Rice Energy leader gets warm reception

March 7, 2014
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Rick Shrum / Observer-Reporter
About 700 people shoehorned into the Bentworth High School gym for a Rice Energy-sponsored town meeting Thursday. Order a Print
Image description
Rick Shrum / Observer-Reporter
Toby Z. Rice, chief operating officer of Rice Energy, speaks with audience members following a town meeting Thursday at Bentworth High School. Order a Print

A long line of vehicles lurching up the driveway was an early indication – this would be a massive crowd fueled by and brimming with energy.

About 700 people, many of them local landowners, streamed into the Bentworth High School gymnasium Thursday evening for a town meeting. Rice Energy, a highly visible oil and gas company in eastern Washington County, hosted the event.

“Rice Energy would not be drilling wells without a partnership with you,” Toby Z. Rice, president and chief operating officer, said in his introductory remarks to the multitude. “We will have these meetings every six months to let you know what Rice Energy is doing.”

It is a family-owned, independent exploration and production company with about 40,000 acres in Marcellus Shale, all in Washington and Greene counties. The Southpointe-based firm went public in January, and began trading on the New York Stock Exchange Jan. 24.

Exactly one month later, in a photo displayed during a PowerPoint presentation accompanying his address, Toby Rice is shown ringing the opening ball at the NYSE.

Rice, 31, was cooking Thursday, describing his firm and its local operations for a fast-paced 50 minutes, then responding to questions for another 50.

He touted the firm’s production, safety and efficiency records, while stressing the importance of establishing and maintaining cordial community relations.

“The company philosophy is, ‘Be the best operator, not the biggest,’” Rice said. “My last name is on the company name. We’re not going to do anything to damage our reputation.”

No one among the throng attempted to sully that reputation. It was a well-mannered, thoughtful audience, one that raised no hackles – which doesn’t always happen at shale-related events.

A large percentage of members had a personal interest in the proceedings.

“How many people here have a lease with Rice Energy?” Rice asked. Just a little fewer than half raised a hand.

“We spend a lot on drilling, but we spend a lot to get a lot (of natural gas),” he said. “How does that affect leaseholders? The more we produce, the more you get in royalties.”

Those leaseholders are in line to get even more if they refer neighbors to Rice Energy. Those who do that get a $100-per-acre referral fee.

Those weren’t the only financial benefits he extolled. Rice pointed out that townships in eastern Washington County reaped $35 million in Pennsylvania impact fees over the past two years.

“That is a revenue stream that should be around for 15 more years,” he said. “Every well we drill will benefit these communities.”

One of his major concerns is implementation of regulations, through state agencies such as the Department of Environmental Protection and the Fish and Boat Commission, that would restrict the oil and gas industry.

“More regulation is the biggest threat to this opportunity,” Rice said, citing a local scenario from 2011. He pointed out via PowerPoint that North Bethlehem Township passed an ordinance requiring a 1,000-foot buffer between drill sites and buildings, streams, streets and parks.

“This eliminated drilling,” Rice said. “Oil and gas rights became worthless.”

He said a vocal minority pushed for the ordinance, which was repealed in late 2011 “after a majority of residents woke up and spoke up. This was a scare for us.”

Joy Ruff, a community outreach manager for the Marcellus Shale Coalition, was seated in the first row in front of Rice. He called her to the microphone to address this issue.

“In shale development,” Ruff said, “you are going to hear fear tactics. Fear sells. A vocal minority can have power.”

Rice later fielded questions on a number of topics, including the recent fatal explosion in Dunkard Township, safety measures, drilling procedures and noise. One query that was especially thought-provoking related to the potential of Utica Shale.

“Right now,” he said, “the Utica is unproven. If it proves to be successful, it will be a secondary target for people who run out of Marcellus locations. Someone will drill a Utica well in the next year, but it will be a vertical well.”

Some in the audience remained following the final question to speak with the president/COO in small groups. Most departed, satisfied with a generous helping of Rice.

Rick Shrum joined the Observer-Reporter as a reporter in 2012, after serving as a section editor, sports reporter and copy editor at the Pittsburgh Post-Gazette. Rick has won seven individual writing awards, including two Golden Quills.

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