*UPDATE IV* Allegheny County Set For Takeoff as Council Approves Airport Deal

Allegheny County is poised for growth after the County’s decision to allow oil and gas development at the Pittsburgh International Airport. The move brings with it incredible investment and future opportunity for the county and its economic future.

UPDATE IV (10/12/2015; 1:30pm ET): Thanks to Marcellus Shale development at the Pittsburgh international airport, airlines will be paying less to operate at the airport next year. The rate decrease will make prices for airlines the lowest since 2008 and that will mean lower ticket rates for consumers. Costs for consumers have continued to fall year over year as revenue from shale development continues to offset the airport’s budget. According to the airport’s chief operating officer, James Gill:

“$9.7 million in projects drilling revenue will be earmarked toward the reduction.”

The Allegheny County Airport Authority board has been able to reduce enplanement rates at the airport from $14.97 in 2011 to this year’s price of $12.88. This is great news for consumers who will continue to see their ticket rates decrease, and the airport, which is now becoming more competitive and attractive to other airlines.

UPDATE III (12/19/2013; 1:01pm ET): In an effort to reduce air emissions, CONSOL Energy has announced that its will be powering the rigs developing shale under the airport with electricity.  This switch from traditional diesel to electricity means less noise and air emissions from the planned development, which is scheduled to start in the fourth quarter of 2014.

Due to advances in technology and innovation, we are also seeing more operators like CONSOL shift to duel fuels like natural gas.  These efforts have not only greatly reduced emissions on site, but the switch also means less truck traffic.

UPDATE II (10/10/2013; 4:04 pm ET): With preparation beginning to develop the shale resources below the Pittsburgh International Airport, passengers are already seeing the benefits in the form of decreased airport fees.  Amazingly, these reductions have come before any development has even taken place, as they were made possible by the $46.3 million lease bonus paid to the airport.

Passengers already saw a similar price decrease of 50-cents off landing fees in July.  Now, the average cost per passenger will drop even more, from $14.22 to $13.92.

Allegheny County Executive, Rich Fitzgerald, stated:

“The $13.92 rate will be the lowest for the airlines since 2007, when 9.8 million travelers used the airport. Last year, 8 million travelers got on or off planes in Pittsburgh.”

According to Fitzgerald, the reductions should help the airport attract more flights and carriers, which is an important factor in encouraging additional economic growth for the region.

UPDATE I (5/6/2013; 3:00 pm ET): As we highlight the profound benefits this landmark decision will bring to Allegheny County and it’s residents, The Post-Gazette reports on the nuts & bolts of the contract itself. As anyone following these developments may have guessed, this deal was a no-brainer. Kit Pettit, an attorney at the Pittsburgh-based firm Bernstein-Burkley, has extensive experience in reviewing oil and natural gas leases. His take? It’s one of the best:

It is one of the best leases that I’ve had an opportunity to review. I own some property in Washington County, and I would sign my property under this lease without qualification. – Kit Pettit (Allegheny County’s airport gas drilling pact with Consol a great deal, lawyer says, 3/5/13)

Having reviewed over of these 1,000 leases (including his parents), how would Mr. Pettit have advised the County Council?

I’ve represented hundreds of clients with respect to oil and gas leases, and I would advise each and every one of them, if provided the chance to sign this lease, to sign it. – Kit Pettit (Allegheny County’s airport gas drilling pact with Consol a great deal, lawyer says, 3/5/13)

As the details unfold, this deal gets better and better for the airport – and the county – with the best yet to come.

—Original post—

Last week, the Allegheny County Council approved an ordinance authorizing the lease of 9,263 acres surrounding the Pittsburgh International Airport to CONSOL Energy for oil and natural gas development.

The vote, which passed 9-4, comes after years of study and effort to position the county to take advantage of the vast resources in the area. Looking at the numbers, the move will allow them to do just that.

With a $50 million upfront payment from Cecil-based CONSOL, combined with 18% royalties estimated to net an additional $450 million over the next 20 years, the deal could generate half a billion dollars to the airport.

That doesn’t even include the $500 million estimated in investments in infrastructure and outside costs. All told, the deal could net nearly a billion dollars in investments – a promising venture for the county, and one that will benefit the entire community. This much was made clear by the County Executive in a recent Pittsburgh Post Gazette story:

This deal is basically going to be a billion-dollar investment that CONSOL is making in this region without any taxpayer dollars. I feel good about what the taxpayers and the community are going to get out of this.

– Allegheny County Executive Rich Fitzgerald

The Allegheny County Airport is the 49th most trafficked airport in the country, according to Airports Council International, with over 8.3 million passengers funneling through in 2011. However, the airport hasn’t reached its true potential and the county seeks to improve on these statistics with the new deal, and are optimistic the revenue generated by it will lead to lower airline costs and gate fees, thus attracting more flights and passengers.

Energy in Depth spoke with County Councilwoman Heather Heidelbaugh, who applauded the decision to allow oil and natural gas development at the airport:

Accessing the natural gas for sale beneath our airport will provide a multitude of opportunities for the citizens of our county and hopefully increase the desirability of the airport for carriers interested in increasing flights into and out of our airport. The airport is a tremendous asset of our region and this effort will only strengthen its attributes.

– County Councilwoman Heather Heidelbaugh

County Executive Rich Fitzgerald released a statement following the decision, one that highlighted the immediate benefits to the airport, and the future opportunities the deal will provide:

It isn’t often that the County is able to announce a billion dollar investment, but that’s exactly what Council’s action allows us to do.  While the revenues from this deal will go directly to the airport, Allegheny County taxpayers benefit too – by reducing business costs for airlines and increasing our airport’s competitiveness, creating a new source of revenue for the airport to make capital improvements and, perhaps most importantly, allowing additional investment in the economic development opportunities in the airport corridor.

–  County Executive Rich Fitzgerald (Statement on Approval of Mineral Lease at Pittsburgh Airport, 2/19/13)

Along with substantial benefit to the airport and surrounding community, the project will also bring much a needed influx of jobs – both in the immediate and long-term. The construction project itself, and growth the investment will bring, provide a boon to the county and it’s workforce. These opinions were voiced by many local leaders following the approval as noted below:

There’s an abundance of jobs in this industry, and we need to recognize that. Let’s move this county forward and never say no to jobs. – Jack Shea, President, Allegheny County Labor Council (Allegheny County Council approves airport gas drilling plan, 2/19/13)

I think it’s extremely momentous. It shows there is support for this industry. – County Councilman Robert J. Macey (County council votes to allow gas drilling at airport, 2/19/13)

The communities surrounding the airport – Findley Township, Moon, Imperial, Clinton among them – stand to gain long-term investment from the industry as a direct result of CONSOL’s activities at the airport. This bodes well for the future growth and economic success of the region, and its families as noted by Fitzgerald in his statement.

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That part of Allegheny County is one of the fastest growing areas today – current development around the airport already accounts for over 5,000 jobs.  With this type of investment, there will be even more growth of good, family-sustaining jobs in our community. (Statement on Approval of Mineral Lease at Pittsburgh Airport, 2/19/13)

As shale development continues to expand across the Commonwealth, we continue to see a reemergence of business and investment returning to the communities where it is taking place. For the families of Allegheny County, this decision by the County Council is a great example of how a proactive approach can encourage that growth.

Comments

  1. VICTOR FURMAN says:

    Got my monthly copy of “The American Legion” Magazine in the mail today

    Funny how they did a three page story saying America’s ability to tap into it’s own fuel sources will break the backs of OPEC and bring our soldiers home

    Drill a Well – Bring Home A Soldier

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