2015 ECONOMIC FORUM

The Times Tribune
March 15, 2015

Linde Corporation’s, Scott Linde,  took part in a panel discussion that touched on Diversity in business, Regionalization, and  Marcellus Shale. Northeast Pennsylvania business and community leaders had plenty of ideas of what big dreams the region should pursue during the annual Times-Tribune Economic Forum on Jan. 28.

•Throughout the conversation, panelists kept returning to the topic of shale gas, both the economic benefit and the environmental costs of it. While Lackawanna County has not seen the significant increase in business from the natural gas industry that its neighboring rural counties have, economic leaders now see opportunity in wooing business interested in proximity to an abundant source of natural gas, such as power plants.

• Below, you will find an edited transcript of the forum. For more from the Times Tribune on this subject, go to

http://thetimes-tribune.com/news/business/2015-economic-forum-sidebar-government-programs-1.1846433

 

 

MODERATOR: GEORGE V. LYNETT JR.: What big idea should we as a community be focused on to improve Northeast Pennsylvania’s economy?

SCOTT LINDE: We’re in construction. We adapt to whatever is necessary for the moment to put people to work. I think everybody should be a lawyer or a doctor when I look at my bills, because that seems to be the only thing that really pays well.

But, right now, our companies have gone through the flood, and we went for eight or nine years, and then we went to the Clean Water Act and we put in sewers and created jobs, two, three hundred jobs or more, and then the big box era.

But then in 2008 something came to this area. It didn’t come right here, but north, that is our really only focus now, and that is this shale gas. And it’s — if you haven’t been up in Montrose on a Sunday, take a ride up. You just see activity that you’ll never see anywhere around here. …

Get to know them. Get to see what they’re really doing up there. We work with the Corps of Engineers, all public sectors. No one has a safety record, no one has the commitment to quality that these people have.

And you can beat them up, but they’ll walk.

You’ve got to see the permanence that these people are putting in up there. We thought it was going to come down here (to Luzerne County). We worked with Encana out there on Route 118. They drilled the well at 10 at night. They called us and said close it up, get out of there. They left millions of dollars. They just walked away. It’s not like the public sector.

They need your attention, and they also need — and I’d say with this paper, they need a little more fair coverage for what they get. I know it sells papers to have Vera Scroggins screaming that everything is bad, but it’s not that bad.

It’s not like coal. My grandfather died of emphysema. I watched him cough to death.

I encourage everyone to maybe open up their viewpoint (to the natural gas industry’s). It’s not coal. I’ve been in both. It’s not coal. And it’s a great opportunity.

DR. THOMAS-HEMAK: I have to say, I went up there recently to Montrose, and I have a great story about it.

We had an experience where the Wright Center got a tremendous amount of federal resources to expand workforce production. So we got $57 million for doctors and to immerse them in an under-served area to begin to address health disparities and the maldistribution of physicians.

We were so excited. And when we when first got in there, which was before this whole explosion of economic activity, it was extremely challenging. There were no physicians willing to work in the community.

It was a phenomenal needs-driven learning experience. But there was a void of anybody wanting to take the reins and go and live there. So we had to shut down the learning environment. It was extremely traumatic.

But what ended up happening is all of the economic activity in Cabot’s investment up there drew one of our leadership team to go be the executive director of the clinic. And this was now several years later that I went to visit her last week. She’s in the middle of renovating a building that used to be the tannery in the center of Montrose with major industrial commitment to support bringing in nonprofit communities for the health of the community. And I had the great privilege of driving by but did not tour the brand new critical access hospital completely funded by Cabot.

MR. LINDE: A hundred thousand from us.

DR. THOMAS-HEMAK: You, too. But it’s really important, because we just tore down Mid-Valley Hospital. It needed to be torn down, it wasn’t preservable, but they closed the hospital. And there they are in Montrose opening a critical access hospital. It’s absolutely state-of-the-art and beautiful. So I think it is an opportunity for the overlapping of the health industry with the shale.

MR. LINDE: They’re there. They just need to be worked with.

DR. THOMAS-HEMAK: And our research on it should support their work.

MR. LINDE: I know I don’t share everyone’s viewpoint on it, but we really think everyone should take the time, if you’re really looking for economic development, of private sector money. It’s a shame it didn’t come here ( Lackawanna/Luzerne counties).

