JLCNY In the News

Natural-gas supply is a sparkplug for state

By This email address is being protected from spambots. You need JavaScript enabled to view it., PITTSBURGH TRIBUNE-REVIEW
Sunday, August 14, 2011

Raymond J. Bologna has a 1,300-foot-high coal pile and tried for more than 20 years to build a power plant to burn it.

The economy's collapse killed his last good chance to make it happen, but he hopes that natural gas — the new economic sparkplug — can revive his project.

Bologna wants to build two power plants at his site in Robinson, Washington County, one fueled by the waste coal piled there and another fueled by gas from the region's deep shale formations.

"We're here to create jobs and create value," Bologna said, promising an annual payroll of $6 million to $7 million and nearly 70 employees. "It looks like the Marcellus shale is going to get us there."

Because of high oil prices, energy markets haven't helped the nation's sputtering economy. But gas-powered businesses might be better positioned to blossom during tough times, analysts said.

"Cheap natural gas is the best thing to happen to the U.S. industrial economy in quite some time," said David A. Pursell, managing director and head of securities at Houston-based Tudor, Pickering, Holt & Co.

The wider economy, however, still suffers from high oil prices, he said. Consumer spending is so dependent on oil prices that recovery is difficult. He noted reports from Wal-Mart executives this spring that said gasoline prices forced shoppers to consolidate trips and buy less.

Natural gas supplies are likely to increase because of shale formations such as the Barnett shale in Texas and the Marcellus, which is providing a special boost for Pennsylvania, analysts said. Industries such as steel and glass should benefit from having a cheap fuel source nearby. And there's talk of building processing plants that could boost petrochemical and plastic industries in the region.

"That manufacturing sector has been sort of the bright spot, one of the few bright spots of the economy in the last couple years," said Seth Blumsack, assistant professor in the Department of Energy and Mineral Engineering at Penn State University.

Power plants should continue to be strong performers, experts said. Natural gas-fueled plants dominate the industry's plans and likely will be its growth sector, Blumsack said.

Bologna's Robinson Power Co. obtained a state permit for a natural gas plant but needs an environmental permit for the coal-burning plant, he said. He's negotiating with three companies he declined to name, to become an operating partner.

"You can never be worried," Bologna said about economic volatility. "Regardless of what happens, you have to be teed up and ready to go."

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