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Marcellus Shale Case Study – Williamsport Regional Airport
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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