MR. LYNETT: I’m surprised it took to John to get to government. I’m surprised it took all the way to Scott to talk about the newspaper. Shale is a very important part of our future. And it’s sort of amazing, we talked — a lot of people have touched on the history of the area and how we developed. We tried to correct things from our history. We tried to take advantage of the good things in our history. When you think of the area that fueled the industrial revolution is now getting back into the newest fuel. And it is a cleaner fuel. And we all want it to develop. We just want it to develop correctly. And I that’s how I think we’re going.Creating jobs

MR. LYNETT: The unemployment rate for the Scranton/Wilkes-Barre metro is falling. We’re now at 6 percent. But for the 56th consecutive month in November, we had the highest metro unemployment in the state. According to the Milken Institute, we are 195th out of 200 metros nationwide for job growth between 2013 and 2014. And it’s interesting, if anybody had a chance to look at that, the No. 1 and No. 3 small metros are Fargo and
Victoria, Texas. And a lot of the discussion on why they’re there is because they’re shale communities. How can we do better? I’m going to ask Dr. Ghosh to kick this off.

DR. GHOSH: Six percent unemployment rate is good, compared to November 2013. Even when the rest of the country was coming out of the great recession, we were standing around at 8.5 percent unemployment rate. So compared to that, in one year it’s a great achievement. However, we spend too much time to think that if there are 14 metro areas, that we had the highest unemployment rate. The relative ranking perhaps is not that important.

The way I see it, that if I have a class of 14 students, all are getting A’s, that’s great. Now, if we — if I have to rank them, someone would be at the bottom of the class. But still if the person is getting an A, that’s great.

So given that 6 percent unemployment rate that we are having, and that is the highest in the 14 metro areas that we have, superficially we should be happy about it. But the reason we cannot be is much of this reduction in unemployment rate is not coming because of job creation. It is coming because of the shrinkage of the labor force. We are not doing well. Historically, we might be able to see that where we did well. The education sector, the health care sector, they have been the solid pillars of job creation or maintenance of jobs. And that remains to be perhaps what we will see here. Here comes the importance of the energy sector, the natural resource industry. The natural resource industry, and you talked about Texas or North Dakota, natural resource industry, the growth due to that is no way comparable to what they have done in Texas or North Dakota.

The natural resource industry has not been transformative yet in this part. To look at with all the spill overs, not just the direct employment, direct income that are generated by the natural resource industry here, it is barely accounting for 1 percent of the state production in income. Employment-wise, natural resource sector has provided a lot of jobs, but still employment-wise it is lagging a whole lot behind what they have done in Texas or North Dakota, once again.

Don’t get me wrong, natural resource sector will play a very, very important role. But the thing is that if we put it in perspective, then we don’t see that why in the long run they might be the engine growth in this sector, we don’t see that happening.

MS. OOMS: Well, I agree with Dr. Ghosh. We look at the statistics, but then we take apart the statistics and find out what builds in it. So the labor force is shrinking. It is a false positive that the unemployment rate is down. We are not creating jobs. And this relates to back to question one. What do we need to do?

I use the term everybody needs to think: economic development. Because my definition of economic development is the glitzy side, the business attraction. But it’s also the business creation, growing from within, that entrepreneurial culture. It’s business retention. Knowing who’s here, knowing why they’re here, knowing what their challenges and opportunities are, and then efforts to keep them here.

MR. COGNETTI: What Scott (Linde)  said is very important. Natural gas is here. We have to be able to use it. One of my former assignments that I was involved in was Penn’s Northeast. And we saw or tried to figure out, of course, with a lot of things on our plate, is how do you connect the natural gas into our industrial parks and into the region. That’s how you build an industrial park, a new one or an existing one, is natural gas at a low price, which is what we’re all talking about to attract the industries, the different kind of industries. So that connecting the dots is very, very important.

MS. DEMPSEY: I think private investment and hiring are suppressed by economic and political uncertainty. And uncertainty can be something as simple as constant talk of tax increases or actual tax increases, which I think we’ve seen in the city. We need to attract businesses and development and jobs, and we need to remove barriers of entry and make that easy.

And lack of leadership. You know, I was reading — I was reading The Times-Tribune. They were covering the Scranton Council meeting. And the mayor — just to quote from it, it said, according to The Times-Tribune, “the mayor’s July recovery plan by consultant Henry Amoroso said the status quo is unsustainable and called for union concessions but the budget does not contain the bold and tough decisions that are necessary for financial stability, according to Mr. Gaughan.”

