CEA Localizing Economic Benefits of US Shale Development
The self-styled "voice of the energy consumer," the Houston-based Consumer Energy Alliance (CEA) is a nationwide association comprising a diverse membership. Indeed, the fact that CEA's members hail from such a broad spectrum of interests – academia, organized labor, chambers of commerce, energy production, retiree groups, agriculture, small business, airlines, construction, environmental conservation, the hospitality industry, online media, logistics, manufacturing and other areas – underscores how energy is an issue that can bridge divides.
A seemingly unlikely coalition of approximately 240 corporate members and more than 400,000 individuals have joined under the CEA banner to support national and even international energy issues such as increased shale development and U.S. government approval of the Keystone XL oil pipeline. CEA will continue to advance these and other issues at the macro-scale, but the organization is redoubling its efforts to localize its message for Americans from the state level down to local communities from the Southwest to the Northeast.
"The economic implications from the shale revolution are profound," said David Holt, CEA's president. "The energy sector and the shale revolution have really been sustaining this economy for a number of years. You're seeing a lot of onshoring of jobs. The fertilizer industry has come back. The steel industry has come roaring back. All of that means jobs."
Countering grassroots opposition to greater energy development, CEA is providing a more balanced perspective about how environmentally responsible oil and gas development can benefit household budgets, employment opportunities, government coffers, business growth plans and the overall long-term economic health of America's cities and towns, said Holt.
CEA is working to inject balance in the debate through its "Onshore Response Initiative," said Shawn Martini, the organization's communication director.
"Specifically our efforts include a targeted media engagement or outreach effort in several states, including Pennsylvania, Ohio and Florida," he said.
Participating in editorial board meetings, placing op-ed articles, guest blogging and using email, social media and display advertising channels and other types of outreach helps to improve reporters' and readers' understanding of the energy industry's perspective, he explained.
"We are also working to demonstrate the benefits of energy production through our video series, which is ongoing," added Martini.
CEA has produced videos for Ohio (see link in Ryan Scott's comment below) and Colorado, and videos for Louisiana, Pennsylvania and Texas are in production, he said.
Four representatives of CEA's state and regional affiliates recently enlightened Rigzone about the economic impact of the shale revolution in their respective geographical areas. Their insights follow.
Rigzone: What economic "story" is unfolding in local communities, thanks to shale development?
Ryan Scott, Executive Director, CEA-Ohio
At a state-wide level, Ohio has seen $6 billion in new oil-and-gas related activity since last fall, according to law firm Bricker & Eckler LLP. That $6 billion brings the tally to $18.8 billion in investments related to the Utica Shale Play. Aside from direct production of oil and gas and investments in infrastructure such as pipelines and roads, companies are also expanding product lines and building new hotels and restaurants.
And at a local level, communities like Carroll County Ohio, are also feeling the benefits of shale development.
(Another) item fits under both misconceptions and economic stories: there is a widely held belief that oil and gas production will last for just a few years, after which the industry will pack up and leave the state.
Wells in other, more established shale plays tend to produce significant amounts of oil and gas for about 20 years. That is the period of time necessary to fully produce on a typical well, even though the highest levels of production are seen at the beginning of a well's life. This means that companies are incentivized to become a party of the community and invest in that community. They are in it for the long haul and will continue to benefit the economy and enhance government revenues as long as production continues.
Mike Butler, Executive Director, CEA-Pennsylvania
The economic story occurring across various areas in the Marcellus shale region is how shale development has helped American families across the nation, bringing indirect job and economic growth, lower energy costs and higher incomes. Here in Pennsylvania, we've seen shale energy development helping to dramatically alter the economic landscape in a number of communities.
For example, Washington County – an area that has one of the most active natural gas drilling sites in the Marcellus shale – ranked as third in the nation in percentage of employment growth in 2011 and grew another 4.3 percent in 2012. And its unemployment rate has consistently remained lower than the national average. With 73 new projects accounting for more than $346 million in capital investment in 2012, it's clear that economic development has boomed in Washington County.
Besides the jobs that have been created through energy production, the county has also seen economic benefit from the economic opportunity across the hospitality, real estate, manufacturing and service industries. Driven by Marcellus Shale production, everything from machine shops to consumer products manufacturers like Canonsburg-based All-Clad Metalcrafters and Charleroi's World Kitchen plant have added to their production schedules.
Washington County has also benefited through increased revenue and royalties. In fact, Washington County since 2009 has collected nearly $11 million from drilling deals on public properties, including Cross Creek Park and the county fairgrounds.
Here are a few testimonials from people within the Washington Community that help to further illustrate the impact that we have seen in Washington County – that has also been seen across other areas in the region:
- An increase in population and demand has brought a business boom for some unexpected trades like dentistry, transportation services, barbershops, and convention centers. Don Hodor, Executive President of the Southpointe and Marcellus Shale Chambers of Commerce, discusses the impact of the natural gas boom on the surrounding area in this podcast
- Washington County resident Dawn Hamilton found inspiration and entirely new careers within the flourishing energy industry
- Frank Puskarich, owner of Hogfathers BBQ, began delivering meals directly to the rig sites and says business is booming
Colorado & New Mexico
Shawn Martini, Director of Communications, CEA
We continually see the energy industry help revitalize small rural communities, increase local tax bases and drive local job creation. The proliferation of shale development in areas that have not traditionally experienced an intense level of development has also helped these communities to diversify their local economy. In Colorado, New Mexico and even in south Texas, rural towns that once existed exclusively on the agriculture industry are attracting new support industries and broadening their economic portfolio.
Marty Allday, Executive Director, CEA-Texas
The agriculture industry itself benefits from energy production directly through royalty payments that are then reinvested into family farms and ranches, but also though the boost to their local economy. As an energy-intensive industry, agriculture also benefits from increasing domestic production of oil, natural gas and refined fuels. Domestic production puts downward pressure on diesel prices which represents one of a farmer's largest variable costs. Domestic natural gas production is also helping reduce prices for commercial fertilizer by bringing fertilizer manufacturing back to the United States.
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