport
      • Sooner Pipe Facility at Williamsport Regional Airport
      Typical Pipe Yards
    • The Marcellus Shale Industry and Airports
      Case Study – Williamsport Regional Airport
      • Sooner Pipe Facility at Williamsport Regional Airport
      Total Leased Area = 24.3 Acres
      Lease Value = $__ per acre for 20 years
      Construction has included:
      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
      Eventually, facility will employ 75 people
      Management – Local staff trained in Houston
      All other employees will be hired locally
    • The Marcellus Shale Industry and Airports
      Case Study – Williamsport Regional Airport
      • Sooner Pipe Facility at Williamsport Regional Airport
      Proposed usage
      Pipe is delivered via rail
      Upon delivery, pipe isthreaded 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
    • Thank You – Questions?
      Rick Holes, PE
      VP – Operations Manager – L.R. Kimball Aviation Services
      Tom Hart
      Executive Director – Williamsport Regional Airport