Research in Action: From lab to start-up in 8 months
Nittany Extraction: A Ben Franklin funded company
The Ben Franklin TRESP (Translational Research) funded combined with the BFCNP EIR Program has already yielded a success in the Marcellus Shale space. Professors at the College of Earth and Mineral Sciences at Penn State applied for a grant to develop proppants.
Proppants are introduced into the fractures created by hydraulic fracing to prop them open while the gas is extracted. A variety of materials can be used, included sand, with varying levels of performance. The professors were working on higher performing materials that were available from sources more local to the Marcellus Shale. It is estimated that the Marcellus exploration will increase the demand for proppant materials by 20% to 30% in the coming years. This will quickly exceed present capacity and necessitate the use of new materials from new sources.
There are currently no proppants manufactured in Pennsylvania; however, Pennsylvania is expected to be the largest producer of natural gas via extraction from the Marcellus Shale play. The Marcellus play is the world's second largest natural gas deposit. Industry analysts estimate the (medium-development scenario) annual economic impact on Pennsylvania to be as follows:
2011 2015 2020
Wells 2,019 2,239 2,424
NG output (mmcf) 1,802 4,579 7,161
Value Added ($B) 8.9 10.9 12.5
Employment 98,222 121,816 140,169
Source: Natural Resource Economics, Inc., 7/14/2010
It is estimated that the value of the proppant industry that will be required to support this level of activity to be greater than $500 million per year. Clearly, this represents a significant Pennsylvania manufacturing opportunity.
The unique challenges of the Marcellus Shale also lend themselves to proppants with advanced material properties, like those being developed at PSU.
This TRESP project quickly attracted the attention of the Ben Franklin Entrepreneur-in-Residence of Energy. He was able to form a partnership with the professors to direct the research toward a market goal, attract investment, and form a new company which concerned. Recently, the new company began moving forward with a substantial private investment and capital from the Ben Franklin. The goal is to have viable products available to users in the next two years.
To date the company has been formed, funded by a combination of Ben Franklin Technology Partners Of Central and Northern Pennsylvania and outside investment, licensed the Technology from Penn State and is proceeding in the testing of preproduction materials.