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Little Canonsburg, PA, Reaching for Shale Crown

It may be too early to compare it to Houston, but little Canonsburg, PA -- until recently known more for its annual Fourth of July parade than its business district -- has over the past two years become the home to some of the Marcellus Shale's biggest operators.

The borough, located 18 miles southwest of Pittsburgh in Washington County, about half an hour from Pittsburgh International Airport, has a population of less than 9,000 but houses the Marcellus offices of Range Resources Corp., Consol Energy, Chesapeake Energy, EQT Production Co., Markwest Liberty Midstream & Resources and others.

Washington County Energy Partners, a consortium of business leaders and public officials, has dubbed the county "the energy capital of the East." That would apparently put the Pennsylvania county in competition with the state of Virginia, whose Gov. Bob McDonnell, has said his state is on the road to become "the energy capital of the East Coast" (see Daily GPI, Oct. 15, 2010). It's not exactly clear what resource base McDonnell is referring to, but Canonsburg's qualifications are evident.

The borough is close to the Pittsburgh manufacturing metropolis, and it's in the middle of the Southwestern Pennsylvania Marcellus fairway which runs south across the state line deep into West Virginia. To the west is potential shale development in Ohio.

Founded in 1802, over the years Canonsburg has been home to a number of industries, including ironworks for bridges and girders and munitions during the Civil War. The town's Fourth of July Committee meets year-round to put on activities and a parade that has grown to be one of the largest in the state. It also claims the title of "America's small town Music Capital with more charted singles than any other small town in the world," including 141 songs recorded by Perry Como, 44 by Bobby Vinton and seven by the Four Coins.

Range Resources, which opened its first Marcellus office in Washington County in 2007, recently broke ground for its 180,000 square-foot facility Appalachian Shale regional headquarters at the new Southpointe II office project in Canonsburg.

The county is Range Resources' core area -- the company has 388 permits, or 77% of the permits issued, and 95% of the production in the county between July 1, 2009 and June 30, 2010 -- and it's where the most Marcellus Shale wells have been drilled in Pennsylvania, according to the company.

Behind Range, Atlas Resources holds 48 permits in the county, while Chesapeake holds 33, Antero Resources has nine and Rice Drilling B LLC and EQT Production each hold seven.

Between July 1, 2009 and June 30, 2010, Washington County was the third largest producing county in Pennsylvania's Marcellus area, accounting for 37.8 Bcfe, trailing only Bradford County (48.6 Bcfe) and Susquehanna County (41.6 Bcfe), which are both located in the Northeast part of the state.

The Southpointe office project is already home to more than 50 energy-related companies, according to the Washington County Chamber of Commerce. Coal giant Consol, which is moving into the natural gas arena, moved its corporate headquarters there in 2008 and dozens of others have followed as development of the Marcellus has blossomed. Earlier this month the Washington County Authority approved the closing of a sale of 7.34 acres of land to be added to the Southpointe II project at a cost of $125,000 per acre.

It was the flood of other energy companies coming into the area that attracted Taggart Global LLC to Southpointe II, according to spokesman Eric Vowcheck. Taggart, a privately owned international coal preparation and material handling company, moved to Canonsburg from Green Tree, PA, in Allegheny County, last year.

"It was mainly the growth of other companies coming into the Southpointe area within the coal sector and the energy sector," Vowcheck told NGI's Shale Daily. "It was just a logical move for us."

And at a time when many Pennsylvania localities are wrestling with Marcellus drilling regulations -- including Pittsburgh, which recently prohibited natural gas drilling (see Shale Daily, Nov. 17, 2010) -- some townships in Washington County are working with drillers to produce more industry-friendly ordinances (see Shale Daily, Nov. 22, 2010).

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