2020 Year in Review – Pennsylvania Energy Infrastructure

All year we have heard variations of phrases seeking to capture how unusual of a year 2020 has been. None of them does the job.

But as PEIA looks back on the year there are a number of energy infrastructure developments worth highlighting. PEIA recorded many of the stories on its blog and those deserving of particular mention are below:

Energy Industry Steps up to Battle COVID-19, Part III – “Following up on last week’s blogs (here and here) on the energy industry’s willingness to step up and help battle the ongoing COVID-19 pandemic, there is now more good news.

According to a press release from ExxonMobil, the hand sanitizer that we detailed and The Wall Street Journal praised the company for making at its production facility in Baton Rouge, Louisiana, is already being shipped to areas in need of supplies, including Texas, New York, New Mexico, New Jersey, Louisiana and right here in Pennsylvania.”

Shell Cracker Plant Brings Jobs and Economic Opportunities to PA“Beaver County, PA was selected by Shell Oil Company as the home for a new ethylene production plant in 2016. A factor for selecting this location is because it is close to the Marcellus and Utica Shale formations. As a byproduct of drilling and fracking, natural gas companies in the area produce a surplus of ethane. This plant highlights how once again, the natural gas industry has indirectly brought further economic investment and jobs to the Keystone state. This was an exciting announcement for members of Beaver County and the surrounding counties because of the direct and indirect economic benefits this plant will provide, notably the number of jobs created.

Schneider Downs completed a study that found that construction of this plant is anticipated to provide approximately 6,000 jobs to the region and that when the plant is fully operational it is anticipated to support 600 full-time jobs. Two economics professors at Washington and Jefferson College also looked into the potential economic impact of the plant by conducting a yearlong study. They concluded that Beaver County will experience higher average income and employment numbers because of Shell Chemicals’ ethane cracker plant. In fact, they predicted that Beaver County would see a 10.4 percent increase in per-capita employment numbers, estimating 7,400 new jobs will come here, either directly from the cracker plant directly or due to ancillary spinoff activity. These numbers show why this cracker plant is an asset for the people of Pennsylvania.”

Energy Wisdom in Delaware Valley Journal from Former Congressman“Just days before Hurricane Sally dumped rain and brought strong winds to the Gulf of Mexico the Delaware Valley Journal published a piece that is more salient than ever.

Titled ‘Gulf Coast and California Should Serve as Lessons for PA’ and written by Charlie Melancon, a former Democratic member of Congress from Louisiana who served on the Energy and Commerce Committee, the piece takes a good look at the importance of developing regional energy hubs to offset disruptions like those ongoing in California (rolling electrical blackouts) and an active hurricane season in the South.

He writes that the three different scenarios between a safe East Coast, dark California electrical grid, and battered Gulf ‘emphasize the piecemeal nature of the American energy supply chain — in turn spotlighting the need for regions to invest in energy infrastructure and cultivate energy hubs of their own.’”

Coal to Natural Gas Infrastructure Conversion a Positive in SEPA – “As the Delco Times reported today, changes are coming to the ChesCo skyline. The outlet broke news earlier that Kimberly Clark has begun the demolition process in a broader conversion project to its Industrial Highway area plant. The 1.8 million square foot facility will be updated to a 26-megawatt co-generation operation utilizing natural gas instead of coal for energy generation, per plant manager Jeff Hutter. Importantly, many in the area will benefit from this project. It is expected to invest around $150 million, will maintain its 570 jobs, and will help curb carbon emissions by 150,000 metric tons, a cut by roughly 40%.”

Energy Infrastructure Comes Together for Toilet Paper Plant in Chester County – “A recent headline in the Philadelphia Inquirer read: ‘Scott’s toilet paper plant is on a roll in Chester thanks to the pandemic,’ but there is much more to the Kimberly-Clark Corporation’s 570-employee plant’s success than the COVID-19 pandemic. Moreover, the structures undergirding the plant and its accompanying successes will serve Pennsylvania for decades.

First, prior to the pandemic Kimberly-Clark spent about $150 million in upgrading its production plant. Much of this expense was used to retire a coal-fired cogeneration plant in favor of a natural gas cogeneration with 24 megawatts of capacity. As Maykuth noted in his Inquirer piece, the conversion will reduce greenhouse gas emissions by half as a function of natural gas being less carbon intensive than coal when generating electricity.

This project and conversion are possible because of the buildout of energy infrastructure in Pennsylvania. Specifically, the Adelphia Gateway pipeline feeds directly into the plant to fuel its operation. Plant managers praised the pipeline, which originally carried oil, for its ability to help reduce complexity at the plant and offer costs savings.”

In 2020 energy infrastructure showcased its resilience and utility in a number of ways. Although the economy took a beating from the coronavirus lockdowns, energy infrastructure continued to offer good-paying jobs in the Commonwealth. Energy was plentiful and affordable throughout the year, and energy related companies in Pennsylvania like Braskem did more than their share in helping combat the spread of COVID-19.

Energy infrastructure held steady throughout the year and it is certain that the industry will be an important part of the economic recovery the Commonwealth will undertake as vaccines are administered. That said, policymakers and regulators must continue to do their part by fairly applying the law to projects.

PEIA remains optimistic about the future of energy in Pennsylvania. Resources are plentiful, the infrastructure network is robust, and Pennsylvanians continue to prove themselves skilled experts in building safe and reliable energy projects. Here’s to better days ahead in 2021 alongside energy.