Pittsburgh airport gas drilling project set for official kickoff

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Ground was broken months ago at Pittsburgh International Airport for Consol Energy’s natural gas development project, and drilling began Aug. 15.

This morning, Gov. Tom Corbett, Allegheny County Executive Rich Fitzgerald and Consol president and CEO Nick DeIuliis will gather near the drilling site for the “project kickoff,” said Tommy Johnson, vice president of government and public relations for Consol.

“It’s an important milestone,” he said.

For Allegheny County, and especially for Pittsburgh International Airport, it’s an important project.

Consol has built two well pads and plans to construct four more to drill a total of 47 Marcellus Shale wells in a footprint located on more than 9,000 acres of county-owned land near the airport.

The Canonsburg-based company expects the airport project will bring more than $1 billion to the region, including a $50 million bonus payment paid to the Allegheny County Airport Authority last year, 18 percent royalties to the authority over the next two decades and $500 million in capital spending by Consol.

“This is a good way to utilize public lands, public assets, to benefit the public. This public-private partnership, if you will, this arrangement, is going to be very beneficial,” said Mr. Fitzgerald, who said the benefits will be especially significant for the airport.

The airport, which once served 20 million passengers a year, has struggled in the decade since US Airways removed Pittsburgh as a hub, Mr. Fitzgerald said.

Now, with just 8 million passengers a year, per-passenger landing fees have increased. Mr. Fitzgerald said gaming revenue from the state has helped somewhat, but he said the airport is strained by the annual $62 million it must pay to service the debt from building the airport.

Revenues from shale development — Mr. Fitzgerald puts his estimate of the county’s take at $20 million to $25 million a year for the life of the lease — will go to pay down the airport’s debt. That will reduce per-flight costs to make the airport more competitive and attract flights back to Pittsburgh.

“We’re sitting on a very valuable asset,” he said.

That asset has already started delivering. Mr. Fitzgerald said the airport authority has twice reduced fees at the airport thanks to the initial Consol payment.

This morning, Consol will mark what Mr. Johnson said has been a “successful journey to this point.” Allegheny County Council approved the plan in February 2013, and approvals from Findlay, where most of the project will be located, and the Federal Aviation Administration came through this spring. Construction and site preparation began soon after.

Construction of well sites and three water impoundments will continue through 2015, Mr. Johnson said. Production also is expected to come on line next year.

Vertical drilling will continue through 2017, with horizontal drilling beginning in the fourth quarter and running through late 2018, or early 2019, Mr. Johnson said. The project will eventually include 10 miles of gas pipeline and 11 miles of waterline.

The plan has been proceeding smoothly, he said.

“I think we’re going to point to this one as a good model for other areas of our operation,” Mr. Johnson said.

In March, Allegheny County Health Department began monitoring air quality in Findlay’s Imperial Pointe neighborhood, close to the drilling site, to establish a baseline for comparisons after drilling starts. That baseline has been established, and the numbers are posted on the county website.

The air sampled “is similar to almost any suburban site,” said Jayme Graham, air quality program manager for the department.

Noise levels also are being monitored, and emergency responders have received training about responding to gas emergencies.

Some Findlay residents who attended meetings in the spring expressed concern about the proximity of the drilling site to their homes, but township manager Gary Klingman said, “So far, we’ve had minimal complaints.”

The airport is not the only natural gas development project the county has its eye on.

In May, Allegheny County Council approved a deal that would allow Range Resource to conduct off-site extraction of natural gas from beneath the county’s Deer Lakes Park.

That deal will yield a $4.7 million signing bonus for the county plus $3 million for a parks fund and 18 percent in royalties over the life of the project.

Mr. Fitzgerald and Range expect the project to begin in 2015. The lease has not yet been signed, and Mr. Fitzgerald said what remains is “clearing up language.”

A spokesman for Range said the company is “still awaiting final sign off” and that they do not anticipate any significant delays.

With the kickoff of the airport project, Mr. Fitzgerald said Allegheny County is “posed to be an energy capital.”

“I think we are going to become, and I want us to become, the energy capital of America,” he said.

United States - North America - Pennsylvania - Pittsburgh - Tom Corbett

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