Energy executives gather in Philadelphia for a Marcellus Shale conference


Supporters of the Marcellus Shale industry on Thursday hailed Pennsylvania's natural-gas boom for launching a veritable economic revolution but cautioned that much work still needs to be done to convince skeptics that drilling can be conducted safely.

At the Shale Gas Insight conference at the Pennsylvania Convention Center, Marcellus Shale drilling was credited with generating $11 billion in value-added economic impact in 2010, supporting 140,000 jobs, and contributing $1 billion in state and local tax revenue.

"Wherever we look, we see energy development creating multiplier effects that ripple through the U.S. economy," Jack Williams, the president of XTO Energy, the shale-gas subsidiary of Exxon Mobil Corp., said in a keynote address.

Williams called shale gas "an American success story." But as he addressed the audience of 1,600 people at the event sponsored by the Marcellus Shale Coalition, several hundred anti-drilling activists rallied outside with a contrasting point of view.

Hoisting banners denouncing hydraulic fracturing - fracking - the protesters said the industry would only bring environmental and economic ruin to Pennsylvania.

Some of the protesters took issue with Gov. Corbett, who opened the conference on Thursday by calling opponents "unreasoning."

"I think it's disingenuous for the governor to dismiss his opponents as a fringe element of naysayers," said David Masur, executive director of PennEnvironment, the advocacy group that took the opportunity Thursday to release a report denouncing the costs of "dirty drilling."

The Convention Center's thick glass windows muffled the sound of the peaceful protesters, but a few speakers indoors noted their presence.

Corbett, an unabashed industry supporter who had been heckled by anti-drilling activists the night before in Philadelphia, credited shale gas with launching "the beginning of a new industrial revolution." He cited the salvation of two Philadelphia-area oil refineries as examples.

"It is beyond belief that there are still people who would trade this progress for a return to the status quo," he said.

He also said the state had done a credible job regulating the industry: "Our opponents agree that we can land a rover on Mars, but they can't bring themselves to think we can safely drill a mile into our own soil."

Speaker after speaker lauded the shale-gas boom for reshaping the nation's energy landscape, triggering economic growth, reducing the cost of energy, and improving the nation's energy independence.

Frank Semple, chief executive of MarkWest Partners L.P., a gas processor and pipeline company working with Sunoco Logistics Partners L.P. to move gas byproducts by pipeline across the state to Philadelphia, called shale gas "a transformational opportunity."

MarkWest is already exporting Marcellus propane out of Sunoco's docks in Marcus Hook.

Williams, the president of XTO, was polite about the protesters. He said there was "a lot of misinformation out there" about shale gas and called on the industry to step up efforts to tell its story.

"We need to acknowledge that for all the success of shale development, public confidence is not as strong as it could be," he said.

In an interview, Williams acknowledged that the industry was unprepared for the opposition that developed to hydraulic fracturing, an extraction process that drillers have used for decades. Fracking involves the high-pressure injection of water, chemicals and sand when a well is completed to release entrapped gas.

"This is old-hat stuff to us that we've been doing for a long time and never saw any public opposition to it," he said.

Williams said XTO was one of 200 companies that now disclose the components of hydraulic fracturing fluids on the website, which lists the ingredients used in each well. He also endorsed efforts by organizations such as the Marcellus Shale Coalition to promote "best practices."

Williams said there was "no way" that fracturing fluids injected into mile-deep shale formations could migrate into freshwater aquifers, which are situated near the surface. As an example, he cited Fort Worth, Texas, where XTO's headquarters are located, and where Williams lives.

About 20,000 shale wells have been drilled around Fort Worth, including some within a few hundred feet of public reservoirs, and Williams said they have had no impact on public water supplies.

Rather than something to fear, Williams maintains that hydraulic fracturing is something to celebrate - a tribute to American ingenuity.

In the last five years, production has quadrupled in the top five shale-gas regions to 20 billion cubic feet a day - fuel extracted from a rock formation that had previously been considered unproductive.

The industry is producing so much natural gas that markets are oversupplied, causing gas prices to drop.

"Even if the U.S. economy had been doing wonderfully, that's a lot of gas to soak up in a very short time, for demand to catch up," Williams said.

That has benefitted consumers, but Williams' boss, Exxon chief executive Rex Tillerson, in June lamented that gas producers are "losing our shirts today."

Williams maintains that the glut will be short-lived and that prices will be stabilized.

XTO has about 757,000 acres under lease in the Marcellus Shale, including 460,000 in Pennsylvania. He said the shale-gas phenomenon is a long-term investment.

"If we never added another acre, we have 30-plus years of very active development and high production in the Marcellus," he said.

The conference will end Friday.


Contact Andrew Maykuth at 215-854-2947, @Maykuth on Twitter or