The Faces of 90.5 WESA
Economy & Business
Mon August 25, 2014
Pittsburgh Airport to Start Fracking with Hopes to Offset Financial Woes
Bob Mrvos jokes you could golf in the corridors of The Pittsburgh International Airport Terminal – it's just so empty.
"My wife and I were on vacation and flew into LAX and stayed there for a couple weeks and we came back through Chicago," he said. "You walk through those airports and you can barely get through the hallway there’s so many people. And when you land in Pittsburgh, it's like the airports closed."
But the airport isn’t closed — it's open. Now retired, Mrvos works at the Airmall’s PGA Tour Shop part time. He remembers the airport when it was a hub for US Airways.
"At that period of time I was working in a steel mill and I traveled almost weekly," he said. "The airport was packed at that period of time."
When Pittsburgh International Airport opened in 1992, it was built to be a hub for US Airways, then US Air. Allegheny County Executive Rich Fitzgerald says it was constructed with extreme optimism — for 30 million passengers a year.
"They basically designed the airport," Fitzgerald said. "We built it for them. And we built it for them and entered into a long-term lease that they were going to use it as their hub."
At its peak, 20 million passengers were passing through annually. But with US Airways pulling out as a hub, along with the Sept. 11 terror attacks, airline mergers, rising fuel costs and the recession, the annual number of passengers has dropped to eight million. And when US Airways left, the per-flight cost went up for the other airlines, making the airport less attractive to them.
And that’s left $12 million of Pennsylvania gambling revenue going toward airport debt.
Fitzgerald said airports should be self-sufficient.
"Airports by and large are set up to not make money but not lose money," he said. "They are set up so you can't take money that would be excess revenue if you will out of the airport and use it for other governmental operations, but you shouldn’t have to put outside money, tax money into the airport to subsidize it."
One way the Airport has made money is through its Airmall. Although there are fewer flights coming in and out of Pittsburgh, nearly all of them are flights that originate or end here, and there are more of those now than ever before.
Jay Kruisselbrink, the vice president of Airmall USA, said that while the mall isn’t open to the general public the way it was before Sept. 11, 2001, passengers have to get to the airport earlier — giving them more time to wander the mall and spend money. Which is good for the Airmall and good for the airport.
"If we do more in sales we pay them more rent, it’s a percentage in sales we pay, a percentage of rent we pay to the airport," he said.
Fitzgerald said the county originally purchased the land to develop it for business. Earlier this month, the state invested $7 million toward brownfield remediation.
"The airport was not nine thousand acres of pristine land," he said. "This was land that had had a lot of coal mining that had occurred over the years, and the coal mines in many cases were abandoned."
They hope to eventually develop the land into office and research space and a hotel and convention center.
The money they will use to do that? It’ll come from fracking the Marcellus Shale which sits on those acres, including deep beneath the runways.
Pittsburgh International Airport isn’t alone in its financial woes. With the airline industry in turmoil and as fuel prices rise, airports across the country have had to find creative ways to generate revenue. In Dallas-Ft. Worth, they’ve been extracting natural gas. San Francisco installed solar panels and generates energy. The largest blueberry producer in Georgia is at an airport. And some airports have explored water or grazing rights.
The county hopes to make $500 million from natural gas in the next 20 years, an estimate that comes from lease holder Consol Energy. Fitzgerald feels confident in those numbers – and says, yes revenue could be less. But it could also be more.
"What we’re hoping, by lowering the cost using some of the shale money we will be able to attract the flights and start to stabilize those revenues," he said.
On Monday, Fitzgerald and Gov. Tom Corbett will take part in the ceremonial groundbreaking at the airport.
Consol Energy plans to construct six pads and drill 47 wells.