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OT: Fracking saved Pittsburgh airport

The Spin Meister

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An altered state
“Fracking” Saves Pittsburgh Airport. Natural gas development enabled Pittsburgh International Airport to expand flights and plan a $1.1 billion renovation, Allegheny County Executive Rich Fitzgerald, a Pittsburgh Democrat, said during a recent interview with the Pittsburgh Business Times. In 2013, the airport authority partnered with Consol Energy – now CNX Resources – to develop natural gas under the airport’s 9,000 acres with an agreement that included a $46 million upfront payment.

As the Business Times reports, that long-term partnership has already resulted in a positive difference for our region:

Without the Consol deal, which included a $46 million upfront payment with the expectation that an additional $20 million would be generated annually, Pittsburgh International Airport was unlikely to have experienced its recent expansion in new daily flights, which Fitzgerald said have grown from a nadir of around 37 a day a few years ago to more than 70 now as the airport has been able to reduce gate fees to airlines due to the gas revenue.

“If we had not done the gas royalty deal with Consol, we would’ve defaulted on our bonding,” said Fitzgerald of Pittsburgh International Airport. “It’s really made us a much better, more attractive place to do business.”

Now, instead of being in default, Pittsburgh International Airport is pursuing a $1.1 billion repositioning and modernization plan that will completely reconfigure its operation, and the county expects revenue from the Consol deal will help generate the financing to pay for it.
 
Last year when I went through there it wa a ghost town. Nice facilities but see no reason to upgrade - 50% or more of the gates are unused.
 
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If there was a risk of default, its because of their horrendous deal with USAir.

And I also question whether they need to invest $1.1B in that airport.
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USAir screwed them by shutting down hub....and then going belly up.

The airport has a land side and an air side that are connected by a train/trolly system. The plans are to demolish one, IIRC airside, and build new attached so that no train transport will be needed. There will be fewer gates when completed.
 
If there was a risk of default, its because of their horrendous deal with USAir.

And I also question whether they need to invest $1.1B in that airport.
US Air took Allegheny County to the cleaners. Steven Wolf and Rakesh Gangwal ran US Air into the ground and out of existence, and while they were at it, strong-armed the County into the massive overbuild at Greater Pitt.

We got a major hub, a heavy maintenance facility, and a flight control facility, all of which were great while it lasted. Now, we got bupkis.

PIT is a fantastic airport. Tremendous capacity, all-weather runways (there is no such thing as a weather delay at PIT) - everything except passengers. When we lost the hub, we wound up with a white elephant.

The 'new' airport is coming up on 30 years old now and I'm sure it needs a facelift. But some of the ideas being tossed around are absurd. And for $1.1B, that's a lot of cash to be directed into somebody's pocket. That's enough to get Mark Dambly sniffing around if we're not careful.
 
US Air took Allegheny County to the cleaners. Steven Wolf and Rakesh Gangwal ran US Air into the ground and out of existence, and while they were at it, strong-armed the County into the massive overbuild at Greater Pitt.

We got a major hub, a heavy maintenance facility, and a flight control facility, all of which were great while it lasted. Now, we got bupkis.

PIT is a fantastic airport. Tremendous capacity, all-weather runways (there is no such thing as a weather delay at PIT) - everything except passengers. When we lost the hub, we wound up with a white elephant.

The 'new' airport is coming up on 30 years old now and I'm sure it needs a facelift. But some of the ideas being tossed around are absurd. And for $1.1B, that's a lot of cash to be directed into somebody's pocket. That's enough to get Mark Dambly sniffing around if we're not careful.

$1.1bn on an airport that services 70 flights a day? WTF!
 
“Fracking” Saves Pittsburgh Airport. Natural gas development enabled Pittsburgh International Airport to expand flights and plan a $1.1 billion renovation, Allegheny County Executive Rich Fitzgerald, a Pittsburgh Democrat, said during a recent interview with the Pittsburgh Business Times. In 2013, the airport authority partnered with Consol Energy – now CNX Resources – to develop natural gas under the airport’s 9,000 acres with an agreement that included a $46 million upfront payment.

As the Business Times reports, that long-term partnership has already resulted in a positive difference for our region:

Without the Consol deal, which included a $46 million upfront payment with the expectation that an additional $20 million would be generated annually, Pittsburgh International Airport was unlikely to have experienced its recent expansion in new daily flights, which Fitzgerald said have grown from a nadir of around 37 a day a few years ago to more than 70 now as the airport has been able to reduce gate fees to airlines due to the gas revenue.

