Here’s the real story, told in three chapters on a single day.

Posted on: March 13th, 2013 by NoGreenSlime No Comments

The Pittsburgh Technical Institute breaks ground on a new $3.5 oil and gas technology center to train the future workforce, the Washington County Chamber of Commerce (looking a 73 new economic development projects totaling $364 million) is opening a second office, and a family-owned Washington County natural gas service company has experienced a 10 percent growth rate in business every year since 2008.

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Eight shiny new shovels were wielded by eight VIPs wearing suits and white hard hats, each emblazoned with three black letters — PTI — during a groundbreaking ceremony Feb. 26 for Pittsburgh Technical Institute’s $3.5 million energy technology center that will house courses in oil and gas electronics.

Construction is part of the North Fayette schools’ mission of “preparing students for high-paying, in-demand jobs,” said Greg DeFeo, PTI president, adding that school officials attended conferences and “talked to people who hire” before starting construction and planning new courses and degrees.

Construction of the 15,392-square-foot steel structure is expected to be completed by autumn. Staff is enrolling students for the oil and gas electronics program that begins in July, and the new welding technology program that begins in October.

Part of construction is funded by a $750,000 grant from the Pennsylvania Redevelopment Assistance Capital Program.

General contractor is Franjo Construction Corp. of Homestead. The architect is Tasso Katselas Associated Inc. of Pittsburgh.

The building will include classrooms and three labs with nearly $1 million in equipment.

The project includes a rain garden.

The two new programs “will support the energy industries with a pipeline of skilled individuals,” Mr. DeFeo said. “Research suggests a high demand in Western Pennsylvania for electronics professionals at compressor stations, at energy facilities and on pipeline projects, who have the skills to monitor the extractions, storage and transmission of this natural resource.”

Jobs are being “created by the exponential growth surrounding the exploration and development of Marcellus Shale and, in the future, Utica Shale,” says PTI brochures. Student interest and employer reactions” to the new programs “has been strong.” About 200 students are expected to enroll in the new programs in 2013.

More than 60 people attended the groundbreaking, including staff from the offices of the governor, the U.S. Congress and the state Legislature as well as representatives of companies such as Range Resources and Consol Energy Inc.

“Tens of thousands” of people will be hired through the end of this decade to work in the gas and oil industries, said Bill Flanagan, executive vice president of the Allegheny Conference on Community Development. Many of those jobs will require more training than high school but less than a four-year college.

PTI is a “career-focused two-year college,” Mr. DeFeo said, and construction of the new building is “the next milestone in our vision.”

Nearly 2,000 students on the 180-acre campus take degree and certificate programs in areas including business, criminal justice, hospitality and culinary arts, nursing, trades technology and energy and electronics technology.

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Thanks in large part to 73 new economic development projects totaling $346 million in capital investment in Washington County in the past year, the county’s Chamber of Commerce said it will open a new office in Southpointe.

“The Washington County Chamber of Commerce is the largest chamber in Washington County and the second largest chamber in the Greater Pittsburgh region,” said Barron P. McCune Jr., chairman of the chamber board of directors. “Many of our 1,100 members are located in Southpointe, and we wanted to ensure that they have closer access to our economic development programs, networking events and advocacy initiatives. This access is especially important with our natural gas and energy members as we work together on expanding energy opportunities and partnerships for our entire business community.”

Chamber officials last week said the main office on East Beau Street in Washington would remain open. The new office on Southpointe Boulevard will be open by mid-March, said chamber president Jeff Kotula.

The announcement came during a “state of the county” address last Thursday by the county commissioners at the Southpointe Golf Club. Commissioners outlined areas of growth countywide, such as the energy, hospitality and entertainment sectors, spurred by development of the Marcellus Shale and The Meadows Racetrack and Casino.

During the past several years, the county has received $7.7 million in gaming revenue from the casino — accounting for an additional $25.8 million in public and private investment, commissioners said.

Altogether, the local share account — which is local government’s share of gross terminal revenue generated by the casino — has generated $52.2 million since 2008.

