“You Can’t Do It Safely.”

A Q&A with energy hub opponents who believe natural gas investment is the wrong choice for Philadelphia.

Photo courtesy of Shutterstock.

Photo courtesy of Shutterstock.

The prospect of a new Philadelphia Energy Hub is usually talked about in terms of the jobs it could create, a sort of giant economic defibrillator that, advocates argue, will resuscitate a moribund manufacturing sector. But there are serious side effects associated with large scale petrochemical development: environmental degradation, increased risk of catastrophe and harder-to-define but still-real impacts on a city’s image and quality of life.

Some environmental advocates believe the energy hub conversation has, so far, been an imbalanced one, with too much focus on the upsides and too little consideration of the downsides. In their view, Philadelphia would make an enduring mistake by investing heavily in a fossil-fuel powered future. They contend that alternative energy sources are not just viable, but have just as much if not more potential to goose the city and regional economy.

Citified sat down for a conversation recently with representatives of four organizations that are deeply worried about the prospect of a gas-powered energy hub.

They are:

Below is an edited transcript of the conversation.

Citified: As you all know quite well, there has been a ton of talk and speculation and buzz around this notion of a gas and oil powered energy hub in Philadelphia.

In some respects it’s nothing new. The refineries have been here for an awful long time. But the development of the Marcellus Shale gas fields, the proximity of the city to those fields, has led to a lot of speculation that this is the next big thing, economically, for Philadelphia and the region.

But when we talk about an energy hub, we don’t always talk about the downsides that might accompany that sort of development. Who wants to go first?

Gretchen Dahlkemper: I feel we are on the edge of a new revolution. We have seen across the globe, new innovations and new industries emerge around energy. My biggest concern as a Philadelphia resident is that Philadelphia’s next big economic venture is something that is from the past.

The countries and the cities that are really going to be setting themselves up for success over this next century are those that look at what’s happening in the future and not relying on the energy of the past New York is moving towards a Smart Grid. Countries like Germany are moving towards almost 100 percent renewable energy on some days. What is Philadelphia doing to be part of that energy of the future? Why are we looking at the dirty fuels of the past as our economic future…?

Who do we want to be? Do we want to be up there as a greener city, or do we want to look at, what, 60 or a 100 years ago, using dirty fuels for a petrochemical and manufacturing industry. I think that’s a decision that we really have to make.

Citified:  Let’s stay with that for a second. You’re talking about the opportunity cost issue. The notion that by tripling down on fossil fuels and fossil fuel economy, that the opportunities that a greener economy might present–both environment and economical—would pass the city by.

I think that’s an interesting point. Some people would say, “Why not both? What prevents the city from pursuing both courses?” Gas and oil will likely be needed as a bridge fuel for a while, whether it’s five years, or 20, or 20. Why not do both?

Matt Walker: There are a lot of public resources that go into realizing something like the proposed fossil fuel energy hub, or even a renewable energy hub. It takes a lot of money. Even the time of elected officials in making these deals and advocating for these things, or subsidies, incentives, all that time and all that money is put towards developing out this fossil fuel energy hub.

That is going to prevent us, I think, from transitioning to a cleaner and greener economy for Philadelphia with the focus on renewable energies, like solar and energy efficiency.

I think also that people move to a city and stay in a city because of good quality of life. When you have increasing air pollution from infrastructure attached to this vision of a fossil fuel energy hub, we have to ask some questions.

Are people going to stay here in the city that we love? If they lived here all their lives, are they going to stay and work in some of the sectors, the arts, health, research and what have you? Or are they going to move to another place? Are people going to want to send their kids to school here? There are lots of repercussions that we haven’t really teased out yet. A lot of these decisions have been held behind closed doors. We haven’t had the type of public discussion with all the stakeholders involved, and we really need to have it.

Citified: The gas folks say that Philadelphia has a special opportunity here because of its built‑in in structural advantages, like proximity to Marcellus Shale and existing infrastructure (a port, a robust rail network, refining sites and so on). What reason do we have to think that Philadelphia could become a leader in alternative energy? Why is that something that we can do better than any other city? What advantage do we have there?

