WELLSBORO - The rail terminal at the junction with routes 660 and 287 will be expanded thanks to a $1.6 million state grant to D & I Silica, LLC, based in Sheffield.
Arthur Stewart, managing member and co-founder of the company, which provides a special silicone sand used in hydrofracturing natural gas wells in the Marcellus Shale industry, said the money will be used for a little over a mile of additional track to the company's existing 4,000 feet of track.
Stewart said the additional track is needed to have product for the silos at the site staged "on hand" rather than in Corning, N.Y.
"We are anticipating where we think the (natural gas) business is going in the future," he said. "We have seen the wild swings from the beginning (when) the price of gas was higher and now we have seen a slowdown.
"We are (looking) ahead to when the business levels out," he added. "It has always been cyclical. It will settle down, so whether a year from now or three years from now, that is what we are looking ahead to."
Construction is anticipated to begin next summer, but that depends on what happens with the market," Stewart said.
"The Marcellus is widely regarded as the shale play with the best economics but even at that, the current price of natural gas is at the break-even point for the drilling companies and that is not really the environment anyone wants to operate in. It has to come back up," he said.
Another factor is gas storage figures, Stewart said.
"At one point last year, because of the warm winter, it left us with 57-percent more gas in storage than normal," he said. "We have to get rid of that and that is coming down, but it will depend a lot on what the weather does this winter," he added.
New Environmental Protection Agency regulations that take effect in January will impact D&I's customers, Stewart said, "imposing greater costs and with those, then the picture of when the well is economic worsens (and) we will be depressed in terms of the number of wells being started until gas prices rise even further to account for these additional costs."
Stewart said the grant money was "made possible by the efforts of state representatives Matt Baker and Joe Scarnati."
"They were instrumental in helping this come to fruition." he said. "It is not the only time we have received a grant and I think the program's purpose - to preserve our roads by seeing more traffic put to rail - goes hand in hand with creating more jobs."
"We have a half dozen folks employed at Wellsboro that were not there three years ago and the railroad has similar statistics" he added.
The grant is one of four that were recently awarded to upgrade rail infrastructure in the 25th senatorial district and repair rail lines. They were approved by the state Transportation Commission, which evaluates and assesses the resources needed to maintain and expand Pennsylvania?s transportation system.
Authorized by the General Assembly, the grants are administered by the state Department of Transportation's Bureau of Rail Freight, Ports and Waterways.
It is a portion of nearly $18.6 million of infrastructure investment that will be distributed though the Capital Budget/Transportation Assistance Program.
The 15-member commission includes the Secretary of Transportation, 10 private citizens appointed by the governor, and the majority and minority chairs of the State Senate and House Transportation Committees.