“If we had not done the gas royalty deal with Consol, we would’ve defaulted on our bonding,” said Fitzgerald of Pittsburgh International Airport. “It’s really made us a much better, more attractive place to do business.”

Now, instead of being in default, Pittsburgh International Airport is pursuing a $1.1 billion repositioning and modernization plan that will completely reconfigure its operation, and the county expects revenue from the Consol deal will help generate the financing to pay for it.

Will it really generate $20mm per year? It says that’s the expectation - how realistic/sustainable is that?
 
Will it really generate $20mm per year? It says that’s the expectation - how realistic/sustainable is that?
The airport is pulling down an 18% royalty which is pretty darn good. CONSOL has the rights on a 20-year lease. It's really good gas containing lots of valuable natural gas liquids in addition to the methane. $20MM for 20 years, AFAIK, is reasonable.
 
US Air took Allegheny County to the cleaners. Steven Wolf and Rakesh Gangwal ran US Air into the ground and out of existence, and while they were at it, strong-armed the County into the massive overbuild at Greater Pitt.

We got a major hub, a heavy maintenance facility, and a flight control facility, all of which were great while it lasted. Now, we got bupkis.

PIT is a fantastic airport. Tremendous capacity, all-weather runways (there is no such thing as a weather delay at PIT) - everything except passengers. When we lost the hub, we wound up with a white elephant.

The 'new' airport is coming up on 30 years old now and I'm sure it needs a facelift. But some of the ideas being tossed around are absurd. And for $1.1B, that's a lot of cash to be directed into somebody's pocket. That's enough to get Mark Dambly sniffing around if we're not careful.
The potential of that airport is/was one of pits greatest assets in the amazon bidding.

But the rest of your transport infrastructure...oy.
 
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I love the airport, except the dumb train ride. Yes it is hardly ever busy, but boy is it super easy to get in and super easy to get out. Get there 1 hour before my flight takes off.
 
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The airport is pulling down an 18% royalty which is pretty darn good. CONSOL has the rights on a 20-year lease. It's really good gas containing lots of valuable natural gas liquids in addition to the methane. $20MM for 20 years, AFAIK, is reasonable.
It is only a few miles from the Shell Ethylene Cracker plant that is currently under construction. There will be demand for the Natural Gas Liquids (NGL's) that are part of the production from underneath the ground there for a long time from the Cracker plant.

It is a shame what happened with USAir because our terminal was a rare example of our local politicians "thinking big" and they built a first class facility. The 9/11 attacks hastened the demise of our wonderful hub airport, but it was probably inevitable. Thank goodness for our hydrocarbon wealth and a local facility to consume it. Here is a rendition of this massive Shell complex...
shell-cracker-plant.jpg
 
After USAIR left PIT it really turned into a ghost town. But I do remember RT for $80 from PHL. Cheaper than driving.
It has picked up some in the last couple of years or so. About those cheap RT's, mostly gone now. Once Jet Blue pulled its NYC route, the cost to there skyrocketed.
 
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Pretty sure he meant to say nonstop flights, not total flights.

Insofar as Amazon2 is concerned, I'd hate to see that happen, so I will be very pleased when some other city gets stuck with that albatross. Whoever gets that "win" will rue the day.

Isn't every flight a "non-stop" flight?

According to their web site, there are 74 destination cities. In other words, you can go strait there from PIT. However, they report that they served just under 9 million passengers in 2017. That is about 24,657 per day.

PIT is not unlike CLE and Cincy who also lost hubs in the last ten years due to mergers. (Delta and Continental respectively). CLE, for example, built an entire concourse for United that is completely unused (Concourse D). I am told that United wanted CLE to let them out of their contract but CLE refused. When the GOP convention was in town, United was approached about opening the concourse for the additional traffic. United refused unless they were let out of their contract....so the place remains a ghost town.
 
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Pretty sure he meant to say nonstop flights, not total flights.

Insofar as Amazon2 is concerned, I'd hate to see that happen, so I will be very pleased when some other city gets stuck with that albatross. Whoever gets that "win" will rue the day.

What's your concern? Traffic?
 
What's your concern? Traffic?

Property values. Tax breaks for benefits that turn out to be nonexistent. Traffic, but to a lesser degree.