Jamie Gauthier:  We already have some businesses that are focusing in that area. They are successful. Those are the types of businesses that we need to grow. Those are the types of jobs that we need to grow.

To give a few examples: Solar States. They are a local solar panel installer. They’ve been pretty successful in our region. We have Community Energy. They’re a business that works to create energy projects all across the country. They have an expertise that they’re not only deploying here, locally, but they’re exporting. Why can’t we have more businesses like that and more jobs in that area? We have a business, Practical Energy Solutions. They are a consulting firm. They help businesses and governments to assess their energy use and come up with sustainability plans. We already have folks here that are talented and that are doing this work.

But those businesses and a slew of others could benefit, by having investment put into the alternative energy space. I agree with Matt that what you put into something is what you get out of it.

We’re talking about putting a lot of attention and focus and energy into this gas hub vision, which seems to be still fairly nascent. A lot has to happen to make it happen. We can put the same attention and energy and focus into an alternative energy vision that could grow in the same way.

An example I want to throw out is what the city is doing with the stormwater. There too, we had a challenge of having aging infrastructure that we needed to handle. We could very well have built more pipes, and handled it that way, and that would have affected the economy, but it wouldn’t have been the most sustainable thing to do. Instead the city decided to manage stormwater in a green way, through new stormwater infrastructure, that’s building a whole new economy, and we have a lot of businesses that can attest to that.

That industry is set to grow by thousands and thousands of jobs over the next 20 years, as the city invests more, as the private market invests more, and as the policies surrounding storm water evolve.

Walker: I think we do have some of the infrastructure in place to bring those types of jobs, good-paying jobs, to Philadelphia. Things like the energy efficiency hub that we have here, the headquarters for research in this field, we have the Energy Coordinating Agency, which is doing some really good work on workforce training for energy efficiency, and they’ve been doing that for years.

Gauthier: Right now solar energy powers 0.11 percent of our total energy use. If we were to get that figure up to 20 percent, that alone would create thousands of jobs, in construction, permitting, and sales, and in the financing of solar projects. And then there would be jobs grown in ancillary industrie too. There’s equipment that’s needed to power solar projects, there is no reason why that equipment can’t be manufactured here.

Citified: Tracy, you had a point on that?

Tracy Carluccio: I wanted to circle back to the opportunity cost, a little bit. Economically, money is scarce right now, there’s not a lot of tax money, and subsidy, running to go around. There’s also a lot of competition for private dollars.

I think we are beyond the point to invest in a single pot, like Shale Gas and Oil.

We need to invest in an economy that gives us multiple benefits. That would be, green energy, renewables, eco‑tourism, health, all of the things that we already have begun to invest in.

We do have a tremendous infrastructure in place, that was based on that old world, of petrochemical refining. At this point of time… we need to invest in, investments that will support and allow our environment to thrive. For instance, the market value of homes, which are known to increase, if you live near a clean waterway, and decrease if you live near a dirty waterway, the availability of parks and open space. Clean air. Quality of life. All of these actually have economic values attached to them…

The neighborhoods that are closest to these refineries, are the ones that are suffering… We’ve come to a moment in time where we have to pay attention to the real cost of that type of development, and it’s been a borne disproportionately by neighborhoods in Pennsylvania, that are closest to these facilities.

Citified: Let me ask another economic question here. Philadelphia: 26 percent poverty rate; higher than average unemployment; good-paying jobs for low-skilled workers are vanishingly hard to come by… And there’s a long track record of job creation in the oil and gas industry that ticks a couple of those boxes.

How do you wrangle with that when you’ve got communities in Philadelphia that have serious economic need, and this is an opportunity to, perhaps, to fill some of that need? How do you weigh those costs and benefits?

Gauthier: The jobs aren’t guaranteed. The jobs that are guaranteed are the jobs to build out the pipeline, which are temporary jobs… It remains to be seen if building these pipelines will get manufacturing to come back. This is very unproven. So why not explore something that will take us into the future, and benefit our economy at the same time?

Citified: Be a little more specific about what’s unproven, because the gas and oil industries have a proven track record of job creation.

