Driving Natural Gas Supplies in Greater Philadelphia

Phil Rinaldi is the Principal Partner and CEO of Philadelphia Energy Solutions (PES). PES, a privately held company, is the largest refining complex on the Eastern Seaboard and is visible to those flying into Philadelphia or driving on Interstate 95 near the Philadelphia International Airport. PES occupies a total of 1,500 acres, spanning both banks of the Schuylkill River. The refinery takes advantage of water and rail access, and recently built and opened the largest crude by rail facility in the country. PES’ two refineries employ over 1,000 people and process 330 to 350,000 barrels a day, which translates to about 100 million pounds of oil.

How will Philadelphia Energy Solutions take advantage of future natural gas supplies in Greater Philadelphia?

There is an abundance of natural gas reserves in Northern and Western Pennsylvania. The potential for natural gas supplies to Philadelphia can become a reality. For that to happen physically, we have to have a serious pipeline that could connect the northern part of the state to Philadelphia where supplies can be leveraged. But how do you build and pay for a pipeline, and establish rights of way through a major city? That’s the conundrum.

Through the CEO Council for Growth of the Greater Philadelphia Chamber of Commerce, we started the Greater Philadelphia Energy Action Team. Our mission is to demonstrate for natural gas producers that there is substantial aggregate new demand; to enter into supply contracts they will need to underwrite the pipeline.

What is the proposed route of the natural gas pipeline?

There are many options. As a general rule, pipeline would have to be 120 to 150 miles long, of that, 80 percent is not very controversial, but that last 10 to 20 miles is going to run through Philadelphia, where it becomes much more expensive to site a pipeline. In Philadelphia you can’t just build a pipeline that satisfies anchor tenants’ needs, but you also need to supply sufficient gas in a hub so people can build offtake lines.

What industries in Greater Philadelphia will benefit the most from readily available natural gas

Two categories of enterprise will benefit the most: first, businesses that consume gas for fuel value; for example, oil refineries burn a lot of natural gas, as do chemical plants, steel making, and steel rolling operations. Second, there are industries that use natural gas not so much for direct energy content, but more as a chemistry feedstock, such as gas to liquids projects like methanol or ethanol, urea, and ammonium nitrate.

What activities are you engaged in with the Greater Philadelphia of Commerce, Select Greater Philadelphia and the CEO Council for Growth to expand energy production in the region?

There’s the Energy Action Team and another branch that focuses on chemical side. We also participate in the Mayor’s Manufacturing Task Force, and all these groups relate to the same issue: how do you re-establish a vibrant manufacturing-based economy in Philadelphia?

What’s the goal of the Energy Action Team?

The mission of the Energy Action Team is to create consensus. We have a terrific membership that includes the CEOs of the energy companies and local chemical companies, representatives of federal, state and local government, banks, law firms, pipeline companies, and logistics companies. We are working to show a very strong potential consumptive cohort.

To learn more about our region’s growing energy sector, attend State of the Region: The Energy Advantage on May 8, 2014 at the Crystal Tea Room in Philadelphia. View our event calendar for the latest details.