Business
5:55 am
Wed March 12, 2014

Philadelphia Capitalizes On Energy Boom

Originally published on Wed March 12, 2014 7:32 am

Transcript

RENEE MONTAGNE, HOST:

The shale oil boom is having a major impact on cities across the U.S. In Philadelphia, trains bringing crude oil from North Dakota have helped revived refineries there. Plus, other businesses are now eagerly looking for ways to tap into Pennsylvania's own vast supply of natural gas.

Katie Colaneri of member station WHYY reports.

KATIE COLANERI, BYLINE: Two years ago, the energy business in Philadelphia was in trouble. Oil refineries that had been around for more than a century were on the verge of shutting down. Hundreds of workers were getting pink slips. At the time, John Clark had just been elected business manager of the local boilermakers union. Performing regular maintenance in the refineries was a reliable paycheck for a lot of his members.

JOHN CLARK: They were scared. How are we going to feed our families? How are we going to survive?

COLANERI: But fast-forward two years, things are looking up.

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COLANERI: Last fall, workers in blue jumpsuits applauded as a train hauling 120 black tanker cars full of crude oil from North Dakota pulled into the 140-year-old refinery complex in South Philadelphia. Today, the Philadelphia Energy Solutions refinery is the single-largest consumer of North Dakota crude oil. But CEO Phil Rinaldi says there's something missing.

PHIL RINALDI: What we don't have right now is the copious quantities of Marcellus gas. It sits 150 miles away.

COLANERI: Pennsylvania's Marcellus Shale is producing record-breaking amounts of natural gas, but it can't get here by train. It would require building a pipeline. Just as crude-by-rail helped revive the refineries, Rinaldi says a natural gas pipeline would revitalize the entire region.

RINALDI: This is the opportunity to really build a dynamic, manufacturing-based economy, and that's an economy that has tenacity to it. It just, you know, once it becomes established, it will last.

COLANERI: Energy analyst Kevin Lindemer, with the firm IHS, says there's a good chance Philadelphia could become a booming manufacturing hub. But...

KEVIN LINDEMER: The biggest issue is infrastructure.

COLANERI: Lindemer says one example of this problem has to do with all those oil trains. Without pipelines to move it underground, increased traffic on the rails has resulted in more derailments across the country. In January, a derailment in Philadelphia left six tanker cars full of oil intact, but leaning across the tracks of a bridge that spans a river and a busy interstate. Lindemer says the federal government and the rail industry are busy playing catch-up to make moving all this oil safer.

LINDEMER: This shale resource, both oil and gas, has been developed so quickly, so we're on a pretty steep learning curve in order to make the distribution system compatible with the new resources.

COLANERI: Lindemer says building a natural gas pipeline will come with its own set of regulatory and social challenges. Getting permits will take time. And not everyone in the region will be open to having a natural gas pipeline running through their backyard, or having an economy based on fossil fuels.

MARK ALAN HUGHES: There's a civic obligation, at this point, to take a breath.

COLANERI: Mark Alan Hughes is a professor at the University of Pennsylvania, and was the city of Philadelphia's first director of sustainability. He says there's a need to examine the risks of the energy boom.

HUGHES: And I think those include things like some of the environmental considerations and things like the equitable distribution of this prosperity.

COLANERI: And Hughes says the pressure is on, as more oil moves to Philadelphia by rail every day and Pennsylvania becomes the fastest-growing state for shale gas.

For NPR News, I'm Katie Colaneri, in Philadelphia.

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MONTAGNE: And that story comes to us from StateImpact Pennsylvania, a public media reporting project focusing on Pennsylvania's energy economy. Transcript provided by NPR, Copyright NPR.