Gas drilling industry reaching out to communities via county fairs
Global giants look to improve local ties
August 14, 2011 8:00 AM
Rod Winters, left, of Energy Corporation of America, with his daughter, Parker, pose at the Greene County Fair after Mr. Winters bought the reserve Grand Champion lamb, seen with owner Hayden Demniak, 10, of Cumberland Township. Other energy companies also made purchases at the fair's 4-H Market Sale.
Roger VanDruff helps out by watching for bids during the 4-H Market at the Greene County Fair, which ended Saturday. The fair has many energy-related sponsors, including EQT Corp., Chevron, Consol Energy and Energy Corporation of America.
Signs thanking buyers of their livestock are hanging at the Greene County Fair in Waynesburg, Pa. The fair has many energy-related sponsors including EQT Corporation Chevron, Consol Energy and ECA Energy. The 4-H Market sale includes purchases by energy companies.
By Erich Schwartzel Pittsburgh Post-Gazette
WAYNESBURG -- Consol Energy made $346.8 million last year and spent $4,953 of it Thursday night on a 1,524-pound, black-and-white steer named Oreo.
Oreo belonged to an elementary school student named Gregory Staggers until Laural Ziemba, the Consol Energy director of community relations, started waving her auction number at the Greene County Fair 4-H Market Sale.
Some locals joined the bidding once Consol expressed interest, hoping to force the energy giant with deep pockets up another quarter per pound. "Three-and-a-three-and-a-three-and-a- ... Three-and-a-quarter. Three-and-a-quarter. Three-and-a-quarter. SOLD!"
A few folks clapped as the Canonsburg company picked up another of the four animals it would buy that evening. The auctioneer announced Oreo's fate: The steer would be butchered and the meat sent to St. Ann's Food Bank in Waynesburg on behalf of Consol Energy.
PG VIDEO: ENERGY COMPANIES AT FAIR
The natural gas industry is growing almost as fast as Oreo once did -- the steer went from 694 pounds to 1,524 in less than eight months -- and it turns out that one of the social events of the year, the county fair, isn't a bad way to introduce itself to its skeptical neighbors. Drilling in the natural gas rich Marcellus Shale has turned the annual summer gatherings into attractions with Nascar-style endorsements meant to help shore up support for a controversial industry planning on a decades-long investment in the region.
Local businesses have always vied for the ribbon that comes with a prized purchase, and the county fair season has introduced some heavy hitters to the mix.
It's an outreach program that can add some colorful assets to a company's portfolio.
Six of the seven champion lambs in Greene County were purchased by energy firms (the grand champion went to grocer Giant Eagle). At the Fayette County Fair earlier this month, guests took in events at the Chevron Outdoor Arena. Next week at the Washington County Agricultural Fair, fairgoers can participate in EQT Day with a Spam contest in the morning and barbershop chorus concert in the evening.
Oil and gas sponsorships account for about one-third of the Greene County Fair's total budget this year, said Debbie Stephenson, the fair's secretary/treasurer. That extra money has come in handy as state funding drops. In 2005, state funding for fairs was $4.6 million. Last year, it was $1.2 million.
The first Marcellus wells were drilled in 2004, and about two years later, energy firms started county fair outreach, said Eric Cowden, community outreach manager for the Marcellus Shale Coalition lobbying group.
"As traditional [as] summer fairs are for Pennsylvania, it has become that kind of tradition for these energy companies," he said. "It's part of their makeup now."
Several years ago, the sponsorships came in the form of money with no designated purpose, but Mr. Cowden said firms are now more willing to build arenas and infrastructure that lasts several seasons.
The new sponsors -- who run a bit bigger ship than the average mom-and-pop sponsors -- inspired fair organizers to create new sponsorship tiers. That's why EQT is a Corporate Platinum Sponsor, Chevron is a Corporate Silver Sponsor and Energy Corporation of America is a Bronze Sponsor.
