Pennsylvania to remain center of U.S. gas drilling, experts say

Like a runner who’s gotten a big head start in a race, Pennsylvania may be set to dominate natural gas production in the Marcellus Shale region for many years to come, experts say. With billions of dollars already invested in leases, wells and related infrastructure, the state is considered a cost-effective place to do business. And a plunge in wholesale prices has made being thrifty a must for some companies, dealing a potential blow to would-be upstart New York state. Fadel Gheit, an oil and gas analyst with Oppenheimer & Co. in New York City, says he expects Pennsylvania to be the center of activity for the next few years, if not longer. “The industry will always stay with what they’ve got,” he says, adding that for many companies, there’s less risk sticking with a state—and with regulations—they know. New York, he adds, is generally seen as a more liberal state than Pennsylvania and thus more prone to imposing stricter rules on drilling. An existing base of suppliers also helps, Gheit says, as well as a growing network of pipelines linking the Pennsylvania wells to regional and national hubs. Shell Oil Co. has chosen western Pennsylvania as the site for a huge new petrochemical plant because that region has more of a type of gas that can be turned into industrial and consumer products, such as plastics. Read the full story from The Associated Press for more analysis here.