Gauthier:  The manufacturing jobs are unproven.

Citified:  The whole “build it and they will come” notion. (Editor’s note: this refers to Philadelphia Energy Solutions CEO Phil Rinaldi’s argument that increasing the city’s supply of natural gas with a new pipeline will help lure high-energy-use manufacturers back to the city).

Dalkemper: When we think about, long term, about what Philadelphia wants to be, yes, we want jobs, but we also want a healthy community. We do know that healthier kids go to school more. They learn better. They have better test scores, and they are better equipped to handle the jobs in the future.

We need to really focus on these communities that are already impacted, and look at those asthma rates, the disease rates, and the dropout rates for kids that are attending school in those areas. That’s only going to get worse (with more energy development).

Walker: On the jobs point specifically, just because we haven’t had the numbers of jobs in renewable energy in this city up to this point, doesn’t mean that that sector is not exploding right now across the country. Solar is the fastest growing job sector in the United States. Why not take advantage of that opportunity, and move forward with that, rather than investing all of our time, energy resources into the fossil fuel energy of the past?

I’m not an economist by any stretch in imagination, but from the numbers I’ve seen… there may be many more jobs to be had with solar energy and energy efficiency than from building up the city’s fossil fuel industry.

Citified:  I don’t trust any of the economic projections on jobs, for any sector, ever. It’s all about the multiplier–

Walker: Let’s just look at direct jobs. We can definitely say (the solar and energy efficiency sectors) are more job intensive than the oil and gas sector, so why not invest in that?

Citified: Let’s talk a little bit about the environmental and health concerns associated with an energy hub. Talk to me a little bit about the air quality in Philadelphia, and the role of the PES refinery in the city’s air quality.

Walker: We have improved from the past. I will say, we still have a failing grade for ozone, ground level ozone, which is basically the main constituent smog. We still failed for annual long-term particle pollution, even though we’re seeing some improvements in 24-hour particle pollution.

The Philadelphia refinery, has been a pretty large contributor to some of the hazardous air pollution in the city. You have a lot of sources in Philadelphia. You have transportation sources. You also have major sources, like that refinery. They’re all contributing to this ground level ozone, but historically, that refinery has emitted a large portion. The last I looked at it, that refinery was still contributing about 70 percent of the hazardous air pollution that the city is responsible for emitting.

We are getting better. Air quality is getting better. But we still have long ways to go if we can’t be reaching our national ambient air quality standards, which were set by EPA. We’re not meeting those.

There are some pockets of the city that are doing worse as far as air pollution and health impacts. These are typically lower income communities. Typically communities of color… They’re often the most impacted, because they live closer to sources like the refineries.

Citified: What would be the impact of a petrochemical boom along the lines of the ones that energy hub advocates are calling for? The air quality impact?

Walker: It’s hard to put an exact number on it, but in general… more infrastructure to process those types of materials is going to greatly increase air pollution for the city.

Dahlkemper: And increased smog means more asthma attacks, more heart attacks, more respiratory illnesses… It would have a huge health impact on the Philadelphia community.

Carluccio:  Basically, we have paid a price. There’s a heavy environmental burden that’s been borne by the Delaware valley region as a result of oil and gas refining in the region.

We have the largest in-place for refining gas and oil in the Mid‑Atlantic. When you look at the Eastern United States, we’re it. We have traditionally, historically, really polluted our area and water as a result of them.

When you look at the statistics …and compare it across the nation, we’re pretty bad. We stack up pretty bad. (Philadelphia magazine found in its own reporting that the region is indeed among the worst for air quality in the U.S.)

Dahlkemper:  We’re talking about petrochemical industry. That’s, at the end of the day, what a lot of this infrastructure is for. I don’t think Philadelphia residents understand what a heavy manufacturing and petrochemical sector means, what that actually means for the region. A lot of citizens that I’ve talked to about this are like, “Oh, well, you know what, my heating bills are going to be lower, this is great.” That’s not what they’re talking about. They’re not talking about lowering your heating bills. They’re talking about bringing in these dirty fuels to put in heavy polluting industry in the middle of Philadelphia. It’s maybe a NIMBY issue, but we have a heavily populated area that’s already been impacted negatively by it.