Most of the projects funded with that money have involved infrastructure, such as sewage and waterlines, along with economic development initiatives and community development projects.

“Once again, Washington County continues to lead the Greater Pittsburgh region in terms of economic development projects, energy production and job creation,” said Larry Maggi, chairman of the board of commissioners. “In 2012, our business community announced $346 million in new business investment, which will account for an additional 2,530 jobs in Washington County.”

Mr. Maggi pointed to continued growth in the energy sector, where the county ranked first in the Greater Pittsburgh region in natural gas wells drilled and drilling permits issued in 2012.

“With 753 unconventional wells drilled from 2005 to 2012, Washington County’s leadership position in our region and state truly earns us the designation as ‘Energy Capital of the East,’ ” he said.

The county is ranked fourth in the state for natural gas wells drilled and second among drilling permits issued in 2012.

Tourism spending in the county also is up, commissioners said, citing a report from the state Department of Community and Economic Development that shows Washington County with the second largest share of visitor spending in the Southwestern Pennsylvania region.

“In their most recent report, the department found that in 2011, direct visitor spending dollars in Washington County was $669.2 million, up from $583 million in 2010,” said Commissioner Diana Irey Vaughan. “This is a nearly 15 percent increase.”

Specifically, Ms. Irey Vaughan cited the 4.1 million guests who have visited the casino each year since it opened five years ago, and the Mylan Classic golf tournament, which has drawn 66,000 visitors and more than $24 million in economic impact to the region in the past three years.

“The Mylan Classic also has been an exceptional partner in promoting Washington County,” Ms. Irey Vaughan said. “Through the event’s four-day coverage on the Golf Channel, we have been able to broadcast the county’s economic development, tourism and energy opportunities to both a national and international market.”

Commissioners also outlined growth in the county’s business parks, including Southpointe, Southpointe II, Starpoint and Alta Vista.

They said investment in the county airport in South Franklin is also ramping up, with recent improvements, including runway pavement repairs, fencing and terminal upgrades.

A strategic plan for the airport was unveiled in 2011 and included plans to lengthen the runway and development of aviation-related businesses.

The 350-acre airport is home to 85 aircraft, 41 hangars and seven aviation businesses.

Ms. Irey Vaughan said the county is “actively pursuing” an interchange at the site along Interstate 70 to spur development.

Perhaps the only downside in recent years, according to commissioners, has been the county’s fight with local school districts over a countywide property tax reassessment.

The county hasn’t conducted a reassessment in more than 30 years, and is fighting a court battle with the McGuffey and Washington school boards, who feel their residents are being unfairly taxed.

“We don’t want to waste taxpayer money on a reassessment when the state Legislature needs to change the law,” said Mr. Maggi, who said a reassessment would cost about $7 million.

Commissioners also feel a reassessment would result in higher taxes for most property owners, despite a formula promoted by the school districts that indicates that one-third of the taxes would go up, one-third would go down and one-third would stay the same.

“That’s propaganda, ” Mr. Maggi said. “All you have to do is look North. In Allegheny County, 97 percent of the people’s taxes went up significantly.”

Mr. Kotula, the chamber president, encouraged business owners and local officials to continue planning.

“It is important to remember that the successes we are experiencing are not accidental,” he said. “They are the result of years of strategic planning undertaken by the Washington County commissioners, the business community and our economic development organizations to anticipate future growth and be proactive in developing site-ready business parks. While we, of course, did not foresee the tremendous positive economic impacts of the energy industry 15 years ago, the decisions made then to develop ready-to-go sites made our county uniquely positioned to take advantage of these economic opportunities.”

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Joyce Mayernik and her sister Denise Johnston are the first to admit they felt overwhelmed when they took over Washington Rotating Control Heads Inc. two years ago.

The drill part manufacturer started by their father and run by their brother hadn’t been a big part of their lives since the days of loafing around the shop in high school. As partial owners later in life, they attended quarterly meetings but neither had gone into the family business: Ms. Mayernik was an interior designer and Ms. Johnston was a nurse.

