The Future is Now – June 28th Business2Business Forum

Future is now  June 29, 2011

Local businessmen already feeling impact of shale boom

By JEREMY JOHNSON

JeremyJohnson.TheDerrick@gmail.com

Staff Writer

Brad Deeter of Deeter Farms Construction of Cooperstown talks about the large scale expansion of his trucking company that hauls water and sand to and from Marcellus drilling locations. Deeter was one of several panelists who talked about their part of the Marcellus shale drilling industry in Pennsylvania. Seated with Deeter are (from left) Dick Fontanesi of QET, Mark Windle of Range Resources and Matthew Darr (right), manager of the Holiday Inn in Clarion. By Jerry Sowden The first wave of speakers at Tuesday’s Business 2 Business Forum at the Venango Technology Center spent most of the morning touting the potential of the state’s Marcellus shale industry and offering advice to business owners on how they can become a part of the booming sector.

“I don’t think anybody in this room needs to be sold on this Marcellus shale gas play, this major opportunity,” said Sam Liberto, principal of Strategic Innovations, a consulting company. “It’s a game-changer.”

But it turns out those industry experts were only setting up the proverbial pins so that a pair of local businessmen on Tuesday afternoon’s panel of guest speakers could knock them down.

For the most part, the morning speakers (Carl Knoblock, of the U.S. Small Business Administration in Pittsburgh; Bud Shuffstall, senior oil, gas and mineral officer of Northwest Savings Bank; Al Catanzarite, vice president of the Pennsylvania Independent Oil and Gas Association; and Liberto) reiterated what has been said ad naseum by proponents of the industry for the better part of two years: There’s a giant shale formation underneath the state and it could generate millions of dollars and thousands of jobs for

Pennsylvania over the next 20 years or more.

Some offered advice on how to access business through online sales. Others spoke of marketing, presentation, specifications and industry needs regarding the complex world of natural gas drilling.

However, it was a pair of local business men sitting in on the afternoon discussion panel who really put the potential of the gas industry into perspective by providing some of the region’s first tangible evidence of just what impact the industry might make on area businesses.

“Everybody says Marcellus shale is still in its infancy, but I don’t understand how that can be true,” said Brad Deeter, operations superintendent of Deeter Farms Construction Inc. out of Cooperstown.

In February, Deeter and his family’s excavation-gone-water hauling company was the subject of a feature in The Derrick and The News-Herald. At the time, Deeter had said the more than 25-yearold company had gone from just four or five family members and a few trucks originally to a booming business with more than 30 employees with a fleet of 13 water trucks.

On Tuesday, Deeter told the more than 100 people at Tuesday’s forum — hosted by Northwest Pennsylvania Oil and Gas Hub — that his company now has 17 trucks and more than 50 employees, and continues even now to grow and expand.

“I went to college thinking there was no way I was going to stay in the family business,” Deeter said. “I loved it, but I didn’t think the opportunity was there for me to make something of it. (Marcellus shale) has definitely changed my feelings about that.”

For Matthew Darr, the general manager of the Clarion Holiday Inn, Marcellus shale has changed the entire landscape of the area’s lodging industry.

“You’ve heard a lot today about the numbers (of Marcellus shale) over the next 20 years and how it’s going to affect northwestern Pennsylvania, but I’m really here to talk about how it’s affected my hotel over the past couple of years,” Darr said.

According to Darr, when the economy began to struggle in 2008, so too did the Clarion Holiday Inn — so much so that they were forced to lay off some employees.

But when the Marcellus industry began to creep into Clarion County in 2009, Darr said his business saw a marked turnaround. At the end of 2010, Darr said the Clarion Holiday Inn recorded the highest revenue totals since the hotel was built in 1972 and was able to add an additional five employees on top of rehiring those employees who were previously let go.

“It’s hard to believe Clarion County can support five or six hotels, but we’ll probably need nine or 10 down the road,” he said.

Darr said he takes a very proactive approach to finding new guests working in the area’s Marcellus industry, including reading several newspapers a day to find out what companies are working in the area, and scouting the Clarion and Jefferson county courthouses.

“(The courthouses) are packed right now with leasing agents,” he said. “That’s another great way to find out who’s in the area.”

Putting the cart ahead of the horse?

Tuesday’s forum at the technology center was another in a long line of industry-specific events held in the tricounty area over the past year or more.

But with so much hoopla and so little actual drilling activity, is it possible that area economic developers are putting the cart ahead of the horse?

“No, because any time we’ve talked with, say, the Range Resources or the EQTs this is what they recommend,” said Deb Lutz of the Oil Region Alliance. “They would rather see these kinds of forums before the boom hits.

“I think our philosophy has always been that we want our businesses to be prepared … because we’ve heard stories about counties that just weren’t prepared for what’s to come. We’re just trying to continue the education and the information to prepare our businesses to do business,” she added.

The usual suspects

A major theme of Tuesday’s forum was networking. And there was no place better than the technology center for would-be Marcellus business entrepreneurs to start reaching out.

The guestlist for the Business 2 Business forum reads like a virtual who’s who of regional business, economic and industry development. A few major players in attendance for Tuesday’s event included Lutz; Lance Hummer, of the Keystone Community Education Council; Brad Ehrhardt, of the Clarion County Economic Development Corporation; Joe Barone, of the Pennsylvania Gas Directory; Mark Windle, spokesman for Range Resources; Dick Fontanesi, sourcing manager of EQT Corporation; Peter Winkler, aide to Congressman Glenn Thompson; and others.