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While New York puts the brakes on shale gas development, the natural gas boom from all the drilling that’s going on in Pennsylvania is transforming National Fuel Gas Co.

And that’s just fine with Ronald J. Tanski, who took over the Amherst-based energy company’s chief executive officer in March.

“Things are going well,” Tanski said. “Every quarter seems to have good news.”

That good news, including a 24 percent jump in profits, has pushed National Fuel’s stock up by 32 percent this year to a two-year high of $67.

The company’s oil and natural gas drilling business is growing like gangbusters. Its pipeline business is expanding rapidly as the company scurries to build new lines to take all of the gas coming out of remote parts of Pennsylvania’s Marcellus Shale region and bring it to market.

And as more shale gas hits the market, National Fuel’s customers have seen their bills plummet, leaving households across the Buffalo Niagara region with hundreds of dollars in extra disposable income that once went to pay their heat bill.

The average National Fuel residential customer’s winter heating bill has dropped by 51 percent – or $630 – over the past seven years, after adjusting for the differences in weather from one winter to the next. The average winter heating bill, which ran $1,246 in the winter of 2005-06, tumbled to $616 last winter.

“Most of that was brought on by the impact of all the shale gas,” Tanski said.

With the nation awash in natural gas, commodity prices that hovered between $6 and $7 per 1,000 cubic feet less than five years ago have stayed below $4 for most of the past two years. With so much gas waiting to be drilled, the financial markets are signalling that gas prices will stay low for the next two years.

For many gas drillers, the low prices have been a double-edged sword. While they’re producing more gas, they’re struggling to make money because each Marcellus well can cost $3 million or more to drill.

But National Fuel is in a better situation. While it can’t sell the gas it produces for any more than other drillers, it has the good fortune of having run a utility, pipelines and even timber operations across northwestern Pennsylvania – one of the sweet spots in the state’s Marcellus Shale region.

As a result, the company long ago accumulated about 780,000 acres of land across the Marcellus Shale region in Pennsylvania where it has the rights to drill.

That a big bonus to National Fuel in two ways. Since it already controls the acreage, National Fuel won’t have to pay landowners royalties of 15 percent to 20 percent on the gas it might produce on the vast majority of that land.

And because the property isn’t tied to a lease that will expire after a certain number of years, the company has the flexibility to drill where it wants, when it wants, without having its choices dictated by the ticking clock on property leases.

That’s not to say the sub-$4 gas prices haven’t affected National Fuel’s drilling plans. The company initially planned to have six rigs drilling wells in the Marcellus Shale by now. Those plans were scaled back to just four rigs.

Still, the company’s oil and gas production is expected to jump by 45 percent this year and grow by another 16 percent in 2014.

“We figure we can drill wells and economically produce gas at a $3.50 price,” Tanski said.

With National Fuel and other drillers producing more gas, the company’s pipeline business is in the right place at the right time.

National Fuel is spending around $140 million this year to build new pipelines that can bring natural gas from often remote wellheads to the high-capacity systems that can take the gas to markets far from Pennsylvania. It also has transformed many of its existing pipelines so that, rather than importing gas from Canada, they now can export it there.

But the shale gas boom is a bust in New York, which has a temporary ban on horizontal drilling because of concerns over its safety.

“It’s a political issue, rather than a scientific or safety or public health issue. It’s all politics,” Tanski said.

“You go through the small towns in Pennsylvania and there are new pickup trucks on the road, everyone’s lawn is green,” he said. “There are a bunch of dollars that don’t get spent in New York – and may never get spent because the infrastructure gets developed in other places.”

email: drobinson@buffnews.com