08 Nov The Time is NOW for Philadelphia to Become an Energy Hub
On Tuesday, November 1, members of the Navigate team attended the Greater Philadelphia Chamber of Commerce’s event Fueling a Downstream Economy. The program featured a keynote presentation from Denise Brinley from the PA Department of Community and Economic Development as well as panel presentations from leaders in the Philadelphia energy market.
The message from the speakers remained consistent that Philadelphia needs to act NOW and establish our region as an energy hub. With Philadelphia’s close proximity to the Utica and Marcellus shale regions, expansion of the natural gas pipeline infrastructure could lead to significant economic activity and employment opportunities across natural gas and complimentary industries.
Better energy infrastructure and expansion of the interstate and intrastate natural gas pipeline is needed in order to position the Greater Philadelphia region to achieve prominence as an energy hub. Sunoco Logistics has invested in the Mariner East Pipeline Project and UGI Energy Services has invested in the PennEast Pipeline project, which will each deliver more Natural Gas Liquids (NGLs) and Natural Gas to the Philadelphia region. However, many more pipeline projects like these are necessary in order to generate substantial economic benefit and demand for Greater Philadelphia.
Panelists expressed that the pipeline expansion and off-ramps out of the pipeline network into Philadelphia would create the opportunity for companies to co-locate here in Philadelphia. Co-location would allow for streamlined logistics and decreased supply chain costs of roughly 15-20%. Expanding the natural gas pipeline capacity to the Greater Philadelphia region could also stimulate petrochemical and energy-intensive manufacturing related to the plastics industry.
As the panelists expressed, if we don’t immediately start to expand pipelines and attract companies to this region, the vast majority of NGLs and Natural Gas will be transported to areas outside of PA and the resulting economic benefit and job creation will go with them. Mark Nikolich, CEO of Braskem America spoke about a missed opportunity for Philadelphia. Braskem decided earlier this year to build a new production unit at its plant in La Porte, Texas instead of Markus Hook where the company already has existing facilities. Nikolich explained that he was disappointed to choose Texas over Philadelphia, but the company had to expand in a location with easy access to feedstocks and Philadelphia is not evolving fast enough or completely enough through the entire logistics chain. The shrinking window of opportunity to build capacity in Philadelphia and to take advantage of Pennsylvania’s abundant gas production before the capacity is developed elsewhere was made apparent throughout panelists’ discussions.
Continuing to educate the Philadelphia region on the opportunities associated with pipeline expansion and the many advantages of Natural Gas and NGLs is imperative to empower this region to act NOW.
Stay tuned as Navigate continues to share news of relevance to the Energy & Utilities sector. Or contact us to learn more about our work in this industry.