Citified:  Let’s talk about the NIMBY issue. Why should this not be dismissed as NIMBYism.

Dahlkemper:  I think it is, but I think it’s valid because the backyard is so heavily populated. I want to get back to the amount of students and schools that will be impacted if there is the chemical catastrophe. That’s huge. Let’s talk about the readiness of our emergency task force to protect such a densely populated area. At the end of the day, these petrochemical manufacturing industries, they do have issues. They do have catastrophes. When they happen in a rural area, less people are impacted.

Citified:  Alan Greenberger, the city’s deputy mayor for economic development, when I put that question to him, about the risks involved, said that there’s inherent risk involved in producing large amounts of energy. Respond to that notion: that these are risky endeavors and we have to live with a certain amount of risk when we’re talking about producing energy at a time when renewables haven’t caught yet caught up to fossil fuels.

Gauthier: I don’t think we have to intentionally create more risk. I think your original article laid out how in certain areas they take horrible catastrophes as a cost of doing business because their economy is now dependent on oil and gas.

We’re at a point where we have a choice about where we want to go. We can go backwards or we can go forward. Why would we make a choice to increase that risk?

Citified: Let’s talk a little bit more about the oil trains. What are your concerns with them and what, if anything, can or ought to be done to ameliorate those concerns?

Carluccio: First of all, we’re using old infrastructure and old equipment. We these old DOT‑111 tank cars that were designed for corn syrup now being used to carry crude oil… Second of all, you have old infrastructure. We had a derailment in January of last year going over the 25th Street Bridge. They said, ‘Well, that was a piece of equipment that was left undone when they did the maintenance.’ It’s all part and parcel of an old infrastructure, an old rail system.

All of these pieces of an existing infrastructure are ill‑suited for handling this highly hazardous material that’s in these tank cars. They don’t have adequate brakes… It’s outrageous to think that that isn’t already in place for these very dangerous trains, particularly when you see what happened in Lac‑Megantic, where a brake gave away and 47 people were killed, a town was blown out. We know the basic infrastructure is inadequate for handling this stuff.

Citified: Does that mean this product should be transported by pipeline, as much as that’s possible?

Carluccio: Not necessarily. I think it’s not a competition between pipelines and rails because they’re both ill‑suited. We know from the ethane explosion that happened in this new pipeline, we’re talking about what’s supposed to be state‑of‑the‑art. They had an uncontrollable event occur. This is what happens with these dangerous products. (Editor’s Note: We’re mixing products here a bit. The oil trains carry crude oil, the ethane explosion was on a natural gas liquids pipeline. Both are relevant to a Philadelphia energy hub).

Citified: Let’s get practical here. There is a built‑in demand for fossil fuels that is not going to go away overnight. How should those products be moved, if not by pipeline or if not by rail?

Carluccio: …In fact, we have to step back and we have to say, “You’re way out there in North Dakota. You’re mining this very volatile Shale oil, which has environmental consequences and is very expensive to extract, move around, and refine… Is this really the way we want to go?”

We say that we should be moving away from developing that. It’s not so much like we’ll starve. We’re all here shivering in the dark in Pennsylvania, and oh my gosh, if we didn’t have this, we wouldn’t be able to survive. That’s not the case. Maybe 100 years from now everybody will be starving and cold and we will think up some safe way to use these oil dregs. We can’t do that now. We don’t have the technology to do it safely now, so we shouldn’t be doing it.

Walker: When’s the last time you heard of a two‑mile evacuation from installing a solar panel on a house?

Gauthier: I think that’s the answer to your question about why this isn’t NIMBYism. When you’re talking about NIMBY, you’re talking about something that is needed for the broader society. We don’t need to do this. We’re talking about a choice. We can choose to move in another way…

Citified: But it’s a global oil market. We can say it shouldn’t happen here. We can say that you don’t want to increase the capacity of the Philadelphia area refineries. But I balk a little at this notion that we can’t safely transport it anywhere.

