— Three years ago, Larry Mostoller had two employees and was trying to develop a business park outside Somerset.

Today, Mostoller employs 100 people and provides work for more than 30 subcontractors.

He has gotten involved in the Marcellus Shale industry.

“I am a Marcellus overnight success,” Mostoller said.

Mostoller is co-founder and CEO of Somerset Regional Water Resources, a two-year-old company that provides nearly all general labor needs on a gas drilling site. The list includes truck dispatching, frack-site preparation and wastewater transportation to off-site facilities, he said.

By late 2011, he will have a facility in Somerset County that treats 11⁄2 million gallons of gas-well water daily.

Mostoller is proof of Marcellus Shale’s role in changing the economic landscape.

Projections for new jobs and the economic impact generated by the industry have become a point of contention between the cheerleaders and the naysayers.

But, one thing is certain: Marcellus is having an impact.

‘Market ourselves’

Regional economic development leaders are optimistic that the impact for this region will be significant – even if Cambria and Somerset do not light up the state Marcellus maps in terms of quality and quantity of the deep gas reserves.

Economic leaders – including Linda Thomson, president of Johnstown Area Regional Industries, and Jeff Silka, executive director of Somerset County Economic Development Council – have been watching the Marcellus action to the west of the region and in the state’s northeastern counties.

“JARI has identified the Marcellus Shale opportunity as one of the top opportunities for our region in the coming years,” Thomson said.

Efforts are being made to look at Marcellus from a number of vantage points.

This region is emerging as part of the Marcellus “fairway” – with Cambria County in the middle of the shale play, she said.

JARI is working to help local companies become part of the supply chain for well development and transmission-line construction.

“We’re sort of building our own consortium of industries to market ourselves as a regional supply chain,” she said. “The Marcellus industry needs just about anything and everything. It’s just amazing the amount of things that are needed.”

Significant Marcellus development may take some time to reach the region, but Silka said the white trucks of the drilling industry are already evident.

“The spinoff is where we’re going to see the economic impact,” Silka said. “The regional area is going to mobilize. We’re probably two or three years down the road, but now is the time to start planning.”

While the Marcellus process is all about pipes and welding, as well as water, sand and other raw materials, the trickle-down impact can be significant, said one man who has watched northeastern Pennsylvania grow economically during the past two years.

‘They can’t keep up’

Bradford County Commissioner John Sullivan said Marcellus-related opportunities have meant jobs in various areas.

“They’re building three motels in the county,” said Sullivan. “But it’s a lot of little things, too. A couple of ladies I know clean houses and they can’t keep up with all the work.”

Sullivan has a friend who sells tires, and the Marcellus drilling has had a significant impact on his business. Another friend has a quick-lube shop and is overrun with business, the commissioner said.

Randy Frye, dean at St. Francis University’s business school, compared Marcellus to the California gold rush of the 1800s or the oil discoveries in Pennsylvania.

“It’s a cause for excitement,” Frye said. “It looks like it could be a big boom.

“A lot of people are excited about it. A lot of mining companies and steel companies could benefit from the supply chain.”

St. Francis is looking for ways to help existing or start-up companies capitalize on the Marcellus boom, said Ed Huttenhower, assistant dean for community and economic development.

“We’re working on some things at the small business development center,” he said.

“We are in the process of compiling a database of the players in the Marcellus Shale and small business.”

Louis D’Amico, executive director of the Pennsylvania Independent Oil & Gas Association, has been in the business for 30 years. He said he has never seen anything close to the boom, rapid growth and economic potential brought by the Marcellus Shale gas.

“We were struggling,” he said.

“Prior to Marcellus Shale in Pennsylvania, there were 29,000 employed directly by our industry. Over the next few years we anticipate close to one quarter of a million – just industry-related jobs.”

Williamsport, in Lycoming County, has seen 75 new businesses open during the past 18 months – since the surge in Marcellus drilling began there.

Traffic at the Elmira Airport, just across the New York border, increased by 43 percent this year, said Tom Murphy, co-director of the Marcellus Center for Outreach and Research, (MCOR.)

‘Windfall for this region’

The money is already starting to flow into the region through ventures such as SRWR, built by Mostoller with help from his father, Lloyd Mostoller, Jim Barron of Somerset and William McIntyre of Indiana.

Mostoller is ready to begin construction on a $35 million fracturing and drill-water recycling plant in the same spot he had tried to develop a business park.  

“I’m still building a business park,” he said. “Because of the treatment plant, the vendors who are serving us are locating there.”

Money is flowing in other ways, including efforts that could keep water rate increases to a minimum for many.

