The Obama administration announced a broad plan to modernize the nation's energy infrastructure Tuesday in Philadelphia, where an aging system of pipes, wires, rails, and waterways is struggling to adapt to a dramatically shifting energy environment.
A delegation headed by Vice President Biden visited the city to unveil the initial installment of the Quadrennial Energy Review, which focuses on how to transform the nation's energy transmission, storage, and distribution infrastructure.
Biden, joined by Secretary of Energy Ernest Moniz and John Holdren, policy director of the White House Office of Science and Technology, announced the results of the review at the Market Street headquarters of Peco Energy Co., the regional utility that received a $200 million stimulus grant in 2009 to help finance a $650 million modernization of its power-delivery system.
"We have to modernize our infrastructure to keep up," Biden told an audience of about 150. Construction of new pipelines, transmission lines, and ports could drive job growth, economic competitiveness, and national security, he said. Infrastructure spending has declined from 4.5 percent of the economy during the 1960s to less than 1.4 percent today.
Obama launched the review in a January 2014 memorandum that stated the nation's aging infrastructure is increasingly challenged by transformations in energy supply, markets, and patterns of end use, combined with the impacts of climate change and cyber and physical threats.
"Any vulnerability in this infrastructure may be exacerbated by the increasing interdependencies of energy systems with water, telecommunications, transportation, and emergency response systems," the memorandum stated.
According to a fact sheet, the review identifies opportunities that delivery systems can provide for a clean and secure energy future, as well as potential vulnerabilities. It proposes policy recommendations and investments to protect, expand, and modernize infrastructure.
The federal review comes amid a boom in domestic oil and gas production from hydraulically fractured shale formations that has shifted the U.S. energy-policy debate from worries about scarcity to how much and what kinds should be exported. That debate has invigorated a political struggle over the U.S. role in addressing global climate change.
Philadelphia, whose city-owned gas utility faces regulatory pressure to replace its crumbling distribution system, is a showcase for old and new systems.
Industrial and political leaders are debating ways to promote the region as an energy hub for fossil fuels produced from Pennsylvania's Marcellus Shale, which in five years has become the nation's most prolific source of natural gas.
Delaware River refineries that once processed imported oil are being retooled to refine domestic oil delivered from the Midwest by rail, or repurposed to serve as export terminals for Marcellus Shale natural gas liquids delivered here by pipelines. But the operators of the expanding systems of pipelines and oil trains face increasing public apprehension and resistance.
The federal review focused initially on transmission, storage, and delivery systems because the longevity and high costs of energy infrastructure will strongly influence the nation's energy mix for decades. In subsequent years, the review will focus on supply and end-use infrastructure, as well as supply chains, according to the administration.
The Energy Department coordinated the quadrennial review. Meetings were conducted last year, each focusing on specific aspects of energy infrastructure.
On Tuesday, Biden also unveiled two executive actions to modernize the electric grid: The Energy Department is announcing a Partnership for Energy Sector Climate Resilience with 17 utility chief executives to explore ways to harden electricity systems to extreme weather. And the Department of Agriculture announced $72 million to support six new rural electric-infrastructure projects, including major investments to drive solar energy.
Before Biden delivered his address, he and Moniz toured Peco's transmission system operations control room, where dispatchers manage the flow of electricity across the company's high-voltage system. They were joined by Mayor Nutter and Denis O'Brien, senior vice president of Peco's parent company, Exelon Corp.
Moniz, a nuclear physicist, asked detailed questions of the Peco executives about specific equipment installed under the 2009 stimulus grant. Much of the money underwrote "smart-meter" installation, a task nearly complete. But some funded transmission improvements.
"You paid for them," he told Biden.
The vice president seemed intrigued by the technical details of the electric system, but he lit up on meeting several Peco employees with connections to Delaware, his home state. David Weaver, Peco's director of transmission, mentioned his son recently graduated from the University of Delaware, Biden's alma mater.
"Congratulations. You ought to get a pay raise," Biden said, pumping his hand. "That's great, man."