Is Philadelphia The World's Next Energy Center?

Peak Johnson, for GPA -- With so many projects happening in Philadelphia presently, including the completion of the Schuylkill Banks Boardwalk and the redevelopment of Philadelphia’s shopping district along Market Street, the idea of the city having a new energy pipeline seems to be right at home.

Talk regarding Philadelphia’s future as a possible energy hub, an idea being pushed by some of the region’s most powerful business and political leaders, has already begun. But what would need to happen first?

According to an article published in the Philadelphia Inquirer last year, the project would involve uniting industrial buyers with Marcellus Gas producers to agree to long-term commitments that would guarantee financing for the pipeline's construction.

The project would face enormous political and regulatory challenges, including threading a pipeline of more than three feet in diameter through Philadelphia's densely populated suburbs. A group of Philadelphia business and political leaders want to develop the natural gas pipeline to the city to fuel the growth of energy-intensive industries.

The Bureau of Labor Statistics reports that the Philadelphia unemployment rate in April of this year was nearly seven percent and almost three percentage points lower than a year ago. A pipeline could definitely bring more jobs and money to the city that is desperately in need.

The Philadelphia Energy Solutions (PES), a joint venture between Carlyle Group and Energy Transfer Partners, and Monroe Energy have a refinery that occupies a total of 1,500 acres, spanning both banks of the Schuylkill River. The refinery takes advantage of water and rail access and led recently to the opening of the largest crude by rail facility in the country.

The refinery employs over 1,000 workers and processes about 330,000 barrels of crude oil per day, making it the largest oil refining complex on the Eastern seaboard. PES has already invested more than $250 million in capital and created 100 new permanent jobs at the refinery in just its first year of operation.

In an interview with the Greater Philadelphia Chamber of Commerce, the CEO of PES Phil Rinaldi stated that the proposed route for a 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…”

Rinaldi added that two categories of enterprise would benefit the most from having a pipeline run through Philadelphia: businesses that consume gas for fuel value and industries that use natural gas not so much for direct energy content but as a chemistry feedstock, such as gas to liquids projects.

Earlier this year, economic and political leaders held a campaign for developing massive new infrastructure to deliver energy to Philadelphia from the Marcellus Shale natural-gas fields.

"We're really bound and determined to make an eastern natural-gas energy hub here in Philadelphia, and that's all about connecting to the Marcellus," Rinaldi said in an article with the Philadelphia Inquirer.

New pipelines to the city will help fuel new energy-intensive businesses, he added.

Photo courtesy of Philadelphia Magazine.