Ask Phil Skarada about the natural gas boom in his northern Pennsylvania territory and he’s quick with a quip: “The Beverly Hillbillies haven’t happened yet.”
Skarada’s response reflects the difference for dealers here in the Marcellus Shale region from New York to Ohio compared with what it’s like for LBM companies in oil-rich North Dakota and Montana. Out west, dealers from as far as 600 miles away are sending in trucks to meet oil patch demand for construction materials. (See “Boom,” May 2012.) But in the 96,000 square miles of gas fields that make up the Marcellus, the effect is much more local and more limited, even if dealers have generally been more creative.
Both 84 Lumber and Lezzer Lumber created energy specialty divisions to serve companies drilling in the region. Meanwhile, Skarada’s Altoona, Pa.-based Your Building Centers (YBC) has sold lumber and supplies to companies building guard shacks and storage sheds for gas companies. He also rents out space at his manufacturing facility to some of those subcontractors, and YBC has made panels and framed four to five new motels each year for several years.
Skarada’s brothers are involved in the energy industry and often pass along industry reports. “I can tell you that it’s not going as well as everybody thought they might do,” he says, including both gas companies and building material suppliers in that review. This is in part because the price of natural gas, unlike that of North Dakota’s oil, has dropped exponentially since drilling began and some of the gas companies are having trouble breaking even.
Eighty Four, Pa.-based 84 Lumber’s foray into the energy supply industry dates back to September 2010, when the Marcellus Shale Coalition, a group working to promote Marcellus Shale gas, held its inaugural meeting at Nemacolin Woodlands Resort, which is owned by 84 Lumber founder Joe Hardy.
The national dealer thought it was a great opportunity to reach out to those at the meeting and show them it could provide the supplies they needed.
“Talking to them, even though a lot of them were out-of-state, they all wanted to do business with local companies,” says Mitch Feldman, 84 Energy Supply’s director.
Launched in April 2011, 84 Energy consists primarily of a website. Feldman says customers contact his sales staff through the site and products are shipped out via one of the 75 locations 84 Lumber has in the Marcellus Shale area.
“It was a natural fit for us because a lot of our stores are rail served, so we started bringing in a lot of products that are being sold to the natural gas industry,” Feldman says. Those products include pit liners, crane mats, and fire-rated clothing. Sales have grown five-fold since last year, Feldman says.
Curwensville, Pa.-based Lezzer Lumber also started a subsidiary dedicated to the energy business, called Lezzer Energy. Its website promotes such specialized products as hardwood rig and swamp mats, berming, site containment material, safety gear, and pit and pond liners, along with traditional LBM goods like pole buildings, lumber, storage sheds, and guard shacks. Lezzer officials declined to talk to ProSales about their work, saying they didn’t want to reveal useful information to competitors.
Your Building Centers has no plans to begin carrying products specific to energy industries. Skarada says the companies doing the drilling tend to move throughout the region, making it difficult to follow and serve them.
