Slowdown In Natural Gas Production Bringing About Significant Layoffs

PITTSBURGH (KDKA) -- Falling natural gas prices have been a boon to consumers, especially here in western Pennsylvania where Marcellus natural gas is plentiful and cheap.

"We're in a perfect spot. We're now the main production area for natural gas in this country, and it's benefiting customers to a large degree," said Joe Gregorini, of Peoples Natural Gas.

But depressed prices haven't been so great for the Marcellus gas industry itself.

"We're going to see some tightening in shale and in the capital markets to be able to fund additional development," said David J. Spigelmyer, of the Marcellus Shale Coalition. "I didn't say it would go away, I did said it would tighten."

That tightening has begun. Production is down throughout the state, and Chevron just announced its plan to lay off 162 workers in the state.

In a statement, the oil giant says it will be restructuring its Marcellus and Utica shale operations and that the cuts are effort to "streamline its organization and ensure our workforce is the right size for expected activity levels in this region, which are lower than originally anticipated."

Chevron entered the Marcellus play four years ago with high expectations, but falling prices and a lack of pipelines has resulted in a natural gas glut here.

Gas just sits in several hundred tapped wells across the state waiting.

"We have to build the infrastructure to get that natural gas to market," said Spigelmyer. "We're working hard to get that done."

But until prices rise and those pipelines are built, production here in southwestern Pennsylvania will be cut back and more layoffs can be anticipated.

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