I think we need strong leadership to make these bold and tough decisions moving forward. And I want to go back to one more time that I believe strongly we need to attract the right kind of jobs here, and that also we need to encourage our entrepreneurs.

MR. LYNETT: Thank you, Michele. Scott?

MR. LINDE: I can see what my job should be is trying to bring the facts and the truth to people like Michele that have real concerns about an industry that I really think when we do get the truth out you’re not going to be nearly as worried about. And things like saying that the (drilling) cuttings are going into the landfill. Well, everywhere else when you drill a water well, you leave the cuttings right there. They’ve just
been scrutinized and regulated to the point where they have to take them to the landfill.

And I really hope that the paper — and I hope you do come up with something that’s bad, because these people will change it if you do. But you’ve got to really get down and take a look at the facts of what the pollution is.

I hate to use the term, but the one fellow said fracking is something that you used to think that two consenting adults did. It’s just a really bad term that people have
beat up. And I look forward to the industry now that’s opening up and will share that information. And if you have real concerns, you really have to dig into it and show us just what they’re doing wrong and where this stuff is bad, because we don’t see it and we’re working in it.

MR. LYNETT: Let’s not get into a debate on that.

MS. DEMPSEY: I think I can go down a whole road with that.

MR. LYNETT: We can have a whole forum on that.

MR. LINDE: I just look forward to the point where I don’t think that’s a problem, and that’s where a huge amount of jobs — when you talk about jobs and numbers, it’s one thing to have $30,000 jobs in the distribution center that you have to have three jobs for.

When you go up north and you get into the industry, they’re $75,000 to $100,000 jobs for much the same work. Sometimes it’s easier.

DR. GHOSH: There may be $75,000 jobs that are being created in the industry. When I look at the data, I look at — and the way unemployment rate is calculated is not how many $75,000 jobs are being created, it’s how many jobs are created. So in that sense the job growth has not been where perhaps it should have been.

Nobody would argue that if you can have lot of skill based jobs, the knowledge based jobs that will pay premium in terms of wages, that’s terrific. And that definitely would drive up the income of the region, no question about it, and we are all for it.

The trouble is still, if you look at the personal income, our income base is not really very high in spite of all the job growth and perhaps largely being contributed by
your industry.

If we are thinking of the region as a whole, then the region is still lagging in terms of the job creation. The region is still lacking in terms of the income creation.
The median income is low. So we need to be aware of that reality. If you think that I am overly critical of your industry, I’m not. All I am pointing out is when looking at the data, what the data is, what is it telling us, and how, perhaps, to put it in proper
perspective, that’s why.

MR. LINDE: I studied economics in school. I really question your data. I know that a lot of it comes from the sources that are probably several years behind. I know that you’re coming off of — and the data that you’re using I don’t think takes into effect the huge amount of jobs that people come from outside to do that are waiting for the local people to take over because it’s cheaper.

When we started up there everybody had Texas license plates. Now every chance they get they’re going to take someone that you train and they’re going to switch or those people are going to move here. I really think your data is behind, and I think in a couple years it will catch up to see what’s really happening up there.

DR. GHOSH: To the best of my knowledge, the job-related data are provided by the Bureau of Labor & Statistics. I looked up the recent data which is actually December 2014. So, yes, I am off, I am off by one month.

MR. LINDE: I question that.

MR. LYNETT: Scott, anything else on question No. 2?

MR. LINDE: No, that’s it.

MR. LYNETT: We’re going to do a quick attempt at question No. 3. What’s your big dream that motivates you in life and business?

MR. LINDE: I’ve always had somewhat of an easy goal, or not an easy goal, but something that I could see, and it’s done a little bit from flying over. My goal has been always to clean up the surface damage done to our strip mining in the last 20 years of coal mining. And I think it can be done relatively easily, because pushing a hole back in is easy compared to digging it back out. And to clean the water. I know I worked with some other things. I’d like the valley to, when you fly up and down it, not to see those areas. I think that it’s cost effective, easy to do, and that’s just the only goal I have.

MR. LYNETT: Thank you. I’ll say it’s just one part of my dream that this newspaper can help support your dreams, and through its reporting and forums like this positively affect the outcomes and positively affect our region.