Horseheads Attracts Drilling Support Industries

It takes a village of support industries to get gas from well to market. In our region Chesapeake,  Epsilon and other companies may direct the overall operations, but they outsource much of the work. They hire drilling companies, construction companies, hydraulic fracturing (fracking) companies and others. And those companies, in turn, rely on contractors to supply services including welding, directional drilling, and companies to supply drilling mud, drill bits and pipe.

With increased interest in drilling Marcellus Shale, and the anticipated increase in drilling activity in upstate NY, we're seeing more support industries move into the area. The Center at Horseheads has become a prime location for gas field support service industries, and in the past year Schlumberger and Kayden Industries moved operations into the Center. They join the handful of drilling support companies already located in the industrial park.

Who’s Who at the Center

Gas Field Specialists. They offer a wide range of rental equipment for gas and oilfield operations through their subsidiary GFS Energy Rentals LLC. This includes: power swivels and elevators, welders, backhoes, water pumps and electric generators, frack tanks, dozers, trenchers, storage tanks, mud pumps, and more. Most of their business seems to be in Pennsylvania.

McJunkin Red Man (MRM) Pipe Yard. They provide gas transmission products and have pipes of all sizes and types.

Kayden Industries. They provide centrifuges, tanks, shale bins, floc tanks and pumping stations for the gas field. The facility at Horseheads includes office space and an area to service the centrifuges which are built in Canada and used in local gas drilling operations. These are fairly large centrifuges,  about 16 feet long. The centrifuges separate solid materials from the fluids so that drilling fluids can be re-used, reducing the amount of water required for drilling.

Schlumberger Technology Corporation. They supply equipment and chemicals for companies drilling gas wells. Last year they purchased 88 acres and their building plans include bunkers for explosives as well as storage for chemicals and sand used in fracking. They also maintain a large fleet of trucks used to transport the materials to drillers in New York, Pennsylvania, Ohio and West Virginia.

Newpark Drilling Fluids. On their website they state that they are the fourth largest drilling fluids company in the world. They provide proprietary fluids for drilling, and claim that their water-based drilling fluids are environmentally-friendly and safer and easier to use.

Horseheads Center wooing gas industry

There is also a natural gas well - a Trenton-Black River well drilled by Anschutz that has been capped until a pipeline can connect it to the Millennium Pipeline. According to their website [www.centerathorseheads.com] the Center anticipates more gas wells drilled in the future, and touts that as a selling point as they woo gas field service providers.

“This is a great opportunity for companies involved with natural gas to make use of our buildings,” the Center advertises. With 1.5 million square feet of space available for lease and three buildings for sale, and situated in the center of natural gas activities, the Center could become a prime location for industries that service oil and gas fields.

In addition to the location, the Center advertises rail service to each building, easy access to major highways, and “low cost utilities and labor”.

"But," says Helen Slottje, senior attorney with the Community Environmental Defense Council in Ithaca, "if we are looking for economic prosperity, do we really want to push the idea of low cost labor?” According to press reports, the Chemung County Industrial Development Agency negotiated a 50-percent property tax abatement with Kayden, as well as a mortgage tax exemption and sales tax relief on construction materials purchased for the project. 

“These seem to be standard incentives to coax companies into locating at Horseheads Center,” Slottje said. “But those tax incentives do not address the impact of new businesses on the local tax-supported services.”

In addition to the increased tax burden on the residents, who will be underwriting road maintenance, utilities and other services for the businesses lured to Horseheads, there could be an additional environmental burden.

“There are a number of sensitive environmental receptors in the area,” Slottje said. These include an elementary school to the north, wetlands located south of the Center, a neighborhood day care center and the recreational facilities at the Holding Point. Local residents have repeatedly expressed concern about water contamination, air quality and the amount of truck traffic generated by the gas field services industries at the Center.