Pennsylvania study sees $2-3 billion-dollar boost from Sunoco pipeline

MIDDLETOWN >> As local municipalities, community groups and the Rose Tree Media School District grapple with potential safety concerns regarding the Sunoco Logistics Mariner East 2 and 2X pipelines, an independent report released by Team Pennsylvania Foundation has outlined the economic benefits of the natural gas resources it will carry.

The study, “Prospects to Enhance Pennsylvania’s Opportunities in Petrochemical Manufacturing,” forecasts $2.7-$3.7 billion in investments in natural gas liquid assets as well as the opportunity to attract additional cracker plants and petrochemical and plastics manufacturing. The resources available in the Marcellus and Utica shale regions have the potential to “drive economic development and job creation across the state,” it notes.

“Pennsylvania has a once-in-a-generation opportunity to develop and implement a strategy that will cultivate a manufacturing renaissance and transform our economy across the commonwealth,” said Gov. Tom Wolf, who co-chairs Team Pennsylvania with Stephen Tang, president and CEO of Philadelphia’s University City Science Center. “We must ensure that we make the most of this chance to create good paying jobs for Pennsylvanians in the petrochemical and plastic industry.”

The comprehensive study, completed by London-based IHS Markit, indicates the Marcellus share resource represents “the second-largest natural gas field in the world and underlays two-thirds of Pennsylvania, extending into neighboring New York, Ohio, and West Virginia.” Natural gas from both reserves accounted for a quarter of all natural gas produced in the United States in 2015 and is expected to comprise more than 40 percent by 2030.

Forty percent of the natural gas produced is rich in natural gas liquid assets, with more than 70 percent in propane and ethane, added the study. Both are used in basic petrochemical production and plastics manufacturing.

Sunoco began site work in February for the pair of pipelines crossing the state. The system will have the ability to transport a maximum of 700,000 barrels of propane, ethane and butane a day from the shale wells to the Marcus Hook Industrial Complex.

Approximately 11.4 miles of the nearly 350-mile system will be installed in Delaware County across private and public property in Thornbury, Edgmont, the township, Aston and Chester Township, merging with the Mariner 1 pipeline in Upper Chichester. The product will then continue to the facility, where it will be processed and stored for sale.

While a portion of the natural gas liquid assets will be shipped abroad, the state has a significant base of existing manufacturers as potential customers. The report notes the companies will benefit from significant reductions in feedstock costs because of their close proximity to resources and the state’s transportation infrastructure.

The study was commissioned by the non-profit organization, which works to connect private and public sector leaders to achieve and sustain progress for the state, in partnership with the Pennsylvania Department of Community and Economic Development. Department Secretary Dennis Davin referred to the report as “a roadmap that will help us jump start our strategy to attract investment.”

Based on the findings, the agencies noted specific priorities to maximize the resources’ economic benefits, including attracting infrastructure investments and manufacturers, as well as retaining and growing those already in the state; developing pad-ready sites; streamlining the development timeline; growing the supply chain and training a workforce with the right skill sets for future high-paying jobs.

The report confirms what Delaware County and Sunoco Logistics have been saying since 2012 about the potential of natural gas-inspired development in the Delaware Valley, said Sunoco Logistics Communications Manager Jeff Shields. The company’s existing pipeline and processing and storage infrastructure and those under construction at the industrial complex and across the commonwealth can supply existing and developing markets and will encourage new local manufacturing businesses with a significant and reliable supply of industrial feedstocks.

“Gov. Wolf gets it,” he added in an email. “He recognizes the opportunity we have to build our economy from within, using Pennsylvania’s own resources, infrastructure and ingenuity.”

Pipeline safety continues to be a concern for the township and school district. The former voted in January to approve a quantitative risk assessment to be performed by Quest Consultants of Norman, Okla., with the goal of determining specific emergencies that could occur as a result of a leak, such as potential impact areas, establishing evacuation zones and event timing. The results would be used to develop a credible emergency plan to prepare first responders and the general public for evacuation and fund the necessary infrastructure and equipment.

A portion of the pipeline is slated to run beneath a road adjacent to Glenwood Elementary School and on Friday the district held a closed-door safety summit regarding the project. Rose Tree Media Superintendent Jim Wigo and the school board previously indicated an emergency plan will be formulated should circumstances require immediate action by staff and students.

Similar to its ongoing questions, the reaction from Middletown Coalition for Community Safety to the IHS Markit report focused on the risks associated with moving “highly volatile, artificially-liquefied gas” through densely populated communities such as suburban Philadelphia. The coalition commissioned an independent hazards study regarding the safety of the pipeline route and the report, also performed by Quest Consultants, outlined the potential consequences and probability of a pipeline breach.

By contrast, the group noted the IHS Markit forecast “serves to further illustrate that these products are not a utility for public benefit, but rather for export and plastics manufacturing.”

“The Mariner East 2 pipeline project, promoted by elected officials and business leaders, asks the public to assume extreme and unnecessary risk for a private for-profit export venture,” the organization stated in an email. “MCCS’ independent hazards study forewarns of unacceptable consequences in the event of a Mariner East leak and our leaders will be held accountable.”