We have all seen the headlines declaring the Marcellus a “bust” – but those are headlines from the newspapers and media outlets who have long been opposed to developing this clean burning, abundant, low cost American resource. Those who truly understand the dynamics of the oil and gas industry understand this is just a slowdown. This slowdown however is deeper than anyone anticipated – but it is just that, a slowdown. Due to the over success of the industry and the innovative entrepreneurial spirit that America is built on, we as a nation are producing more natural gas and oil than anywhere else in the world. As a business owner, while you are benefiting from lower costs of doing business, you have invested heavily in the success of the industry. But, as capital budgets are being slashed, rigs are at an all time low, onerous regulations and taxes are moving forward, you ask yourself how can you continue to benefit from this economic engine?

First, we need to look at the positive. Headlines stating that a company slashed their capex budget by 58% sell newspapers. Headlines that say a company is investing $225 million in Pennsylvania are not sexy. Think of this. Between Range Resources, Chesapeake Energy and Cabot Oil & Gas their Marcellus projected budgets are nearly $800 million. These are 3 of the top producers – all said, there is several billion dollars in upstream activity expected for the Marcellus in 2016. There are abundant opportunities, you just have to work a little harder for them.

When will the industry rebound? That is the sixty-four thousand dollar question. It is a safe bet we won’t see much uptick in 2016 or most likely 2017, but rest assured, it will rebound. This resource will be developed and as outlets for the gas open up, utilization increases locally, there will be a need to increase the drilling activity.

What should businesses being doing now to capitalize when things pick up?

  • Diversify. First step is make sure your business is in order. As the industry grew exponentially, many businesses invested their resources into growing that segment of their business. Look to diversify your client and product/service base. If you were around prior to the industry growth in PA, look to your previous industry segments and work on growing those areas. If your business started as a result of the boom, look to find complementary industries or market areas for your offerings. Developing a sound business and marketing plan will help you succeed.
  • Advocate. We all have learned through tough times who our true friends really are. The industry is going through tough times now economically and politically. Understand the issues. Truly understand them. Learn why the industry is working for fair regulations. Despite the rhetoric, the industry is not opposed to regulations, but let’s make sure they make sense and truly have an environmental benefit. For example, does having an additional permit in place for an already regulated activity benefit the environment? I would argue it has a negative impact just from the paper that is involved. Consider joining one of the trade groups or at least their outreach components. The Marcellus Shale Coalition has Shale Advocates, API has Energy Nation and PIOGA has the Keystone Energy Forum. Get involved and ask the companies you did work for how you can help. Sign up to these groups and help move this industry forward.
  • Educate. You may have entered the industry with one specific product or service offering. Understand the rest of the supply chain so you can see where you may have a fit. There are many complimentary products or services you might be able to offer. Take this slow down to learn about the entire supply chain within the industry – upstream, midstream to downstream.

This industry is still a huge economic driver within the Commonwealth. As long as the free markets are able to work, it will be around for decades to come providing countless jobs, business opportunities, better communities and energy independence for the nation. If you are experiencing a slowdown in business – don’t throw the towel in, this is the time to stick together, innovate and come out of this slowdown stronger and better than ever.