September 27, 2011

A tale of two states: PA booms while NY suffers

Posted in: Published — by Karen Moreau at 3:54 pm

‘If it wasn’t for the gas business, none of these people would be working right now,” David Dalrymple said, pointing to one of his crews building a road in Athens Township, Pa.

By “gas business,” he meant drilling made possible by “fracking” — a process for extracting natural gas that’s legal in Pennsylvania but not yet in New York.

I was riding shotgun with the CEO of Dalrymple Holdings, an Elmira, NY-based family business (since 1902!) whose 300 employees in New York and Virginia build roads, bridges and airports.

Dalrymple’s company is one of about a dozen private contractors in the area that have snared contracts to construct roads for the many new well sites that fracking has spawned.

His good fortune is just a part of the robust activity that I was seeing in Pennsylvania’s Northern Tier, thanks to fracking — and that is painfully absent across the border in New York’s Southern Tier, where it does not yet exist.

Indeed, the region is not only enjoying a boom in jobs, such as those at Dalrymple, but also new investment in infrastructure, such as the top-quality roads the company builds.

What’s more, the roads are paid for by the gas companies. And though they’re being constructed to handle heavy truck traffic to the wells, they’re available to everyone — and everyone benefits.

Pennsylvania’s blessing came at a good time. “Here, we are very fortunate to be living in a cocoon of prosperity,” said Greg Zyla. He’d just taken over as publisher of The Daily/Sunday Review in Towanda, Pa., when the 2008-09 recession hit. With newspapers across the country folding, his has expanded to include a trade publication, The Northeast Driller — “the voice of the drilling marketplace.”

Dalrymple, who also chairs the board of a local bank, noted that the boom from gas development in Pennsylvania has even spilled across the border into New York and helped small businesses there.

“In 2010, we saw the first big impact from gas, with an increase in the general level of commercial-loan activity — where the hotel repairs the parking lot, the convenience market expands,” he said. “In 2011, we see confidence building in the local business community.” At the Elmira airport, the largest one close to the gas activity, “you can’t get a parking space.”

“If not for gas,” he said, “they would be rolling the sidewalks up around here.”

Development of the Marcellus Shale has brought another miracle to the Pennsylvania side of the border: the return of young people.

Corey Mesko, 24, of Canton, Pa., lost his job in 2009 after the recession claimed the small construction firm where he had worked. Most of his old classmates left the state. Now, after a year and a half on a drilling rig, “everything has changed. I have almost paid off my $40,000 in college debt, and I see a stable future.”

His cousin, Brandon Mesko, 26, of Fredericksburg, also lost his job but followed him to the drilling rigs. He plans to work for five years and save for college.

Jessica Route, 21, a New York native, found a job with Mountain Energy as a security guard on a well site; her dad drives a truck for the company. The gas industry has brought them stability, where previous employment was low-wage and sporadic. Jessica can go to nursing school while working for the gas company — and avoid accumulating college debt.

With luck, her hometown of Sharon Springs will consider the future of its young people and resist the movement to ban gas drilling.

Then there’s Jennifer Huntington, who operates a 1,000-acre dairy farm with 500 cows in Middlefield, NY.

She has a lease with a gas company for a vertical well on her farm. The well could produce enough gas to service the municipal buildings and hospital nearby — and give her the much-needed capital to make improvements on the farm. Work there wouldn’t even require fracking.

But a movement led by academics and part-time residents — people wealthy enough to enjoy the country life without worrying about making a living — got the town to ban drilling altogether. She has sued the town to get the ban lifted.

While New York farmers like Huntington struggle against all odds to stay afloat, their Pennsylvania counterparts are leasing their land and reaping the benefits.

Dairy farmer Jim Van Blarcom’s clear-blue eyes light up when he talks about what gas leasing has done for his family and the future of his farm.

Van Blarcom, 60, of Columbia Crossroads, Pa., and his son-in-law Scott Lackey, 31, run a “Dairy of Distinction,” a label earned under the Northeast Dairy Farm Beautification Program. We walked through its new barn lined with Holsteins and Jerseys. The family home nearby was under construction. Jim’s wife, Darlene, was getting her dream kitchen.

Jim’s gravelly voice took on a more serious tone as he talked about what means the most to him — his family.

“My father started out with 135 acres here over 50 years ago,” he said. “For 37 years, I have worked here with my brother to create opportunity for the next generation, like my father gave me.”

They now farm over 1,000 acres.

“It takes a lot of capital to grow a dairy farm. It’s an up-and-down industry, a lot of risk,” he said. “Having the royalties and leasing money took a lot of the risk out, made it more feasible for us to grow food and support our community like we like to. My son Rich was able to come back to the farm because of this. I am blessed with two young people with enthusiasm now to farm.”

But his eyes clouded over when he talked about his friends in farming in the Southern Tier.

“Poor upstate New York is shackled by New York City,” he said. “Sometimes it seems like they don’t want us to have anything.”

Karen Bulich Moreau, a lawyer, heads the Foundation for Land and Liberty.