Tuesday, October 28, 2014

"Workshop of the World, Part II?" Philadelphia looks to become an energy hub.


If you are from the Philadelphia area, you have probably heard the moniker "Workshop of the World" before. Whether it was from your grandparents, your parents, or from a local textbook or historian.

WOTW was how Philadelphia was referenced "back in the day" (as we say around here), and it was largely driven by our region's abundance of coal; a cheap source of energy back then. Coal powered Philadelphia's factories, homes, you name it.

Post-Civil War, from about 1880-1920, Philadelphia represented the world's greatest collection of skill and diversity in manufacturing. So much so, that our industrial workforce was about 250,000 people strong ... and that was almost 150 years ago! But what really made Philadelphia unique in comparison to similar cities of its time (e.g. Boston, Pittsburgh, Baltimore, etc), was that we didn't just rely on a few large companies to drive our local manufacturing economy. Philadelphia became an incubator for smaller/medium-sized workshops, where those who maybe once worked for large companies broke off and started making specialized products of their own; let's call it "entrepreneurial manufacturing."

Is it just me, or is this back-story beginning to sound a bit like where Philadelphia is going today; but replace "manufacturing" with "education/medicine/technology."

Now, back to my title: Workshop of the World, Part II.

Phil Rinaldi, the CEO of Philadelphia Energy Solutions (the old Sunoco operation in Southwest Philadelphia), is the man responsible for turning the local refinery around and looking toward Philadelphia's energy future. Natural gas from the Marcellus Shale reserve is currently been "fracked" in PA and being shipped all over the world. But as it stands today, Philadelphia could be seeing more local job action from the current boom.

If the natural gas boom comes to Philadelphia, it could potentially reinvent our local economy.

If it sounds too good to be true, there is always the possibility that it may be. Not only would a gas boom create thousands of jobs, for both blue and white collar workers, but it also has the potential to impact our area environmentally (and not in a positive way). That is where the lines are drawn.

Fracking is sometimes viewed as an environmentally hazardous industry; but when the word "jobs" comes rolling around, politicians and business leaders start to dream big.

As it stands today, most of the Marcellus Shale gas is being sent to Louisiana, where it is refined and shipped. But if the shale reserve is in PA (not LA), why aren't we sending the natural gas to Philadelphia for refinement? It's closer, it's a big city, and it keeps everything local.

That's the question local experts are starting to ask. Can we set up the proper infrastructure (namely, new/larger pipelines) to handle the amount of gas refinement, shipping, and exporting needed; and can we also create the amount of new jobs necessary in order to become a refining destination?

The answer is, yes. We have the workforce, we have the rail lines, we have the ports, and we have the leaders to put all of that together.

But ... here are some concerns to think about:

Under what "conditions" would/should Philadelphia take on this challenge?

Would this endeavor take away from our green/sustainable efforts over the past decade?

Since natural gas is a finite resource, does a push to create a natural-gas-based economy hurt the next few generations of Philadelphians?

Are we trying to plan for the short-term, or the long-term?

These are the concerns that many people have, and with good reason. Creating the pipelines necessary to run natural gas from the Marcellus Shale directly to Philadelphia is very similar to gambling.

If we win, we'll win big. If we lose, we'll lose big. Those results will also play a large role in Philadelphia's local real estate market.

Unfortunately, there are almost too many details to discuss in this blog post, but the possibilities for Philadelphia to embrace this opportunity are basically endless. At the end of the day, it will take a lot of planning, discussion, and forward-thinking to do it right.

Here is a link to "Energy Boomtown PhillyStyle," from WHYY. You will get a lot of great information if you listen to the hour-long segment.

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