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First the state and then the world?Shale gas experience in Pa. propels firms to other opportunities

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Firms with experience in unconventional natural-gas drilling in Pennsylvania have broadened their footprints outside the commonwealth.

Those places include Ohio, West Virginia — and Poland?

"The area of North America that is most like Poland is Pennsylvania," said R. Timothy Weston, a partner based in the Harrisburg office of law firm K&L Gates LLP and who leads its global energy practice.

The geology is similar. The climate is similar. Even how far down the gas deposits are in their respective shale formations is comparable, Weston said.

K&L Gates has a substantial office in Warsaw that it acquired in 2010, he said. Natural-gas drilling isn't the only business done from the location, but energy is a major part of the mix, Weston said.

Eastern Europe and Poland have been evaluating for the past couple of years whether their shale will produce useful quantities of natural gas to supplement their supplies, he said.

They — and Western Europe, for that matter — have relied on pipelines bringing in natural gas from Russia. For geopolitical reasons, many would like to be less reliant on that, Weston said.

A lot of K&L Gates' work so far has been disseminating information and running seminars based on its experience in North America, including Pennsylvania, he said.

There is interest even from high-level government officials — four of whom attended a recent K&L Gates event — in what people have done in other parts of the world, Weston said.

Several of its clients are exploration and service companies that are doing the experimental well drilling in the country, Weston said.

A lot of the legal framework for how the resource will be developed in Poland is not totally established, he said.

There are key differences between Pennsylvania and Poland, however.

In Poland, the country's government owns the mineral rights that include natural-gas deposits, whereas many are privately owned in the United States, he said.

Officials also develop regulations much differently than in North America, Weston said.

In the United States and Canada, it's more of a do-and-adjust approach, he said. But in Europe, regulators want to cover every possible scenario in theory before they allow much of any activity to proceed, Weston said.

Going forward, there is much more potential international activity brewing in shale gas, he said.

Although there are differences from place to place, having experience in one part of the world helps to expand business into another, Weston said.

Back in North America, Dauphin County-based civil engineering firm Herbert, Rowland & Grubic Inc. opened its first two out-of-state offices in 2011 and 2012, said Jason Fralick, vice president-central region.

He is based in the firm's State College-area office.

Ohio and West Virginia, where the new offices are located, have seen increasing interest from shale gas drillers recently, he said.

They include firms HRG has worked with in Pennsylvania, and some have elected to extend the relationship to the other areas, Fralick said.

HRG first got involved with the Marcellus Shale-gas-drilling industry around 2008, primarily through surveying work related to the land titles needed for securing leases, he said.

Work expanded to include design and permit processing in 2009 and 2010.

It further increased to a range of environmental impact services, municipal roadway maintenance agreements and other offerings, Fralick said.

Marcellus drilling-related work hit at just the right time, considering the downturn in construction of housing developments, shopping centers and public-sector projects.

Those are a significant part of HRG's traditional base of work, he said.

Without shale gas work, the company would not have been able to grow by about 40 to 50 staffers in the past few years, nor keep revenue steady to up a bit, Fralick said.

Growth to other states is possible, particularly in New York, where there has been a moratorium on fracking, he said.

There also are pockets of Virginia and Maryland that hold promise, Fralick said.

But it's not a given that HRG can move into a market and get work just because it's branched into Marcellus in the commonwealth.

Across the country, firms have been hit by the economic downturn and have been watching for opportunities from shale drilling, he said.

It is one of the things that make establishing local offices in other regions important for HRG, Fralick said.

Brent Burkey

Brent Burkey

Brent Burkey covers York County, agribusiness, energy and environment, and workforce issues. Have a tip or question for him? Email him at brentb@cpbj.com. Follow him on Twitter, @brentburkey.

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