Local companies drill into natural gas industry
Natural gas extraction helps enable a Scranton ammunition plant to aim for different business objectives.
General Dynamics Ordnance and Tactical Systems makes swivel elbow and drill-pipe connecting joints used at the region’s Marcellus Shale gas wells.
“They definitely are making up a meaningful part of our business at this point,” said Jeff Brunozzi, vice president of operations at General Dynamics, formerly Chamberlain Manufacturing Corp.
Sales of manufactured gas-development materials help companies in the area diversify and tap into the lucrative energy-development market.
“Drilling is here to stay, there is money to be made and the opportunity is definitely there,” said Teri Ooms, director of the Institute for Public Policy and Economic Development, a regional research and analysis agency. “It’s creating jobs and putting money back into the area.”
General Dynamics, which manufactures parts and casings for military projectiles, relied on Pentagon orders for 95 percent of its production in 2009, Brunozzi said. Today, he said, defense work makes up about 70 percent of the work at the plant, which employs 300 people.
“It’s a big deal to have a diversified business and not rely on a sole customer in the U.S. government,” Brunozzi said. “It helps stabilize employment levels.”
Employment has increased at Finch Technology in West Pittston because of gas-related business, managing partner Cliff Fay said.
Machinists and welders at Finch Technology make equipment to process soil and other materials coming out of wellheads, machinery to treat hydraulic fracturing wastewater and parts for staircases and augurs at drilling sites, Fay said.
The company has increased employment to 13 from four a year ago and gas-related work makes up 25 percent of Finch’s business, Fay said. The company also manufactures parts for industrial kilns and steam locomotives.
“We are trying to grow across a broad front and diversify,” Fay said. “We want to provide good, long-term jobs.”
Linde Corp., a Honesdale-based utility and heavy-construction contractor, has grown into a major industrial support player in the region’s gas industry.
Linde had no involvement in gas development in 2007, company spokesman Kevin Lynn said.
“Last year, 90 percent of our revenue was from Marcellus,” he said. “It has completely redefined our business.”
Linde and its partners produce two products used at gas wells. From its base of operations at the Carbondale rail yard, Linde and another company manufacture and ship “liquid mud,” a clay-based compound that helps seal gas wells and remove cuttings. Linde and another partner at the site produce and ship wooden mats used widely in the gas industry to stabilize wet ground at drilling sites for movement of heavy machinery.
Linde, which also lays pipe at gas wells and transports water to drilling sites, employs about a dozen people at its Carbondale operations. The company has experienced 25 percent average annual revenue growth over the last three years, Lynn said.
“If we can help other companies, some of that goodwill will trickle down to us,” Lynn said.
The trickle from gas development runs across many sectors, including transportation, engineering and business services, Ooms said.
“There’s multiple levels of impact,” Ooms said. “It’s huge.”
General Dynamics found an impact several years ago, even though it has been forging elbow joints since about 2003 and connector joints for more than a decade, Brunozzi said.
The elbow joints, which weigh from 30 pounds to 100 pounds, regulate the flow of high-pressure fracking fluids into wellheads, Brunozzi said. The tool joints form threaded couplings between 30-foot sections of oil- and gas-drilling pipes. Both products are sold to manufacturers of drilling materials.
General Dynamics located a buyer for the elbow joints about two years ago, Brunozzi said, and sales have grown steadily.
“We needed to go find the entry point and the entry point is in Texas to get to Northeastern Pennsylvania Marcellus Shale,” he said.
By James Haggerty (Staff Writer)
Published: June 25, 2012