tejas gosai

How the Marcellus Shale is Boosting a County in Pennsylvania

By On January 8, 2015 9:34 pm


From National Journal

Lue Ann Pawlick remembers an early sign: seeing the local restaurants start to fill up with workers in cowboy boots. For Tejas Gosai, the harbinger was the proposed lease his father received, asking him to allow an oil and natural gas company to tap his mineral rights.

Those were the days when Washington County was still a sleepy, rural, economically struggling part of western Pennsylvania with the Monongahela River running through.

“We were trying to recover from the steel mills that closed down, the coal mining that’s gone, the power plants that closed down,” said Pawlick, executive director of the Monongahela Industrial Development Association, which was then in the early stages of building an industrial park called Alta Vista in hopes of attracting new business.

Fast forward about eight years, and Washington County’s economy is thriving, thanks to the ascendance of advanced hydraulic fracturing and horizontal drilling in the Marcellus Shale. Modern fracking has allowed the extraction of previously inaccessible natural gas deposits locked in tight-shale formations, providing an affordable domestic supply of natural gas.

Scores of local workers are employed directly by natural gas companies, and even more new local jobs have been created indirectly to serve the workers and supply hydraulic fracturing operations, even as workers in cowboy boots – from states like Texas and Oklahoma with much history in oil and natural gas – continue to help fill hotels and restaurants. The unemployment rate for Washington County was 4.6 percent in September 2014, significantly lower than the national rate of 5.9 percent.

A whole chain of businesses – restaurants, hotels, gas stations, grocery stores, banks, health care providers, entertainment outlets, trucking companies, cleaning services and myriad other goods and service providers — now see a much bigger market and an influx of cash circulating in the local economy.

The Alta Vista industrial park is now full of shale-related businesses. In 2013 alone, Washington County attracted 105 new economic development projects representing $1.1 billion in investment capital and promising to create more than 2,000 jobs. Meanwhile visitor spending in Washington County more than doubled from $333 million in 2006 to $740 million in 2012, thanks in part to the influx of contract workers from out of state.

washingtoncountyThe U.S. Chamber of Commerce estimates that the Marcellus Shale is adding a total of 211,000 new jobs and $18 billion to Pennsylvania’s economy. The oil and natural gas industry provides 339,000 direct, indirect and induced jobs in the state, accounting for 5.8 percent of the its GDP, according to a recent analysis by the American Petroleum Institute. Unconventional oil and natural gas jobs like those provided by the Marcellus Shale are the fastest growing part of the sector.

Pawlick recognized early on that the shale boom would create a great need for all kinds of local services. She found a niche supplying water for the hydraulic fracturing operations. In March, she opened Frac Water Resources on the site of a defunct steel mill along the Monongahela River in Allensport. A steady stream of trucks pull up to her water tanks to fill up.

“We have such a shortage of truck drivers now – there’s no reason for anyone who has their CDL [Commercial Driver’s License] to be unemployed,” she said. “And there’s no reason for an able-bodied person to not get their CDL if they want to be employed.”

Gosai considers his father, Kam Gosai, the quintessential American Dream story – an immigrant who worked and studied hard to become a doctor and local businessman. The Gosais opened their first hotel in 2000 as a way to provide jobs and services and to give back to the community.

About six years later, workers started streaming in because of the Marcellus Shale play. The Gosais saw both a lucrative business opportunity and a way to further serve the community. They crafted their hotels to specifically serve the workers, installing places for them to wash their boots and gear outside the rooms, outdoor recreation areas with picnic tables and heaters, along with amped-up internet connections, since the workers have so many portable devices and a passion for playing Xbox.

Now, there are four hotels in the Gosais’ Shale Hotel chain, and another one is under construction, with an elaborate “mud room” for workers to change into clean clothes before heading to their rooms.

“Such a ridiculous amount of hotels have been built in this corridor, and we haven’t reached the capacity yet – it’s mammoth,” said Tejas Gosai.

The hotels have a 91 percent occupancy rate and employ about 200 people. Meanwhile Tejas Gosai, who has a law degree, founded a media outlet that runs TheMarcellusshale.com and websites for other shale gas plays around the country, attracting 10 million page views a month. The sites give updates on the industry, tips on how to negotiate a lease and other relevant news. The media company employs about 20 people.

Next up, the Gosais are opening a compressed natural gas fueling station to provide clean energy for vehicles.