American Natural Gas Breathing New Life Into Philly Refineries

Pittsburgh, Pa. – Clean-burning natural gas is the lifeblood for manufacturing, especially for the U.S. chemical and refinery industries. According to the American Chemistry Council, “nearly 800,000 people in the U.S. are directly employed in the chemistry industry,” and “for every job created in the business of chemistry, 5.5 jobs are created in other sectors.” The safe, responsible development of tightly-regulated American natural gas represents an “unprecedentedly bright outlook” for our nation’s chemical industry, as outlined in a new KPMG report. As the new report notes, “With a new and abundant source of low-cost feedstock, the U.S. market has suddenly transformed to become one of the most advantageous markets for chemical production in the world.”

In fact, tightly-regulated natural gas development from the Marcellus Shale – considered to be the world’s second largest natural gas field – is breathing new life into refineries in the Philadelphia region, helping to save and create hundreds of jobs and further positioning the Commonwealth for long-term economic growth. A Delaware Co. Industrial Development Authority-commissioned study released last week by IHS focuses on solutions aimed at sustaining the Marcus Hook refinery site, and the hundreds of jobs the facility can support. IHS notes that “the East Coast is advantaged in that it lays adjacent to the Marcellus shale development.”

Commenting on the study’s findings, Marcellus Shale Coalition president Kathryn Klaber said:

This new study underscores the positive potential economic impact associated with safe, responsible natural gas development. Delaware County has the infrastructure and talented workforce to keep the Marcus Hook facility operational, which is critical to the region’s economy and to the Commonwealth. Responsible natural gas development from the Marcellus Shale would play an important role in achieving this shared goal. As the IHS study indicates, Pennsylvania is uniquely positioned to further leverage the Marcellus Shale’s abundant resources to bolster our manufacturing base across the region. This is yet one more way that the development of Pennsylvania’s natural resources are benefiting the Commonwealth and our nation.”

And yesterday, Sunoco Inc. and the Carlyle Group LP, a private equity firm, announced a joint-venture agreement “to keep the largest refinery on the East Coast in operation,” as Reuters reports under the headline “Carlyle Saves Big Sunoco Refinery With Shale Boom.” In a release – which notes that “The joint venture is also exploring other significant capital projects, including the creation of new businesses based on the availability and abundant levels of natural gas from the Marcellus Shale” – Carlyle Managing Director Rodney Cohen underscored the critical role that natural gas development from the Marcellus Shale may play for the site:

Together we’ve re-imagined the Philadelphia refinery and its role as a critical energy hub in the Northeast. This joint venture will keep one of the region’s most important economic engines up and running. … In addition, the refinery’s exceptional location and infrastructure will enable the joint venture to create new business opportunities related to Marcellus Shale natural gas fields.”

Here’s what they’re saying about the announcement and the key role American natural gas is playing to sustain good-paying jobs while strengthening U.S. energy security:

  • Pa. Gov. Tom Corbett: “Today’s announcement is testament to what can be accomplished when the public and private sectors work together toward a common goal; creating job opportunities for current and future generations.” (Release, 7/2/12)
  • The designers of the U.S. pipeline system didn’t envision the bounty of oil and natural gas that would be unleashed in the country’s interior as producers learned to crack open energy-rich shale formations. (Wall Street Journal, 7/2/12)
  • Philadelphia Mayor Michael Nutter: “Philadelphia Energy Solutions will create and maintain hundreds of skilled jobs for Philadelphians. It is an example of the private and public sectors working closely together to ensure this refinery, an important economic engine of the region, continues to operate.” (Release, 7/2/12)
  • Carlyle…also plans to dramatically increase the use of low-priced natural gas from Pennsylvania’s booming Marcellus Shale region to reduce refining costs and emissions. … The company is also exploring plans to build a cogeneration plant to produce steam and electricity for the refinery, and possibly new production units to manufacturer derivatives from Marcellus Shale natural gas, such as Urea ammonium nitrate, a fertilizer. “The idea here is to build out that entire complex into a strong energy and chemical industrial site,” said [Philip L. Rinaldi, chief executive officer of Philadelphia Energy Solutions.] (Philadelphia Inquirer, 7/2/12)
  • U.S. Rep. Robert Brady: “The best part of this deal is that we’re not just saving 850 jobs. We’re laying the ground work for thousands of construction jobs, permanent refinery jobs and all the other jobs related to the suppliers and contractors who work with this plant. I couldn’t be prouder than I am to have been a part of this.” (Release, 7/2/12)
  • The new venture also will…use natural gas from the booming Marcellus Shale formation that lies below much of Pennsylvania, Carlyle officials said. … Carlyle said it also wants to expand the use of Marcellus Shale natural gas as a lower-cost, lower-emission fuel for its refinery while exploring the possibilities of producing natural gas liquids or other natural gas byproducts. A number of parties are looking at getting involved in transporting the gas to the refinery, Carlyle officials said. (Associated Press, 7/2/12)
  • Leo W. Gerard, International President, United Steelworkers: “Not only will good paying manufacturing jobs be saved, but new ones will be created as this vital facility is improved and expanded. This project demonstrates how all stakeholders benefit when private capital, industry, government and labor work together for the collective benefit of society.” (Release, 7/2/12)
  • The venture seeks to exploit the vast U.S. reserves of oil and natural gas now available through new drilling technology. … Rodney Cohen said Carlyle is exploring a co-generation plant that would use the abundance of cheap natural gas from the huge Marcellus Shale formation under Pennsylvania and New York to help fuel the refinery, making it more cost-efficient. He said technological advances in the transportation of Bakken oil and of natural gas make the project commercially feasible. “We are going to explore a new range of energy and chemical businesses built on the foundation of abundant, Pennsylvania-sourced natural gas,” he said. (Washington Post, 7/2/12)
  • U.S. Rep. Patrick Meehan: “The new venture has a far-reaching vision to refine oil and take advantage of the shale gas resources we have here in Pennsylvania. This is a vision that can grow and thrive well into the future.” (Release, 7/2/12)
  • Carlyle…will look for ways to take advantage of the plant’s proximity to the Marcellus shale, which is rich in natural gas liquids that can be refined into petrochemicals. (Wall Street Journal, 7/2/12)

Philadelphia television stations also report: WPVI-TV, NBC 10, and CBS Philly. Have questions about the Marcellus Shale and how responsible natural gas development is directly, and positively, impacting southeastern Pennsylvania? Please visit