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Manufacturing, Jobs, Shale Industry: All in a Day's Visit
KENT, Ohio – When U.S. Secretary of the Interior Ken Salazar wanted to see firsthand how oil and natural gas exploration is affecting mainstream America, he chose a company in northeast Ohio.
"I think this is great evidence that manufacturing is back, and there's a great nexus between manufacturing and natural gas," Salazar told reporters shortly after touring MAC LTT's liquid tank trailer plant here. "We need to move forward with job creation and with an energy agenda for the country."
MAC LTT manufactures tank trailers used to transport liquids and other products to well sites across the country. The company operates three plants in northeast Ohio, including one in Salem and another in Alliance. Last year the company opened its Kent site and has hired some 100 workers. Management anticipates hiring another 150, maybe more, by the end of the year as demand increases.
"We decided to come here because we wanted to make a statement here that we are very supportive of natural gas," Salazar said. Although alternative-energy initiatives hold great promise, the Interior Secretary noted it's also imperative that the country tap into its vast reserves of natural gas, which he estimates carry an inventory that could supply a century of domestic needs.
"Here, you see the direct connection between the development of natural gas and jobs for the United States," Salazar observed. "We want to make sure we can do it in a safe and responsible way."
In the coming weeks, the secretary said, the Obama administration will propose a set of "common sense rules" that would set higher standards for the oil and gas industry.
Salazar points to President Obama's State of the Union address, during which the president outlined ideas that Interior – which oversees 700 million acres of federally owned mineral deposits -- will help transform into policy.
The first is for energy exploration companies to disclose the types of chemicals they inject below the earth, Salazar said. "If people know, then they won't be afraid," he remarked.
Second is to ensure that these wells are constructed properly and the work is held to high safety standards. "We need to make sure we have well-bore integrity," he noted.
And third, the administration wants to set standards that protect the environment from water contaminated that results from hydraulic fracturing, Salazar said. The fracturing process calls for injecting a mixture of mostly sand and water, along with a smattering of chemicals, into the wells at high pressure to break up tight shale formations and unlock the gas therein.
"We need to make sure that water that flows back is not polluting our streams," Salazar said. "Over the next several weeks, we'll be making some announcements on what these rules will be."
He also emphasized the need to step up exploration to accelerate America's drive toward energy independence. "It's much less expensive than oil,” he said, “so there's a huge future there for a growing demand for natural gas."
MAC's plant here manufactures "frack" trailers, tanks capable of holding 500 barrels, or 21,000 gallons, of water parked at drilling sites. The company also produces smaller tank trailers that transport mostly water to and from these sites. Since the oil and gas boom hit Ohio last year, demand for the company's products has soared.
Michael Conny, president and CEO of MAC, says his company has grown to more than 940 employees and six product lines, most of which are today driven by exploring for natural gas. "Out of the 940 people we employ, about 400 are in oil and gas," he reported.
The plant in Alliance, he reports, manufactures dump trailers that haul sand and limestone used in the construction of drill pads. "They have to put a five-acre site together out of limestone about three-foot thick,” he explained. “All of our customers are hauling that rock."
He says the plant in Salem, which employs 400, builds pneumatic sand tanks used to haul sand used in the hydraulic fracturing process. "We're very busy,” he remarked. “We're booked out a year on sand tanks."
The plant here manufactures two products, a tank that hauls water back and forth from the drilling sites, and frack tanks capable of storing 21,000 gallons of water. "They might put 50 to 100 at the well site,” he said, “bring the water to it, and then they use the water to frack and they haul it away."
Conny says his company will continue to expand and enhance the liquids business at its Kent plant. "Our product line will continue to grow," he reported, noting that MAC will introduce a new crude-oil trailer at the Mid American Truck Show in March.
"The rural areas don't have the pipelines to get rid of the crude oil and they need crude tanks," Conny said. "So, this is our next venture here."
Copyright 2012 The Business Journal, Youngstown, Ohio.