Trade reps from Italy, Germany, Britain, Poland, Holland, Sweden and other countries, in Philadelphia for a tour of business sites today as European and North American diplomats are inching toward new global free-trade deals, were eager to learn more about importing cheap gas and other fuels and raw materials from Pennsylvania and other states.
"How many of your countries import gas from the Soviet Union?" Michael Krancer, a former Pennsylvania environmental secretary who now represents oil refineries and gas fracking companies as head of the Blank Rome law firm's energy practice, asked the Europeans who assembled at the Reed Smith law firm for breakfast before touring the Navy Yard business center.
"I don't need to tell you what energy development means for the good guys in the world," Krancer went on, warming to his pitch: "The energy business is centered here in Philadelphia. We have an amazing location to take advantage of the resources in your back yard... This is the place to invest your money."
Thomas Lambert, from the Belgian embassy, complained of U.S. restrictions on crude oil and liquified natural gas exports. "I assume you are actively lobbying in D.C. and beyond to have the legislation changed?" he asked.
"Tuesday's election results will help oil exports, and the Keystone XL pipeline," which would bring more Canadian fuel to U.S. plants and ports, said Krancer. "The people spoke pretty loudly about what they want to see. The fracturing candidates won," along with backers of the Keystone Pipeline that would rush Canadian fuel to U.S. refineries over environmentalist and alternative-energy objections. "My party wants to advance theses projects," and the victorious Republicans "want to see results that are good for you and Asia," including lower natural gas prices outside North America, he added. (No one mentioned that prices here will presumably rise, if more is exported.)
With higher production from the Marcellus field in upstate Pennsylvania and other formations opened to exploitation by improved drilling technologies, U.S. gas is several times cheaper than what Russian exporters are charging users in Europe and Asia, said V. Steve Herzog, senior vice president for strategy at Philadelphia Energy Solutions, the Sunoco-Carlyle Group partnership that operates Philadelphia's largest oil refinery, which burns a lot of gas as fuel (revised).
U.S. exports would help world energy prices converge and give nations more freedom to choose suppliers, Kancer said. "History is all about how society extracts energy and uses energy," he added. "Everything else flows from there," despite "pushback" from environmentalists and other opponents. OPEC nations like Saudi Arabia, which once boosted oil prices "to hurt us," are now forced to reduce their prices in hopes of driving some U.S. producers of the market, he added.
Herzog said U.S. crude oil export restrictions do make it cheaper for his company to buy U.S. oil. But another piece of restrictive U.S. legislation -- the Jones Act, which mandates the use of U.S. shipping vessels and crews between U.S. ports -- has boosted the cost of shipping by sea along the East Coast, he added. (Though the state-subsidized Aker Philadelphia Shipyard is among the U.S. shipyards benefitting from Jones Act restrictions.)
Meanwhile, Philadelphia Energy Solutions has invested in a rail terminal that can handle more than three 100-car oil trains a day; Sunoco is pushing to increase its gas pipeline capacity to the area.
The Europeans kept asking: Can they count on U.S. energy exports to surge shortly? "Winston Churchill said Americans can be counted on to do the right thing, but only after exhausting all other options," Krancer quipped. "We need to do it dog-gone quickly."
Andrea Cascone of the Italian embassy asked if Pennsylvania was offering incentives to locate energy-related facilities here. Krancer said Pennsylvania's relatively hands-off approach to energy regulation had proven a powerful incentive, so far. Nobody suggested Gov.-elect Tom Wolf is about to change that.