Carluccio: We can’t transport this material safely in the means that we have at hand. Pipelines will explode too.

Citified: So let’s talk about pipeline safety. We have two different forms of pipelines. We’ve got traditional natural gas, which is the one that (PES CEO) Phil Rinaldi wants to build, and then we’ve got the gas liquids. The overall safety record of pipelines looks, to me, to be far superior to transporting by rail, to transporting by truck. Why not, if we are going to be transporting this material, go with pipelines?

Walker:  I was just going to say, I can get this to you too, PHMSA just did a study, released. I don’t know if I’d call it maybe a whitepaper on safety risks of natural gas liquids pipelines. It laid out recommendations to companies if they’re thinking about retrofitting pipelines or just dealing with natural gas liquid pipelines in general.

And things like, you shouldn’t increase the pressure if you’re retrofitting a pipeline. You shouldn’t reverse the flow of a pipeline. You shouldn’t change the type of product that’s in a pipeline. And guess what company just did that on all three of those points? Sunoco Logistics on the Mariner East One pipeline. So they’re doing all those things, which, PHMSA is basically saying that’s a recipe for disaster.

There are explosion risks, like we just saw I believe it was a liquids ethane pipeline in Washington County, for the two‑mile evacuation. We’ve surely seen them for larger transmission pipelines all around the country. I think recently one in West Virginia for a pretty large [inaudible 57:53] one. And there can be these huge explosions.

And compressor stations too, which, I was trying to think of the closest one that would have to be here. There could be one maybe as close as 30 miles and there could be metering stations and things like that. And in Pennsylvania we’ve had several accidents at compressor stations, explosions and fires and that sort of thing. So yeah, this type of infrastructure definitely carries with it great risk.

Female Participant:  Not to delay, talk about increased health risks to residents all across the state where the drilling is happening. We see major health implications, and I can actually send you a study that we were just recently involved in on the health implications around communities where there is heavy drilling.

Kids, skin disorders, headaches, bloody noses. These are the VOCs and the toxic air pollution coming from natural gas, oil, and gas development is real. And it’s impacting these communities. Talk about not a NIMBY issue, it’s impacting families all across this country.

Citified: Let’s talk about the greenhouse question. You hear two arguments. One is that by investing in gas, we’re investing in another fossil fuel. Methane leaks are pervasive, and we’re accelerating the problem.

Two, you hear the argument that Philadelphia still is powered by a lot of coal‑fired power plants. If we had more natural gas in this town and more natural gas‑fired plants, down there in South Philly or across the state, we’d be burning less coal. Therefore, we’d be coming out ahead, at least in the short term or the medium term, on the greenhouse gas emissions.

Walker:  I love that question, because it’s a false question. It’s a false decision. We don’t have to make that decision between coal and natural gas, I don’t think. We’ve all been saying this the whole time. Gas is one alternative, but there are several other very viable alternatives that are happening around the country, around the globe, that we could be using, that have almost a zero emissions of greenhouse gases…

Yeah, we can’t turn the switch tomorrow on renewable energy. I understand that. But if we’re not pushing for the policies, incentives, and resources right now, and envisioning a plan that involves all stakeholders, to realize that vision for our city, then we’re not going to make it happen at all…

(Coal and gas) are both fossil fuels. They both have extreme impacts on climate change and health. We really need to be choosing renewable sources of energy, both for electricity and fuel.

Carluccio:  The bridge fuel is energy efficiency. There are studies that are being done now by scientists, internationally, about what we can gain by efficiently using what we use…If we really were to think hard about what we use, we would realize that we’re wasting a lot more than we’re using. It is not only a technological fix, which we can invest and benefit from economically by developing the technology to make energy more efficiently used, but it’s also a mindset. It’s the fact that we don’t squander the energy, that we so preciously produce.

People don’t like to hear about conservation, but we need to start re‑thinking how we’re living our lives, and compare American with other nations in the world. Other nations are already tightening up how they use energy, making it more efficient, and replacing new sources of energy with energy‑efficiency measures. That’s what we need to do.

Walker: We need to be clear. This is not a pipe dream. In our country, we’re seeing, last year, over 50 percent of the new generating capacity was from renewables, wind and solar. It’s happening all around us.