Amazon wants a billion dollars in tax breaks, and claims they will bring 50,000 high paying jobs. Yet, they are working to automate their workforce as much as possible with drone delivery, automated warehouses, etc. There is NO WAY they are going to provide 50,000 jobs, at least not in the long term or the near term.

Why should any governmental entity give the richest guy on the planet license to pay less taxes? Makes no sense to me. I know for a fact that for every break in taxes Amazon gets in PA, I am going to help pay for that.

I don't blame Amazon. If people tried to give me money, I would take it, as well.
 
Property values. Tax breaks for benefits that turn out to be nonexistent. Traffic, but to a lesser degree.

Amazon wants a billion dollars in tax breaks, and claims they will bring 50,000 high paying jobs. Yet, they are working to automate their workforce as much as possible with drone delivery, automated warehouses, etc. There is NO WAY they are going to provide 50,000 jobs, at least not in the long term or the near term.

Why should any governmental entity give the richest guy on the planet license to pay less taxes? Makes no sense to me. I know for a fact that for every break in taxes Amazon gets in PA, I am going to help pay for that.

I don't blame Amazon. If people tried to give me money, I would take it, as well.

The jobs they're automating are not the types of jobs associated with HQ2. It's not a fulfillment warehouse...

I have no doubt that bringing HQ2 to a city like Pittsburgh or Columbus would have a dramatically positive influence on the economy of the city. I understand folks who hate what it would do to their infrastructure, but not recognizing the economic benefit is hard for me to imagine.
 
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Maybe they're just preparing for the Amazon HQ2.
Everything Pittsburgh does is half assed. Heinz field is a joke. They spend money they don’t have, make the taxpayers foot the bill and then spend more to improve what they built!!! It’s a city but it’s not a Major city like they think it is.
 
Will it really generate $20mm per year? It says that’s the expectation - how realistic/sustainable is that?

Seems reasonable. There's no reason not to expect $1M/year in royalties per well in the early years depending on the amounts of liquids produced. As for sustainable, depends how you define it. Sustainable for 20-30 years, yes. Beyond that, it'll level off at a significantly lower number.

With 9,000 contiguous acres, they can drill ~13 drilling units with 50+ wells. Assuming the 20 year term on the lease is accurate, they'll certainly stagger the drilling and bringing them on-line. While the wells generally go nuts the first 2-3 years before leveling off, by staggering them they should be able to have a stable revenue for a few decades. I would imagine they'll also drill the last few at the very end, cap them, obtain regulatory inactive status and delay production outside the term of the lease for another 5-6 years on those if they'd like (while paying a shut-in royalty at the time, depending on the language of the lease).
 
Everything Pittsburgh does is half assed. Heinz field is a joke. They spend money they don’t have, make the taxpayers foot the bill and then spend more to improve what they built!!! It’s a city but it’s not a Major city like they think it is.

Its the 26th largest metro area in the country. Define "major" city. If you want to define that so narrowly as to include only NY, Chi, LA, ATL, DAL, HOU, WAS, then sure. But I think that's a dumb definition, and I dont think anybody in Pittsburgh pretends they're that. I'll also argue all day that the average daily life of a person in any of those cities is nearly identical to a similar person in Pittsburgh, Cincinnati, Cleveland, Columbus, etc, so I never get the big deal made of the difference, other than trying to feel more important and better about whatever city you're in.
 
Property values. Tax breaks for benefits that turn out to be nonexistent. Traffic, but to a lesser degree.

Amazon wants a billion dollars in tax breaks, and claims they will bring 50,000 high paying jobs. Yet, they are working to automate their workforce as much as possible with drone delivery, automated warehouses, etc. There is NO WAY they are going to provide 50,000 jobs, at least not in the long term or the near term.

Why should any governmental entity give the richest guy on the planet license to pay less taxes? Makes no sense to me. I know for a fact that for every break in taxes Amazon gets in PA, I am going to help pay for that.

I don't blame Amazon. If people tried to give me money, I would take it, as well.

This is my position. 50,000 high paying jobs means 50,000 people paying taxes, buying goods, buying homes, etc... By the same token, the politicians spending $ have contributed to the current fiscal situation of this state. So why should we forego the benefits of a large employer coming in to the state merely because the whores in Harrisburg (and Allegheny County, and any other government entity involved) want more money?
 
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