May 1, 2020 3 min read

Clarification: This article has been updated to reflect that Washington COunty Chamber of Commerce President Jeff Kotula did not ask Marcellus Shale Coalition President David Spigelmyer a question posed by a reporter during the virtual Chamber of Commerce event.

The leader of an industry lobbying group spoke to members of the Washington County Chamber of Commerce on Thursday, expressing optimism about the shale gas business despite signs it was struggling in the region even before the COVID-19 pandemic shut down much of the nation’s economy.

During remarks by David Spigelmyer – president of the Marcellus Shale Coalition – chamber President Jeff Kotula didn’t pose a reporter’s question about how Spigelmyer expects investigations by the Pennsylvania attorney general’s office into the drilling industry to affect the future of companies in the area. Instead, Kotula’s questions focused on issues like demand and natural gas prices, which have taken a hit because of the outbreak of viral infections.

Prices are at “almost an all-time low” of $1.18 per thousand cubic feet, compared to wellhead prices of $13 per thousand cubic feet in 2008 during the early days of the industry, Spigelmyer said.

“This COVID-19 stand-down has really impacted the downstream use from commercial-industrial applications in particular,” he said. “Some industrial applications have been deemed as life-essential, and continue to operate – some of those at max capacity.”

But, he added, stopped operations for other industrial users of gas has reduced demand.

He said that demand “generally” has grown for natural gas nationwide, primarily because of its use in generating electric power.

“I think energy and natural gas in particular will be a catalyst to restart the engine of our economy.”

It is unclear how those predictions jibe with ongoing criminal inquiries into the state’s oil and gas industry.

Earlier this year, Attorney General Josh Shapiro’s office confirmed the existence of “more than a dozen” such investigations involving the state’s oil and gas industry to media outlets. A representative declined to offer information on the progress of those investigations on Thursday.

“Sorry, but we cannot comment,” Mark Shade, the office’s press secretary, wrote in an email.

Kotula, who asked questions as host of the discussion, didn’t ask Spigelmyer a reporter’s written question submitted during the remotely held event about what the investigations might mean for the industry in the area.

Despite accounting for about 20% of domestic gas production in the country, there were signs that the region’s drillers were facing challenges even prior to COVID-19.

Range Resources, one of the main operators in Washington County, cited slumping prices when it laid off 40 employees last June, and then another 50 in November.

CNX, another significant local player, laid off some 70 workers last summer.

Spigelmyer did address a question about decisions by some companies to sell their assets in the region. Chevron recently did so as part of a plan to move extractive operations to the Permian Basin, which is in Texas and New Mexico.

“There’s no doubt that margins are really tight,” he said. “It’s no secret that Chevron has announced that they’re going to sell their assets and move out of this basin. Efficiencies are really, really important right now.”

Still, he called local shale formations “a world-class energy play” that “is not going to go away.”- but many of our industrial applications’ stopped operations have a very significant impact on the demand for natural gas.”