Dahlkemper: I think Texas has the most wind energy in the entire country…

Citified: Doesn’t that get back to the first point, which is why must it be one or the other?

Walker:  If we had local decision makers promoting solar energy and efficiency as much as we have them promoting a fossil fuel energy hub, we’d be in a very different place right now.

Citified: Let’s go there. The civics discussion. I’d like to hear from you about the nature of the political discussion that we’ve had about the hub, so far. How open do you feel the door has been to the mayor, to council members, to folks in Harrisburg, and the media to your concerns? How robust has the public discussion about the hub so far?

Carluccio: … The general public is in the dark. They don’t know what’s going on, crude by rail being a good example… The point is that if people know what’s going on, then they can’t have a say in what’s happening…

If people know, they’re better prepared. They’re informed. They can make informed decisions about whether they want to rent an apartment, or open a business or take their kid to the park when the train’s going by. These are very important decisions that affect people’s health and their lives.

The other piece of it is people like us. I hate the word “stakeholders.” That’s what they call us lots of times. Stakeholders are people who live there, but they’re also groups that are working on this issue. We stakeholders have to piece together what’s going on by reading articles. You informed us probably more than anyone else what Phil Rinaldi was thinking with your article. Otherwise we wouldn’t have known anything about his pipeline, except for a couple of Chamber of Commerce missives. Through all sorts of detective work, we’ve been trying to piece together what’s going on… This is wrong. We need, in order to be able to serve our constituencies to be informed…

Right now, there is a wall up keeping all of us out. And it’s only through what leaks out, or what we can ferret out, that we can find out what’s happening.

Gauthier: I think that there’s an element of almost like trickery, in the way that the communications are shaping up. It seems as if the way that this will be rolled out to the public when more is rolled out is with this promise of turning Philadelphia back into this big manufacturing hub. I think that that’s being explicitly put out there.

I think it’s unproven and I think it’s being explicitly put out there to get the public to buy into this because we have a 26 percent poverty rate. Anything that you can attach to relieving that condition and into helping people get jobs may become popular with the public.

Walker: The public’s been completely shut out of the decision-making process. Look at City Council’s decision on the PGW sale. I think only to involve the public after the decision was made, it’s ridiculous that’s the only time that the public and other stakeholders have had a chance to testify in public on this issue to City Council.

And council wasn’t really listening when we were up there testifying. There were only one or two representatives of City Council there.

Citified: That’s pretty common.

Carluccio: They were when the industry was there.

Citified:  What about Governor Wolf, his transition team? What about the mayor’s office? How about at the executive level?

Carluccio: We’re submitting white papers to the transition team on this issue as well as other environmental issues. We see there’s an opportunity here. We have a new governor. Of course, he supports Shale gas development, but he said he wants to protect the environment. We’re going to hold him to it.

Dahlkemper:  The hardest part is getting in a seat at the table. The CEO Council of Growth and the Chamber has been unresponsive to people trying to understand what’s going on. We tried to register for their conference that they were having at Drexel…. Completely shut off. No chance of attending.

Walker: Same here.

Dahlkemper: They have the Energy Action Team. They have a vision, and that’s what they’re creating, without taking input on other options. We talked about energy choices. You have coal. You have natural gas. You have crude oil. You have solar. You have wind. You have geothermal. You have all these options. But it really has been singularly focused. The attention and the focus of the Chamber, PES and some really big time politicians has been on building this oil and gas industry without taking input.

Citified: Is there a way to do this or some version of this that uses the best controls, the most sophisticated equipment, that seems, if not exactly sustainable, than a more responsible approach than we’ve seen in the past? Or is it your view that this is simply impossible to do in a responsible way?

Gauthier: I don’t know if it’s impossible, but we have to invest a heck of a lot of resources into figuring it out. Why not invest the same level of resources into moving towards something that’s sustainable?

Walker: Even with the best technologies, you’re still going to have increased air emissions. You’re still going to have methane leakages. You’re not going to solve those problems.

Carluccio: You can’t do it safely…