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Amid protests, energy hub advocates roll out pipeline campaign

The muffled chants of about three dozen activists penetrated the walls of the Chemical Heritage Foundation in Center City on Wednesday as Philip Rinaldi took the stage.

The muffled chants of about three dozen activists penetrated the walls of the Chemical Heritage Foundation in Center City on Wednesday as Philip Rinaldi took the stage.

"I'm inclined to ask for a brief moment of silence to hear the protesters a little better," the oil-refinery executive joked to the audience of about 200 business, labor and political leaders who gathered to hear plans to promote a Philadelphia energy hub.

The protesters were an audible reminder of the obstacles facing promoters of a massive pipeline to deliver natural gas from the Marcellus Shale region to Philadelphia. The promotional effort is organized by the Greater Philadelphia Chamber of Commerce.

Opposition by climate-change activists has delayed and added costs to efforts across the nation to expand pipelines to transport oil and gas from new shale fields such as the Marcellus, said Robert G. Riga, general manager of business development for Spectra Energy. Spectra owns Texas Eastern Transmission, one of the major pipelines that supplies gas to this region.

"We should not take them lightly," Riga cautioned the audience about the environmentalists. "They're organized, they're intelligent, and they believe in what they do. And they have become effective in working the current system."

Wednesday's ticketed event, to which protesters complained they had been denied entry, was the formal roll-out of "A Pipeline for Growth," a 60-page plan by the chamber's Greater Philadelphia Energy Action Team. The team is headed by Rinaldi, chief executive of Philadelphia Energy Solutions.

Energy-hub supporters are planning to conduct a road show in the coming months to sell the concept to state legislators, local officials, and potential customers. The support of elected officials is critical because they can ease or obstruct permitting processes.

Rinaldi countered arguments from protesters that an influx of natural gas and new energy-intensive industries would create health and environmental problems. Modern industries that comply with environmental regulations are a far cry from 20th-century factories, he said. Natural gas will also reduce dependence on dirtier fossil fuels.

"It's not about creating asthma and all that stuff," he said. "You're doing good; you can't lose sight of that. And we need political courage to kind of embrace that idea. And if we have that kind of cover politically, we're already out winning the war."

The energy hub's advocates say that putting natural gas to work in Pennsylvania, rather than allowing it to be shipped elsewhere, will boost the state's economy and tax base.

Gov. Wolf endorsed the concept Wednesday, saying his administration would monitor the plan to ensure that workforce and environmental safeguards are followed.

"In creating this energy hub, we are ensuring that the greater Philadelphia area will reap benefits that will energize the economy and create good-paying jobs for Pennsylvanians," Wolf said in a statement. "The work done by the energy industry, public sector, labor and government officials in developing this energy hub strategy is a great example of how we can work together to foster economic growth in our commonwealth."

Wolf's support is important because the organizers say they might seek financing through state bonds of some portion of the pipeline project, whose precise route and cost are still only vaguely conceptual.

The pipeline organizers will be counting on existing industries to buy some capacity on the pipeline to fuel new manufacturing processes. Philadelphia Energy Solutions, PBF Energy, Monroe Energy, Sunoco Logistics, and Braskem America, which produces polypropylene in Marcus Hook, are all contemplating expansion.

Local gas utilities - Philadelphia Gas Works, Peco Energy Co., Public Service Electric & Gas Co., UGI, and South Jersey Gas - also are expected to tap into the line.

But the organizers envision a pipeline with excess capacity to attract future large industries to the region. Paying for the surplus is a challenge because pipeline sponsors typically line up firm buyers to win the approval of lenders and regulators.

"It's going to be difficult," Spectra Energy's Riga said in an interview after the event. "To pursue something like that, I think you might have to get a little creative where there's some kind of governmental component, or maybe some other entities that could step up and backstop the capacity."

Spectra is offering one option by promoting a plan to upgrade its Philadelphia Lateral, twin 20-inch diameter pipelines that run 22 miles from Upper Uwchlan Township in Chester County to a junction in the city of Chester, where smaller branches extend south to Delaware and north into Philadelphia.

Last year, Spectra sought formal commitments from shippers to replace one of the twin pipelines with a larger-capacity pipeline. Using an existing pipeline right of way is appealing because it would minimize impact to the environment and landowners.

In 2013, Spectra built a $1.2 billion, 20-mile pipeline extension to deliver 800 million cubic feet of gas a day under the Hudson River and into the heart of Manhattan. The project aroused fierce protests.

"So we've got a lot of experience building in an urban environment," Riga said.

215-854-2947 @maykuth