"You can be the sponsor of the rabbit show or the monster truck show," said Ms. Stephenson. But the organizers thought the energy companies deserved names as grandiose as their donations.
Few of the fair organizers would disclose how much each company donated. But in Washington County, a "Platinum" sponsorship like the one EQT chose requires a minimum $6,000 donation.
EQT Corp., based Downtown, is sponsoring 24 county fairs this year, beginning with the Hillbilly Days of Pine County, Ky., in April and ending six months later with the Salem Apple Butter Festival in Harrison County, W.Va.
Many energy firms suddenly interested in the Marcellus Shale region are based elsewhere. The county fair is a place to shake hands and introduce yourself as the billion-dollar neighbor next door.
Chevron of San Ramon, Calif., has been on the local fair circuit since acquiring Atlas Energy of Moon for $4.3 billion in February. Chevron's Greene County booth was manned by three Atlas-turned-Chevron employees who volunteered for the night. One was a landman, another worked in regulatory affairs and the third was on the IT support staff.
Fairs help with the "culture change" of an out-of-state company moving into small towns, said Nick Staffieri of Chevron's regulatory department. Setting up near a temporary airbrush tattoo salesman, he and his colleagues offered free hand sanitizer, tote bags and fact sheets -- all bearing the company logo.
The booth was staying open late on Thursday and has been well-received so far, they said, except for a 12-year-old at the Fayette County fair who called Chevron's work "a disaster" and ran off before Mr. Staffieri could try to convince him otherwise.
Outreach at such community-oriented gatherings is a way to combat some of the industry's negative press, said Rod Winters, director of land at the Energy Corporation of America and the purchaser Thursday night of an 8-month-old lamb named Magnum.
Mr. Winters, who works at ECA's Eastern operations office in Charleston, W.Va., was tapped for the job because of his history with the youth development program 4-H.
He came without a budget from his bosses.
"I'll surprise them when I get back," he said. Magnum was bid up to $13 per pound for a total payday of $1,690.
Magnum's owner, 10-year-old Hayden Demniak, easily came up with a list of the ways that energy firms have helped his elementary school in Cumberland Township: an improved walking track, a new nature trail, science demonstrations and the sponsorship of a healthy eating program.
His father, Dave Demniak, offered a more nuanced view. Magnum, the fair's reserve grand champion, was raised on the family's four acres -- right down the hill from a gas compressor station whose constant noise "is like living along the freeway."
"I'm not knocking them," said Mr. Demniak. "They do a lot of good things for the community."
Besides, he and Hayden were already focused on the sheep that they plan to buy with the ECA money, and what new ribbons might follow.
The politics and controversy that travel with the gas industry seem to stop at the auction: Jennifer Self, 17, of Greensboro, sold a steer named Rambo at auction to ECA, as well, but conceded she didn't know what exactly the company did.
Often, energy companies will buy an animal and then donate it back to be sold again. The second pot of money goes toward a 4-H scholarship fund.
Range Resources, a Fort Worth, Texas, driller with a huge presence in southwestern Pennsylvania, donates at least $100 to every kid who shows an animal at the Washington County Fair. The company sees it as a direct investment in a future workforce.
"Those are the family farms where we work and more likely than not those are the young people who will one day lead our industry," said spokesman Matt Pitzarella in an email.
But in this season, the sale of most concern is not one of reputation.
When she was sitting in the bleachers shopping for steers, Consol's Laural Ziemba held a folder overflowing with letters and solicitations from young buyers.
There were invitations to the auction, pictures of steers and lambs, as well as outright requests for the company to purchase an animal. Some didn't want Consol to actually buy their bovine -- but could Ms. Ziemba just bid a couple times to boost the final price?
Selecting what to buy came down to the extra touches on the pitch.
She gave the letters extra points if the missive said, "Dear Ms. Ziemba" and not "Dear Sirs." Those who chose a business letter format -- albeit one in curly-queue font -- also had a better shot at a piece of the most expensive pie at this year's fair: the $346.8 million one.