Shale oil, gas finds put Mon Valley on path to renaissance, leaders say

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CHARLEROI, Pennsylvania — Lue Ann Pawlick never envisioned companies connected with oil and gas beating a path to Alta Vista Business Park when it broke ground in tiny Fallowfield, Washington County, in 2001.

Today, three of the five companies in Alta Vista work in the industry. An energy company is set to start construction in the spring, and at least one more is close to signing a deal to locate there.

"We're trying to keep it a mixed-use business park, but we have to recognize the oil and gas industry is the biggest game in town right now," said Pawlick, executive director of the Middle Monongahela Industrial Development Association. "They are the ones driving demand."

Ten years ago, Fort Worth-based Range Resources Corp. drilled the first Marcellus shale well in Washington County. Now the county — which dubs itself "Energy Capital of the East" — is home to about 1,000 wells, the most in Pennsylvania.

In that time, county property tax revenue increased more than 50 percent, to about $40 million annually. In the past three years, about 220 development projects added nearly $1.7 billion in capital investment for an energy-fueled economy that once relied on farming, coal and steel.

"No one knew Marcellus shale would come, but we were ready for something big to happen," said Jeff Kotula, president of the Washington County Chamber of Commerce. "It is instilled in us by county leaders that they want projects that continue to bring growth."

Such projects are more evident in the northern part of the county, near Pittsburgh, where there is rampant development of neighborhoods, shopping centers and office spaces in places such as Peters, Cecil and Canonsburg.

Southpointe, a sprawling office park in Cecil that opened in 1993, is the prime example of that growth, with more than 300 companies and an estimated 11,000 employees.

Local-share money

Since enacting a shale impact fee three years ago, Pennsylvania has collected about $630 million. Of that, $15.2 million went to Washington County — more than any other Western Pennsylvania county.

Another $1.9 million went directly to 15 communities in Washington County's part of the Mon Valley, which spans four counties from outside Pittsburgh south to the West Virginia border.

The money can go toward expenses related to natural gas development, such as maintenance for roads, bridges and other infrastructure; the building of water, sewer and storm water systems; protecting and reclaiming water supplies; and much more.

The Meadows Racetrack & Casino has provided the county with an economic boost since the casino opened in 2007.

Surrounded by development along Racetrack Road in North Strabane, the casino provides local-share tax money annually to help fund development projects throughout the county.

The $60 million the casino has provided helped to leverage other financial sources for about $200 million in projects, county officials report.

The latest figures show that Washington County has the region's third-lowest unemployment rate at 5.6 percent, trailing only Allegheny and Butler counties, and better than the national unemployment rate of 6.3 percent.

Mon Valley turnaround?

An abundance of natural gas, coupled with lower prices, could spark a return of factories and jobs, business leaders say.

Barron "Pat" McCune, president and CEO of Community Bank and chairman of the Southpointe CEO Association, said the Mon Valley's best days are ahead. U.S. Steel dealt it a major blow in 1967 by closing its Donora plant that employed 7,500.

"We could see a renaissance of manufacturing. And that will be in historic manufacturing places like the Mon Valley," McCune said. "It will take some time, but it is coming."

Some of it has arrived, said Debra Keefer, president of the Mon Valley Regional Chamber of Commerce.

"There is opportunity," Keefer said. "Whoever wants to work can work in this valley, in this region. I maybe couldn't have said that 10 years ago."

Officials continue to push for development of a 400-acre industrial park in Allenport, on the former Wheeling-Pittsburgh Steel site. They estimate the Mon Valley Industrial Park could lead to 2,700 jobs.

The Middle Monongahela Industrial Development Association is looking to add another business or industrial park to three it operates in Bentleyville, Donora and Speers, Pawlick said.

Skepticism remains

Bill Johnson, plant manager at Stone & Co., a ready-mix concrete and building supply company in Charleroi, isn't convinced a manufacturing boom is on the horizon.

"I don't see it coming here. I just don't see it," said Johnson, 57.

Outside Johnson's office, an old crane chomped into piles of sand and river gravel, then dumped load after load atop a small building that spits out concrete blocks for retaining walls and other construction projects.

Stone & Co. sits between the river and railroad tracks, highlighting two reasons the Mon Valley once was an industrial hub: easy access to cost-efficient transportation on barges and trains.

Farther upstream, George Kelemen stared out over the same river and railroad tracks. Beneath his hilltop Donora home is a string of plants in an industrial park that stands on the former footprint of American Steel & Wire. More than 40 companies are on the riverfront site.

Kelemen, 32, stocks shelves in a grocery store in Mon City, as he calls Monongahela. Last year, he planned to apply for a job at PolyOne in the Donora Industrial Park. Its parent company announced in July 2013 that it would close the plant.

"A lot of people lost their jobs. It was really sad," Kelemen said. "At one point, mills lined this river. Now there's not too many jobs around here that pay well enough to support a family on."

Anchor employers

But good jobs remain, the Chamber of Commerce's Kotula said.

Some are provided by World Kitchen — a longtime Charleroi company that produces Pyrex, the cooking brand it acquired in 1998 and which marks its 100th anniversary next year. The plant employs about 350 people.

Others are across the river in Monessen, Westmoreland County. ArcelorMittal spent $50 million to overhaul a coke plant idle since 2008. It reopened this year. Company officials hoped to hire 200 workers.

What happened in Monessen can happen in Washington County, Kotula said.

"As natural gas and energy in general become more and more prominent and continue to grow and expand, more companies will 're-shore,' or come back from overseas," he said. "The Mon Valley is a prime location for that, although I think we have to look at the small successes.

"The large steel mills employing 2,000 people likely aren't going to come. Still, I see a turnaround. Is it going to be tomorrow? No. But I think it's coming."


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Information from: Pittsburgh Tribune-Review, http://pghtrib.com

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