By Rob Wonderling and Phil Rinaldi
Delco Times Guest Columnists
Published March 25, 2014
The American public has been waiting for more than 40 years to reach a state of energy independence, and recent events in the Ukraine have rekindled media interest in this critical topic.
U.S. energy independence is now rapidly becoming a reality in large part because of the extraordinary natural gas reserves being tapped in Pennsylvania’s Marcellus Shale formation. Philadelphia is the natural place to effectively add substantial value to this abundant resource.
Natural gas from the Marcellus Shale is producible in quantities far in excess of present demand for many decades to come, and the gas is cost effective to produce. It is no wonder that this resource is playing a key role in America’s pursuit of energy independence. Nevertheless, low cost fuel for heating and for fueling the Greater Philadelphia region’s industrial might cannot come fully to fruition unless new, high capacity infrastructure transporting the natural gas and its liquid by-products to market are timely developed.
Philadelphia is the terminal destination that makes the most sense given its fantastic location relative to the market place and to the supporting industrial infrastructure already in place. Philadelphia can become an energy hub, a shipping and trading hub, and the site destination of choice for manufacturers that need reliable supplies of low-cost natural gas for either its energy content or its use as a basic feedstock for value-added production of derivative chemicals.
The Greater Philadelphia region comprises the fifth largest economy in the world and it is in a prime position to be the center of this major transformation in the energy industry by taking advantage of our outstanding infrastructure and the tremendous regional talent pool of science, engineering, and business professionals augmented by craftsmen well trained in manufacturing trade skills that are deeply ingrained in the region’s history.
The development of Marcellus Shale offers not only significant opportunities to reduce consumer energy costs, but perhaps more importantly to promote sustainable economic growth and create new, family-sustaining jobs throughout the Commonwealth that would raise the region’s economic might. Over 50 percent of all the wells drilled in the Marcellus Shale are located within a three-hour drive of Philadelphia.
In 2013, Pennsylvania companies have already hired some 4,000 new employees ranging from engineering and construction to operations and maintenance, environmental health and safety and administration. The growth of the natural gas industry has down-stream importance for advanced manufacturing, chemicals production, transportation and logistics, and international trade: all of which are keys to economic growth for southeastern Pennsylvania, southern New Jersey and Delaware.
Today, Greater Philadelphia’s energy renaissance is translating into real opportunities.
Philadelphia Energy Solutions, a joint venture between the Carlyle Group and the Sunoco affiliate of Energy Transfer Partners, has modernized and reinvigorated the Point Breeze and Girard Point Oil Refineries that operate on a 1,400-acre complex spanning both banks of the Schuylkill River between center city and the airport.
The 350,000 barrels per day of combined capacity makes this the largest oil refining complex on the Eastern Seaboard. PES is a pioneer in the movement of crude oil by rail and is currently the single largest buyer of Bakken crude moving more than 20 percent of all the North Dakota production to its Philadelphia refining complex. Future growth of the PES business is based on processing Marcellus shale gas into value added products.
Braskem America Inc., is repurposing portions of Sunoco’s Marcus Hook refinery to process propane from the Marcellus reserves.
Sunoco Logistics Partners LP is supporting pipeline projects to move natural gas liquids to the southeastern Pennsylvania market via its Marcus Hook site. Mariner East, a new pipeline, will transport propane and ethane from western Pennsylvania for processing and shipping to domestic and international markets. Mariner East’s initial capacity will be approximately 70,000 barrels per day of natural gas liquids.
Monroe Energy purchased Conoco’s Trainer refinery, and is now producing jet fuel for Delta Airlines.
Enbridge has linked Greater Philadelphia to Berthold, N.D., by rail in anticipation of increased East Coast refinery demand.
To help nurture this opportunity, the Greater Philadelphia Chamber of Commerce and its CEO Council for Growth has created the Greater Philadelphia Energy Action Team (Energy Action Team). Chaired by PES’ CEO, Philip Rinaldi, the Energy Action Team is composed of C-level energy-industry experts, current and former government officials, and leaders from higher education institutions; the Energy Action Team serves as ambassadors, advocates, and educators for expansion of and investment in the energy, petrochemical, manufacturing, and infrastructure sectors in the area by promoting the economic environment and business relationship between Marcellus gas producers, prospective new gas consumers, and logistics companies for the purpose of causing a major pipeline with excess gas carrying capacity to connect the Marcellus with a new, regional Philadelphia Hub.
The Energy Action Team assists any person or firm seeking to establish a new energy, manufacturing, or infrastructure project in the region providing guidance to companies about the competitive advantage the region offers to prospective employers and investors.
The priorities of the Energy Action Team are to educate the business community on the economic benefit of developing the energy and manufacturing sectors within the region; to market the region’s strengths as an energy hub and as the premier location to work and do business in order to grow jobs and attract new manufacturing businesses to the region; to advocate for a competitive energy market; and to influence policy makers to both remove policy barriers that impede the future development of the energy and manufacturing sector and support projects, efforts and collaboration of the Energy Action Team.
To learn more about the Greater Philadelphia Energy Action Team visit http://news.gpcc.com/expertise/energy-and-manufacturing
Rob Wonderling, president and CEO, Greater Philadelphia Chamber of Commerce
Phil Rinaldi, president and CEO, Philadelphia Energy Solutions, and Chair, Greater Philadelphia Energy Action Team
See this article on the Delco Times website: http://www.delcotimes.com/opinion/20140325/guest-column-energy-renaissance-is-creating-opportunities-for-philadelphia-region