Highland Sewer and Water Authority has sold the mineral rights to more than 40 acres of land in Adams Township to PMG Minerals. The price tag was $1 million.

The Cambria Somerset Authority is negotiating for the leasing of gas rights on about 5,000 acres of land around its five water sources.

“It has to be controlled,” said Jim Greco, CSA chairman. “If it is, it will be a real windfall for this region.”

Many public water authorities, including the Greater Johnstown Water Authority and the tiny Gray Area Water Authority, have sold water for well drilling and fracking.

The Jackson Township Water Authority capitalized on the one well drilled near Route 22, said township Manager Dave Hirko.

“It was a financial boost for them,” he said. “The drillers were ordering from local suppliers and we saw the (drillers’) trucks parked at the local restaurants.”

‘Project into the future’

Long after the drilling rigs move out, the Marcellus gas is expected to provide a steady price on natural gas for decades to come.

Knowing the long-term energy costs to operate a plant in Pennsylvania will go a long way in enticing businesses, Murphy said.

“We’re seeing a real change in Pennsylvania, by our read,” Murphy said.

He estimates that Pennsylvania, long an importer of energy, will be an exporter of energy by 2013.

And what stays here will translate into growth, he predicted.

“This natural gas means more equalized pricing,” Murphy said. “More businesses are likely to locate near the source.”

Bill Brice, a professor emeritus in geology and planetary science from Pitt-Johnstown, sees Marcellus gas bringing a “stability of the market supply.”

“The reserves are large enough to project into the future,” Brice said. “Businesses will know they can depend on the energy, and supplies won’t be interrupted by a snowstorm in Michigan.”

Concern in recent years that reserves of liquified natural gas were running out prompted construction of facilities to store offshore gas. Now many of those facilities are sitting idle, Murphy said.

The state Department of Community and Economic Development is stepping up to help businesses looking to grab onto the Marcellus gas coattails, said Brent Vernon, a development specialist with DCED’s Governor’s Action Team.

“We’re extremely ecstatic about what we’re seeing,” he said. “There’s certainly significant opportunity for wonderful potential, even if it’s half what the reports say.”

‘Pave the way’

Vernon used the term “game-changer” when discussing Marcellus’ impact statewide. He said DCED is ready to identify opportunities, provide site search assistance and set up networks for businesses to get in touch with their needs.

“We want to help pave the way for business, especially for smaller businesses not yet involved,” Vernon said. “We’re working directly with gas companies and subcontractors. A lot of businesses are looking to find their way into this.”

DCED views its role in the mushrooming Marcellus industry as being a cheerleader and navigator.

“If we don’t have the answer, we know how to get these people in touch with the answer people,” Vernon said. “We feel this is a tremendous opportunity for the state, but it has to be done right.”

Kathryn Klaber, president and CEO of the Marcellus Shale Coalition, a year-old industry organization, said much of the economic benefit will be outside the direct industry.

“The jobs story is starting to have a much broader reach,” Klaber said. “Right under our noses, we have this supply chain going on.”

Robert Donnan, who owns a landscaping company outside Pittsburgh, is concerned that the promise of economic benefits will overshadow the need to develop the industry in a responsible fashion.  

“It’s not just about money. It’s not just about jobs” he said.

“This is going to be a people story.”

Vernon cautioned that much will depend on seeing that the drilling and extraction process is done properly.

“Everybody has a vested interest to make sure it is done safely and correctly,” he said. “It’s really fascinating to know the depth and breadth of this industry.”

‘It’s just beginning’

While economic growth, especially in northeastern Pennsylvania, is coming by leaps and bounds, it’s important that growth is planned well, Murphy said.

“How can we eliminate the boom and the bust? By planning and addressing things in a proactive way,” he said.

State Sen. John Wozniak, D-Westmont, said the Johns-town region is on the cusp of an improved economy.

“The train hasn’t left the station,” Wozniak said. “It’s just beginning and there is a tremendous opportunity out there.”

Marcellus Shale has the economic potential for getting Pennsylvania out of its deficit budget woes and onto a road to prosperity, Mostoller believes.

“Everybody is going to get a little piece of this,” he said. “It’s absolutely phenomenal. All of us are going to live better.”

As the Marcellus Shale is tapped closer to major transmission lines and the large population hubs of the Northeast, more drilling will be done in the middle part of the state, Mostoller predicted.

He is convinced that Marcellus Shale gas will continue to help meet the nation’s energy needs for years to come, and its development will take decades.

“The person that drills the last Marcellus well has not been born yet,” Mostoller said.