Shapiro

Garland L. Thompson, Esq.
Journalist and Author, Philadelphia

PennEast

[Editor’s Note: Garland Thompson looks at what could have been and still could be for Philadelphia if its non-believing leaders only opened their eyes to what NEPA is doing.]

Listen up, Congresswoman Mary Scanlon! Listen up, Mayor Jim Kenney and your City Hall minions! While you dithered watching Philadelphia Energy Solutions’ South Philly refinery go un-repaired and un-rescued, allowing thousands of skilled craftsmen and women to be hustled out to the streets jobless in your jurisdiction, others were working to bring energy and petrochemical industry jobs to their own jurisdictions – in our same Commonwealth.

State Sen. John Yudichak’s recent announcement of plans to construct a $9-billion petrochemical plant at Nanticoke, on the Susquehanna River, reminded this reporter of a much-earlier effort to win support for a very similar plant to be constructed in South Philadelphia, on Philadelphia Energy Solutions’ 1400-acre refinery’s “Brown-Field” grounds.

South Philly refinery site

Phil Rinaldi, Philadelphia Energy’s CEO, had early on seen the advantages his refinery could gain processing natural gas from the Endless Mountains’ bountiful Marcellus Shale fields, so he proposed a “Gas-to-Liquids” capability for his two-refinery complex a decade ago.

Pushing for that “Gas-to-Liquids” plant, which would produce “Ultra-Low-Sulfur” gasoline and distillates like the one Northeast Pennsylvania’s Sen. Yudichak’s just announced, Rinaldi got the Greater Philadelphia Chamber of Commerce to establish a “Greater Philadelphia Energy Action Team” – G-PEAT for short – to publicize and raise support for the kind of petrochemical industry growth the Marcellus and Utica Shales’ bountiful resources now are making possible. Shell Chemical’s nearly-complete ethane “cracker” in Beaver County and the newly announced “Gas-to-Liquids” refinery in Luzerne County, each of which opens jobs for thousands of construction workers and will support jobs for hundreds of highly-paid “Gold Collar” plant workers, are the proximate result of others’ drive and initiative while Philadelphians languish.

Phil Rinaldi understood that, but his colleagues on the G-PEAT team never seemed to muster the gumption to stand up to the protest groups that paraded outside Drexel University’s campus yelling “Philly’s No Houston!” when they invited the famous energy analyst Daniels Yergin to come speak about the potential for industry growth here.

U.S. Rep. Scanlon was not in Congress when Rinaldi was making his push, but I was meeting with Rinaldi and attending the Chamber’s breakfast meetings to learn about what the shale-energy revolution could mean for Philadelphia, and for the Tri-State Delaware Valley as well. I listened well when Rinaldi explained that a plant making ultra-low-sulfur fuels would be a game-changer for his refinery. I heard him say PES was a major exporter of liquid fuels to the world.

Jim Kenney, Mayor of Philadelphia, did not attend those Chamber breakfast briefings. He didn’t hear Cabot Energy’s George Stark spell out his company’s highly profitable drilling progress and its need for new takeaway infrastructure to permit the Philadelphia area to gain benefits from the increased availability of natural gas at prices that could not be matched by the Gulf Coast producers who used to own the Greater Philadelphia market.

Then two bad things happened. The first was a rising opposition, led by the mayor of Allentown, Lehigh County, against any possibility of constructing a pipeline to haul Marcellus Shale gas south to Philadelphia. That opposition never got fair answers, by anyone in Southeast Pennsylvania. The second was the abject failure of Philadelphia’s business leadership to put any real muscle, either in governmental lobbying and local community outreach, or in ponying up the investment dollars to get Rinaldi’s proposed 42-inch diameter transmission line built.

So the G-PEAT’s initiative, un-energized, went unfulfilled.

Then a great explosion and fire damaged the Girard Point section of Philadelphia Energy’s refinery complex. Investigation by fire authorities and PES’ engineers found a bad pipe section installed by the refinery’s builder, Babcock & Wilcox: Not made of the steel alloy specified for the corrosive liquids it had to carry, it served decades, then failed, spectacularly.

Philadelphia Energy’s parent, Energy Transfer Partners, finding it would cost $750 million to repair and upgrade the refinery after that devastating fire, decided that was too much cost.

Readers of the daily strident fire-news reports like myself wondered why those repairs and upgrades were so un-supportable when the company had a $1-billion insurance policy. But such questions were never raised in local media reports, or publicly discussed by Mayor Kenney’s City Commerce Director.

Newly elected Rep. Scanlon, whose Congressional District covers Philadelphia Energy’s South Philadelphia neighborhood, did not raise that argument either when she hosted a “listening” session with members of the Steelworkers Union concerned about their loss of employment.

So-called analysts quoted in the Philadelphia Inquirer talked about thin margins of refinery profits and argued that even after Philadelphia Energy shut down its entire operation – including the Grays Ferry plant, which was undamaged – the city and the region would be well-provided with fuels from other sources. And so they are, from offshore producers hauling ships across the Atlantic Ocean to the Fort Mifflin Terminal, and from Midwest refiners long envious of the East Coast markets served by Delaware River refineries.

Too bad for the South Philadelphia refinery workers. Too bad for the restaurants and other businesses that once profited from their custom, but no local leaders seemed moved to support them.

Now, the news is breaking that refineries, in this country and elsewhere, are making big profits for fuels in a world market looking at energy shortages, the result, the International Energy Agency says, of inadequate investment in exploration and production over the last decade. Curiously, no news media reports have examined the possibility that those “inadequate investments” came about because Wall Street bankers refused to support energy investments, demanding “capital discipline” from the shale producers but also prompted by “activist” investors trying to forestall the expansion of drilling for oil and gas.

Never mind that the requirement to “Keep the lights on” didn’t go away but too often got ignored while advocates of a “transition” from fossil fuels rushed around promising “renewable energy” plants would take over and fill the need. Even if they could, Solar and Wind-Tower plants cannot produce critical feedstocks for the products on which America’s consumer lifestyle depends.

Never mind that International Maritime Organization agreements required seagoing vessels to shift from use of high-sulfur bunkering fuels to low-sulfur fuels in the Year 2020, opening new opportunities for refiners such as Philadelphia Energy Solutions to win new profits selling the low-sulfur fuels they were equipped to produce and could build capacities to produce even more.

So Philadelphia Energy went bankrupt, and its facility was sold, to a company that wants to replace its matchless capabilities with warehouse “fulfillment centers,” which pay wages no refinery’s experienced skilled-crafts worker would want.

Now, job-seekers in the Delaware Valley can only watch while their neighbors in Luzerne County get set for big new job openings constructing and operating a gas-to-liquids works designed to produce the same kind of high-value fuels Phil Rinaldi wanted to make in his urban brown-field facility, which served global energy markets by sea as well as the full East Coast customer base Philadelphia Energy Solutions’ now-defunct refinery used to serve.

What do you have to say for yourself now, Rep. Scanlon, watching a Luzerne County state senator step in where you did not? What indeed do you have to say, Mayor Jim Kenney? Speak up, Chamber leaders who failed to put any money where your G-PEAT mouths were working.

Your silence earlier did nothing for the ears of local refinery workers, but it badly hurt the life-chances of many of Southeast Pennsylvania’s job-seekers, who might have benefited from committed, get-the-lead-out community leadership at a time when it most badly was needed.

Garland L. Thompson, Esq. is a Contributing Editor at US Black Engineer & Information Technology.

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