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Tri-State pledges cooperation in natural gas production, promotion

Natural gas production in the region increased at a torrid pace for several years.  The U.S. Energy Information Administration reports that “The Tri-State Region (West Virginia, Ohio and Pennsylvania) represents 85 percent of the increase in natural gas production in the United States since 2012.”

However, drilling and production have leveled off in recent months because of the energy glut and depressed prices.  The price is hovering at around $2.50 per million BTUs (British thermal units) on the New York Mercantile Exchange, just above a three-year low.

The number of gas producing drilling rigs in the Marcellus Region has steadily declined from nearly 150 in 2012 to just 60 today, according to the U.S. Energy Information Administration. Utica Shale rig count has also dropped rapidly.

Industry officials expect demand to increase at some point; it’s just a question of when.  In the meantime, West Virginia, Ohio and Pennsylvania have promised cooperation for when the boom—or at least the growth—returns.

This week Governor Tomblin, Pennsylvania Governor Tom Wolf and Ohio Lieutenant Governor Mary Taylor signed an agreement pledging “to enhance regional cooperation and job growth through the continued development of shale gas in the Appalachian Basin.”

The states say they will work together on issues such as infrastructure, workforce development and the promotion of the Tri-State Region as a center for industrial development.

That makes good sense.  The Marcellus and Utica Shale gases don’t recognize state boundaries; they are a regional commodity.  Each state is anxious for its share of the prize, but it’s important to acknowledge that a cracker plant in West Virginia also benefits eastern Ohio and gas-driven industrial development in southwestern Pennsylvania will also spread over into West Virginia.

By working together, the Tri-State will also have a larger voice than each state individually in promoting the region; think Gulf Coast or Great Lakes Region.

States are notorious for fighting with each other for new businesses.  As a small state, West Virginia can rarely expect to win those bidding wars.  But this is different.

It’s estimated that the Marcellus Shale alone will yield up to 147 trillion cubic feet of natural gas over the next 25 years.  West Virginia, Ohio and Pennsylvania are sitting on top of a remarkable energy source and important feedstock for manufacturing.

At least some level of cooperation among each of the three states will produce greater benefits for all.





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