Unless Philadelphia builds a robust connection to
Pennsylvania's gas fields, the region is at risk of being bypassed by the
Marcellus Shale energy revolution, a gathering of business and public officials
heard Friday.
"Creating an energy hub for greater Philadelphia is
really a very important opportunity to be seized," energy historian Daniel
Yergin told the one-day conference, "Greater Philadelphia: The Next Energy
Hub."
The summit at Drexel University, sponsored by the Greater
Philadelphia Chamber of Commerce, was billed as a coming-out party for a
campaign to attract energy-intensive businesses to fuel an industrial revival
in the region.
But business leaders say that the three existing
interstate pipelines that serve Philadelphia have insufficient capacity to
deliver new supplies from the Marcellus, more than 100 miles away. Their aim is
to enlist a critical mass of industries to underwrite construction of a very
large pipeline costing upwards of $1 billion.
"We need a pipeline with ample expansion capability
to span a 110-mile divide," said Philip Rinaldi, chief executive of
Philadelphia Energy Solutions, the South Philadelphia refinery formerly
operated by Sunoco.
Business and big labor groups have lined up behind the
campaign, envisioning a construction boom of pipelines, fuel-production
facilities and petrochemical operations, as well as an upturn in associated
rail and port traffic.
About 100 environmentalists, who say the last thing
Philadelphia needs is more oil-and-gas infrastructure, voiced their dissent
outside the invitation-only event at the Creese Student Center.
"We're here to give these visiting speculators and
the con men who invited them here a warning that Philadelphia is not a
sacrifice zone," said Tracy Carluccio, deputy director of the Delaware
Riverkeeper Network, one of more than a dozen groups that organized the
peaceful march.
The protesters urged the investors to put their money
into renewable-energy ventures instead of fossil-fuel infrastructure.
The activists did not go unnoticed by some speakers
indoors, who warned industries that they risked losing a "social
license" to operate if they ignored concerns about health, safety and the
environment.
"I think it's important not to dismiss their
concerns," said Jason Bordoff, founding director of the Center on Global
Energy Policy at Columbia University. He said cited concerns about climate
change and the safety of trains ferrying a growing amount of crude oil to
refineries.
Yergin, author of several histories of the energy
business, including the Pulitzer Prize-winning The Prize, said an energy hub
would create more than manufacturing jobs at new power plants, petrochemical
facilities or fuel-production plants. The hub would attract engineering,
research, technical and financial employment too, he said.
"You've got to really open your minds - you've got
to look more broadly to see how large the impact will be," said Yergin,
who also was founder of the consultancy IHS Cera. "When you're talking
about an energy hub, you're talking about a whole ecosystem that would benefit
directly and indirectly."
Promoters of the energy hub say Philadelphia is ideally
suited to develop into a center for transhipping - transferring from one
vehicle or vessel to another - and consuming Marcellus Shale products. The
region has an abundance of manufacturing sites; a vast rail, road and maritime
transportation network, and a workforce and culture accustomed to
manufacturing.
"We have the feedstock at our fingertips to rebuild
manufacturing that we lost over the last four decades," said David
Spigelmyer, president of the Marcellus Shale Coalition, the industry trade
group. He said manufacturing is the next natural step in the state's build-out
of the shale-gas industry.
Advocates say Philadelphia already has a long history as
an energy center. Formerly the site of seven oil refineries, the Delaware River
is still home to five that receive crude oil by train and ship and distribute
the fuels they produce to regional and international markets.
And Sunoco Logistics Partners L.P., the Philadelphia
pipeline company, is busy investing billions of dollars to build its Mariner
East pipelines to deliver Marcellus natural-gas liquids such as ethane, propane
and butane to former refinery sites in Marcus Hook and Westville. Much of the
liquid is being shipped overseas.
Building a new pipeline is more complicated than lining
up a list of potential industrial customers.
Federal and state regulatory agencies typically want
pipeline operators to verify that they have committed buyers for capacity, so
that other customers are not not left holding the bag for surplus
"stranded investments."
But the promoters of a new Philadelphia pipeline - as yet
unmapped - say they aim to design the project with enough spare capacity to
accommodate future growth.
"This isn't like encouraging a call center in
Ireland to come here," said Rob Wonderling, the chamber's president.
"These are complex economic-development transactions that take a lot more
time."
Pipeline advocates say they are exploring mechanisms to
finance the project.
They lost one potential investor on Thursday, when UIL
Holdings Corp. abandoned its $1.86 billion bid to buy Philadelphia Gas Works,
the municipal gas utility. Most industrial leaders had supported the sale to
the Connecticut company because UIL would have been able to invest more in
development projects than the financially strapped PGW.
Wonderling said the failure of the PGW sale "sends a
short-term negative signal." But he noted other deals would present
themselves.
"We'll use it as a learning experience," he
said.
Source: Philly.com
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