But when Vaughn Johnston suddenly died, the sisters were left without a brother and the company without a leader. With their father retired, the responsibility fell to the sisters.

“We didn’t have 20 years to learn,” said Ms. Johnston.

The loss couldn’t have come at a more critical time for the business, which builds and services drilling heads and “diverters” that manage mud and fluids generated by oil and gas development. Their product is one of many used on a rig, but had been mostly seen on shallow, vertical wells throughout the state.

By the time the sisters took over, Washington County had earned the nickname “mini-Odessa, Texas” thanks to the drilling boom in the Marcellus and Utica shales that lie thousands of feet below their shop near downtown Washington, Pa.

Once a business whose revenue ebbed and flowed with the greater economic picture, the Washington Rotating ownership found itself inundated with orders from some of the biggest companies in the world.

Soon after taking over, Ms. Mayernik had to turn to YouTube to learn about the drilling process. Now, two years later, the business has brought on six new full-time employees, increasing its total workforce to 22 full-time employees, to handle the growing business.

And it soon will launch a rental operation specifically created for the more sophisticated, demanding client base that’s arrived with the Marcellus boom.

In the past, a driller who contracted with Washington Rotating was a guy who could stop by the store in person. When enthusiasm for the Marcellus Shale picked up, that “guy” was suddenly some of the largest, most sophisticated companies of any sector.

Two decisions were made to help attract the new, big kids on the block.

First, the company started the six-month process of becoming certified by the American Petroleum Institute. Certification from the industry group can be a dealbreaker for large companies who use the stamp of approval to weed out possible subcontractors.

“We have to keep elevating our game just to play,” said general manager Tom Flickinger, who was hired by the sisters after a career helping companies in crisis.

Second, they started an offshoot called Arch Rentals LLC, an equipment rental service that will launch on April 1 and service operations within a 200-mile radius of Washington County.

Drillers based west of the Mississippi tend to rent equipment rather than purchase it like their counterparts in the East, said Mr. Flickinger. Oftentimes, they’re huge operators — think Chevron or Royal Dutch Shell — that don’t want to be weighed down by assets.

When those companies started moving into the Marcellus region, companies like Washington Rotating that don’t offer temporary contracts risked getting passed up.

The company hopes to have 20 parts rented by the end of the year.

The launch of a new side business is a major change for a company that started as a spinoff itself back when the Marcellus was just an old rock.

The owners’ father, Bob Johnston, was working in his machine shop in 1976 when his cousin, a driller, came by with a faulty drilling head. Mr. Johnston returned the device a week later with some new accessories, changing its bearings and seals and adding an oil line that could continually supply it with fuel.

The cousin was promised the repair would last a month; it lasted four under grueling conditions and Mr. Johnston got a new business.

Since then, most clients used Washington Rotating devices for shallow, vertical oil wells throughout Appalachia, with the company building a substantial international footprint over the years.

That changed with the advent of horizontal drilling and hydraulic fracturing, which unlocked deep reservoirs like the Marcellus around 2007. Business has grown about 10 percent year-over-year since 2008, said Ms. Mayernik. The private company declined to release more specific revenue figures.

Its parts have been used by drillers around the world — one recently finished diverter costing about $50,000 sat in the shop this week ready for a client in Africa and operations manager Rick McGinney took a call from Oman on Monday.

Since taking the reins, Ms. Mayernik and Ms. Johnston started hanging flags in the shop from every country where company equipment has been used, a mini-United Nations display intended to remind workers where their products will end up. The list includes heavily drilled pockets of Russia and nascent formations in Indonesia. The company is eying potential business in Australia, where Mr. Flickinger said analysts are expecting a drilling boom.

It’s a far cry from the early days of YouTube tutorials, though some touches of Ms. Mayernik’s former design career can be seen in office she shares with Ms. Johnston. It is christened with shining hardwood floors and Restoration Hardware lighting fixtures.

A big table serves as a workspace for now — the two sisters are still searching for a desk they both like.

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