Much has been written about Philadelphia's economy being
driven by "eds and meds," shorthand for education and health
services, as well as entrepreneurship. There is another leg to the Philadelphia
regional economy that is only starting to receive significant press – energy,
which has the potential of even a more significant impact on employment and
economic growth.
I attended the "Greater Philadelphia: The Next
Energy Hub Summit" at Drexel University Dec. 5. I heard industry, labor,
government, education and investment leaders speak about the incredible potential
of Philadelphia's close proximity to Marcellus shale natural gas production and
the region's unique infrastructure – oil refineries, pipeline systems,
world-class ports, an extensive freight rail network and highly skilled
workforce.
The benefits of economical Marcellus shale natural gas
are already being felt in the Philadelphia region. Over the last decade the
cost to heat one's home with natural gas has significantly declined. Many
homeowners over the past few years have converted from oil to less expensive
natural gas to heat their homes, this writer included, realizing significant
savings and a rapid payback on the investment to convert.
Marcellus shale gas will have a very significant impact
on manufacturing in the Philadelphia region, from light manufacturing to
industries that are energy intensive such as the chemical plastics industries,
which provide the building block products and materials of a modern society.
Natural gas is not only used as a fuel, but also as a feedstock for these industries.
Economical shale gas will reverse the trend of the past decades, where
manufacturing and associated jobs were exported overseas. Manufacturing will
return, along with the jobs that were lost. For every direct job created,
numerous other jobs are created indirectly by companies providing services to
these new manufacturers.
By the end of this decade, due to new oil and natural gas
production methods, the United States will become energy self-sufficient. This
will have a huge impact on our trade deficit, not only because of the oil that
we will no longer import, but also due to the increase in products produced
domestically rather than imported. This will have a very significant favorable
impact on job creation and economic growth.
Establishing the Philadelphia region as an energy hub
takes leadership, and we are fortunate to have Philip Rinaldi, a visionary
leader, champion this cause. Rinaldi is the CEO of Philadelphia Energy
Solutions, the firm established 26 months ago to repurpose Philadelphia's Point
Breeze and Girard Point refineries to process crude oil from North Dakota's
Bakkin formation. At one point, the future of these refineries was in doubt.
Rinaldi recognized that these were irreplaceable assets, and could play a very
important role in Philadelphia's energy future.
During his remarks at the Energy Hub Summit, Rinaldi
said, "Philadelphia is ideally suited … [as an energy hub] because of its
location here in the middle of the vibrant northeast corridor between Boston
and Washington, because of the incredible existing infrastructure, both
industrial and transportation-wise, and because of Philadelphia's rich
manufacturing history, which gives us both active sites, a culture that
understands manufacturing and a skilled workforce both at the operation level
and at the senior management level."
Another visionary leader in the drive to transform the
Philadelphia region into an energy hub is Michael Hennigan, CEO of Sunoco
Logistics, the company that recently announced the construction of its Mariner
East pipeline, spending over $3 billion in Pennsylvania and creating thousands
of jobs to deliver Marcellus shale gas liquids including propane, to the
shuttered Sunoco refinery in Marcus Hook, Pennsylvania. The demand for propane
during last winter out-stripped supply. This new pipeline will help alleviate
future shortages. The future of this refinery was in doubt until it was
reimagined as a processor of these liquid products for sale to domestic markets
and export to international markets.
There are those that oppose efforts to further develop
carbon-based sources of energy. All sources of energy must be developed as
quickly as their associated technologies and economics permit. There are energy
markets where carbon-based fuels are the only fuels viable. Natural gas is the
cleanest of these, and has the least impact on the environment.
An issue that has been raised is the environmental impact
of shale gas drilling and the development of Philadelphia as an energy hub.
Leaders within industries that have the potential of adversely impacting the
environment will all agree that their companies must operate as good corporate
citizens and meet all federal, state and local environmental regulations. The
reputational risk to a company and its leaders is great if it does not. As a
former CEO of a global chemical company, I established the right tone at the
top and corporate culture to ensure our company operated as a good corporate
citizen. It would be irresponsible for corporate leaders to do anything less.
The Philadelphia region is poised to regain its
preeminence with a well-balanced economy built on "eds,"
"meds," entrepreneurship and energy. We will all benefit from the
work of our many visionary business, labor and government leaders who are
making this happen in all four areas. We are very fortunate to have them.
Stan Silverman is a writer, speaker and advisor on
effective leadership. He is the Leadership Catalyst at Tier 1 Group, a firm of
strategists and advisors for preeminent growth. Silverman is vice chairman of
the board of Drexel University, and former president and CEO of PQ Corporation.
Early in his career, he worked at the oil refineries in Marcus Hook, PA,
Trainer PA and Philadelphia. Follow: @StanSilverman Connect:
Stan@SilvermanLeadership.com Website: www.SilvermanLeadership.com
Source: Philadelphia
Business Journal
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