Pennsylvania

Energy. Environment. Economy.

Pipeline opponents target Drexel University

A natural gas pipeline runs through Lycoming County.

Marie Cusick/ StateImpact Pennsylvania

A natural gas pipeline runs through Lycoming County.

Academics are now getting caught up in mounting opposition to Pennsylvania’s pipeline building boom. Twenty local anti-fracking and pipeline opposition groups have signed off on a letter calling on Drexel University to distance itself from an economic analysis of the PennEast pipeline published by the Philadelphia-based Econsult and Drexel University’s LeBow College of Business. The groups say the study is more of a marketing ploy than an objective academic treatise.

Their letter is addressed to Drexel University president John Fry:

“This analysis provides a distorted economic analysis of the PennEast Pipeline project that demeans your institution and damages your credibility as an academic institution interested in providing good quality training and education to students seeking to secure a high quality and credible economic education.”

A consortium of companies behind the proposed PennEast pipeline commissioned the study, which found the project would generate $1.62 billion for the Pennsylvania and New Jersey economies during the construction phase. It also projects design and construction of the pipeline would support 12,160 jobs and pay about $740 million in wages. Econsult released a similar analysis several weeks ago, projecting $4.2 billion in economic benefits for Pennsylvania from the Mariner East pipeline project.

“PennEast is clearly an important player in an important chapter in a broader energy story taking place in the region,” said Drexel economics professor Vibhas Madan, one of the co-authors of the study, at the time of its release.

A glut of natural gas production has led to a boom in new pipeline construction to move that gas to market. The 114-mile, 36-inch pipeline would deliver 1 billion cubic feet of natural gas a day and has met with strong opposition in the 6 counties in Pennsylvania and New Jersey where construction is planned.

The proposed alternate route of the PennEast pipeline. Click to enlarge the image.

Courtesy of PennEast Pipeline Company

The proposed route of the PennEast pipeline. Click to enlarge the image.

In an email, Drexel University spokeswoman Niki Gianakaris tells StateImpact that the study is not an endorsement of the project.

“Drexel professor Vibhas Madan and Econsult Solution’s Steve Mullin conducted a simple standard input-output analysis based on data provided by Penn East,” wrote Gianakaris. “This was neither a cost-benefit analysis of the project nor an endorsement of it. This was a straight analysis of employment, fiscal and potential price effects of the project.”

But the Delaware Riverkeeper Network’s Maya van Rossum, who is one of the signatories to the letter, says that contradicts the characterization of the study PennEast is delivering to those who would be impacted by the pipeline.

“That document is clearly a marketing project for PennEast so Drexel is putting its stamp of approval on the project,” said van Rossum. ”PennEast says this report is a demonstration of a net benefit to the community. If the professor really thinks this is a benign analysis, and now knows that it’s not being used that way, he should get his name off of [the study] right away. It’s not simply information in and information out.”

Van Rossum, along with the other activists, also question the integrity of the report because a former CEO of UGI, one of the companies signed on to PennEast, sits on the board of Drexel’s LeBow School of Economics Corporate Governance Center. But Drexel’s Gianakaris says Lon Greenberg played no role in the report.

“There is no conflict of interest of Lon Greenberg sitting on the advisory board for the Center for Corporate Governance since the center is independent of the School of Economics,” wrote Gianakaris in an email. “Mr. Greenberg was not involved with or aware of the analysis being conducted by the School of Economics and Econsult Solutions.”

Economic studies that try to predict job creation tend to be problematic, and often contradictory. That’s because they use different assumptions when determining a “direct” job versus an “indirect” job, and if the jobs are permanent or temporary. Penn State economist Tim Kelsey says most pipeline jobs are temporary.

“Most of the jobs associated with developing the pipeline will be relatively short-run and many of the workers, if not most of the workers involved will not be local residents,” said Kelsey. “So it’s not a local employment boost for the community.”

Kelsey says those who benefit most from pipelines in the long run are customers who want cheaper gas and electricity, especially large consumers like factories and power plants.

The Drexel study says once built, the operation of the PennEast pipeline would support 98 jobs, including about 88 in Pennsylvania and 10 in New Jersey. Backers say the project, which awaits approval from numerous state and federal agencies, would come online in 2017. Click here to read the full report on the PennEast website.

Comments

  • Common_Sense

    This is wild…at a time we need all the jobs we can get, people are criticizing whether this project will support 3,000, or 6,000 or 12,000 or more jobs. Kelsey is right, the real benefits of this project will be the long term cost stability and reliability for gas and electric customers. The economic infusion during construction is just a (major) added benefit.

    • rukiddingme

      The bulk of fracked natural gas has gone overseas where the frackers can get top dollar for their product. It will never be put into the gas supply in the US in any significant way because the petroleum industry would crash. And that wont happen as long as the oil lobby pays off legislators. Fracking wells don’t last forever, btw, just like any mined product.

  • AlSever

    Good idea–give that study to Jerry Sandusky University

  • bill

    How can Wolf balance his budget and cut property taxes with a gas severance tax if the gas drillers can’t pipe their product to market?

  • Al Neuman

    You would have to be quite ignorant to believe this project is not profitable to the workers installing it. Even the smaller amount of people maintaining it, or the millions of citizens who enjoy the lower priced and environmentally cleaner natural gas this will send to them. The gas companies who own it, will profit also, who have stock available that is owned by many other citizens. It’s a win – win all around, yet these ‘enviro’ groups are against it. Why would anyone pay attention to these people?

    • rukiddingme

      You’re actually the ignorant one, Al. You realize that the bulk of this natural gas is going overseas where the drillers can sell it at a much higher price than in the US, right? The “millions of citizens” you speak of are overseas, not in this country. If this natural gas were introduced into the US, the petroleum industry would crash and legislators have too many interests in that industry to let it fall. The pipeline makes the gas available to the Atlantic ocean for shipment. The idea of decreasing our addiction to foreign oil will never happen as long as the oil lobby still exists.

      • Al Neuman

        Well ‘ru…’, I think you are the ignorant one, without a doubt. It’s quite obvious you know very little about this entire operation.

        For starters, ‘drillers’ just drill the wells, they don’t make pipelines and they don’t sell gas, they drill the wells and get paid & move on.

        The companies who are partners in this proposed pipeline are AGL Resources, NJR Pipeline, PSE&G, South Jersey Industries, Spectra Energy Partners, and UGI Energy Services, 5 of these members have stock on the NYSE, most of which is owned by US citizens, people who pay taxes in this country! These partners boast more than 3,000,000 customers in NJ + PA, who will save $ on this gas!

        Any sales overseas will cost more mainly because paying to ship requires it to be liquidized as well as shipped. That raises the price overseas.

        The US is now the biggest oil producer in the world, we have taken over OPEC, now we are also the biggest gas producer in the world, just above Russia. This is the reason the cost of all our fuels have gone down, much lower than they were last year!

        • rukiddingme

          Read, Al. The future LNG from Marcellus is committed to be shipped overseas to Japan & India.
          http://www.timesleader.com/news/news/1486667/Natural-gas-from-Pa.-headed-overseas

          • Al Neuman

            Right, “timesleader.com”, – believe whatever they tell you, even though this article your referring to has nothing to do with the PennEast pipeline, it fuels your foolishness. Maybe you should try this.

  • Realistic

    Unless the studies say exactly what Delaware Riverkeepers and NJ Sierra Club want them to say, THEY ARE TRASH & CORRUPT!!!

  • JanW355

    I would be so happy to see this pipeline come to NJ! I know many people will work on it and many more will be happy to see this gas at their homes to heat this weather!

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