Pipeline crunch is a key topic at Philadelphia shale conference
PHILADELPHIA — Utility giant PECO gets about 85 percent of its gas from the Marcellus shale that underlies much of Pennsylvania and comes within 100 miles of this corner of the state.
Because of insufficient pipelines, though, the gas likely travels a circuitous route, according to Lisa Crutchfield, senior vice president for the Greater Philadelphia Chamber of Commerce. Moving through old systems, much of it goes to the Gulf Coast before coming to this area, adding unneeded costs, Crutchfield told gas industry leaders gathered for a conference here Wednesday.
“That’s not a good thing,” state Department of Community and Economic Development Secretary Dennis Davin said during a discussion on how to make Pennsylvania and energy leader. “It needs to be utilized in Pennsylvania as much as it can.”
The topics of pipelines and reaching high-demand customers in the region and from Philadelphia terminals permeated much of the talk at the annual Shale Insight conference hosted by the North Fayette-based Marcellus Shale Coalition.
Developing more wells and exporting it could provide domestic and international benefits, former New York Mayor Rudolph Giuliani said during a keynote address.
“Europe wants an alternative to Russia,” he said. “They want to do business with us, not their historic enemy.”
Pennsylvania, where gas producers are squeezed by low prices held down by a glut of gas trapped in the Appalachian basin, will miss an opportunity if it can’t find ways to connect more homes, attract manufactures and send more gas elsewhere, several speakers said.
“There is too much gas in this play for just Pennsylvania,” said Public Utility Commissioner Robert Powelson, who noted that New England states have expressed a need for Marcellus gas, especially during the winter.
Several efforts are under way. Peoples Natural Gas, Columbia Gas and UGI are in a PUC pilot program aimed at extending service to more homes. The Greater Philadelphia Energy Action Team is trying to encourage large users of gas such as chemical manufacturers to set up shop here. Gov. Tom Wolf’s administration started a Pipeline Infrastructure Task Force to find ways to smooth the construction process.
One speaker said the industry should slow its push to build pipelines. Mark Brownstein, a vice president with the Environmental Defense Fund, said pipelines only reach capacity on a few cold days each winter.
“Perhaps this capacity isn’t really needed,” he said after speaking on a panel about limiting methane emissions. “It’s worth looking at if there are more discrete ways to address this.”
Others said the buildout is necessary and will last for years.
“That’s probably a two-decade period to put the infrastructure in place to ensure continuous access to low-cost energy,” UGI Corp. CEO John Walsh said during a discussion of Philadelphia’s role in using gas and oil pulled from shale.
A revived energy hub that has developed here at the end of crude oil rail lines and natural gas liquid pipelines “is basically a taste of what is yet to come,” said Philip Rinaldi, CEO of Philadelphia Energy Solutions, which runs the East Coast’s largest refinery.
“This is a region that already is acting as a funnel for energy products,” he said.
The key sites include the South Philadelphia refinery that Rinaldi’s company bought to process 20 percent of the oil pulled from shale in North Dakota, and Sunoco Logistics’ natural gas liquids terminal south of the city in Marcus Hook.
Sunoco Logistics is building at least a second and possibly a third pipeline as part of its Mariner East project to bring propane, ethane and butane from shale wells around Pittsburgh to the terminal.
“The critical thing about energy … is how do you get to market most competitively,” said Sunoco Logistics’ Senior Vice President Joseph Colella. “Frankly, that’s what Marcus Hook brings.”
The conference continues Thursday with workshops for industry workers and speeches by leaders including House Speaker Mike Turzai.
David Conti is a staff writer for Trib Total Media. He can be reached at 412-388-5802 or [email protected].