Energy Slowdown Hits One Town Hard RSS Feed

Energy Slowdown Hits One Town Hard

Businesses are slumping in a Pennsylvania community that had boomed from the gas-fracking revolution

WAYNESBURG, Pa.—As fracking took off here over the past eight years, so did Gary Bowers’s business supplying everything from Gatorade to replacement valves to crews drilling into natural-gas reserves a mile underground.

This year, however, the good times at his firm, Producers Supply Co., came to a screeching halt. Since January, the company’s monthly sales have declined by more than half, as the number of drilling rigs operating in the Marcellus Shale has plummeted to 70 from 131 at the end of last year.

“This thing is spiraling down, and we don’t know how long it’s going to last,” said Mr. Bowers, who expects the rig count to keep falling. “It’s new territory for Appalachia.”

The economic pain from lower oil and gas prices is spreading to small towns and businesses across Pennsylvania and parts of Ohio and West Virginia that had been riding a wave of prosperity from the natural-gas shale boom. Now, companies that cater to drillers, as well as hotels, restaurants and even farmers, are feeling the pinch.

A similar story is playing out in the oil fields of North Dakota, Oklahoma and Texas. U.S. energy companies have lopped off more than 150,000 jobs over the past year. But experts say many small businesses and landowners in those states have become accustomed to the boom-and-bust cycles of the industry.

Pennsylvania is now the nation’s No. 2 gas producer, behind Texas. In the Marcellus Shale region, however, the gas industry’s sudden rise is a relatively recent phenomenon, and this downturn is the deepest the area has experienced since the fracking boom. According to local officials, the sudden pullback has caught many small businesses that sprang up around the industry off guard.

Read full article at The Wall Street Jornay