With a fresh stamp of approval from City Council, Philly’s natural gas company is on the cusp of something big.
PGW now has the green light to build a $60 million liquefied natural gas plant at the site of its existing Southwest Philly location. There, the public utility will generate and sell the easily-transportable energy source liquid natural gas, known as LNG.
The proposal sailed through Council on Thursday in a 13-4 vote.
“This gives us an opportunity to bring in revenue that’s not tied to ratepayers that allows us to do some additional creative ideas,” said Councilmember Derek Green, who also serves as Philadelphia Gas Commission chair.
It’s not the only project of its kind in the city. SEPTA officials are actively building a similar heat and power plant in Nicetown — fueled by natural gas — that would create electricity to run half its Regional Rail trains.
Both projects have the potential to generate millions of dollars in revenue or savings for the public entities, but not all Philadelphians are excited about them. City residents who are against the plants cite lingering concerns about environmental impact and quality of life for neighbors. The idea has incited multiple protests in the last several months.
These opponents haven’t backed down, despite the SEPTA plant bring already under construction, and the PGW plant being approved.
A lot has happened since the first gas plant proposal in 2015. Here’s a rundown on what’s going on and what it all means.
What actually is LNG?
Basically, it’s the same material as the natural gas PGW already generates — but it’s cooled to about -260 degrees Fahrenheit, compressing it into liquid form and making it easier to ship and store.
The energy source has grown more and more popular in Philadelphia over the years — there are at least 22 generators at hospitals, hotels and office buildings in the city that already use this type of natural gas, according to an Inquirer report.
Is it bad for the environment?
Research is somewhat divided on the environmental impacts of liquefied natural gas. On one hand, activists argue, the process of cooling and distributing LNG is super energy-intensive — and therefore generates carbon emissions. In the long run, it continues our reliance on fossil fuels, which is not great for Mother Earth.
Also, sometimes — albeit rarely — these plants tend to explode.
But here’s the thing: energy intensive as it is, LNG is better for the environment than diesel. Recently, China has used it as a solution to its relentless smog problem. PGW says most of the natural gas cocktail it’ll be producing will end up at institutions that, more often than not, opt to burn fuel anyway.
So natural gas is likely better than the realistic alternative — but not necessarily the most environmentally conscious plan as Philly moves into a future amid concerns about climate change.
At the Philadelphia Gas Commission’s March 1 hearing, at least one city official thought the project would improve sustainability, PlanPhilly reported. Chris Pulchasky, director of policy and strategic initiatives at the Mayor’s Office of Transportation, Infrastructure and Sustainability, said it could reduce particulate matter, nitrogen oxides and sulphur oxides in Philly’s air supply.
“It is also estimated that the project will reduce carbon dioxide by 133,688 tons annually,” Puchalsky said.
What does the city stand to gain?
Potential savings for residents, basically.
In its submission to the Philadelphia Gas Commission, PGW explained it would fund the plant via a public-private partnership with Conshohocken-based Liberty Energy Trust, transferring all the startup costs to Passyunk Energy Center, LLC. In this case, PGW will operate the new facility and sell the LNG to regional customers.
So it wouldn’t cost PGW — or its customers — a dime to build the facility. And it has the potential to raise at least $1.35 million dollars in extra revenue every year. In fact, PGW officials have said that the cash generated by the LNG plant might reduce the need to raise rates for its customers in the future.
“We are looking forward to opening up an important additional revenue stream — which we can reinvest right back into the business, on behalf of our ratepayers,” said PGW prez Craig White in a statement.
The SEPTA scenario is also a public-private partnership. Under Pennsylvania’s Guaranteed Energy Savings Act, SEPTA won’t have to front the $26.8 million construction costs. The transit authority will use its savings to pay back the cash over 20 years.
It’ll save SEPTA some money on future fuel costs, perhaps preventing rate hikes for riders.
When did activists start protesting?
Per Lynn Robinson, a Northwest Philadelphia neighbor who’s taken an active role in the opposition, folks started protesting the SEPTA site all the way back in 2016. They organized meetings, petitioned their elected officials and even put together a force-to-be-reckoned-with Facebook group dubbed the Neighbors Against the Gas Plants.
Since the SEPTA site came first, advocacy had already been mobilized by the time the PGW proposal was introduced last September.
In the last seven months, a petition drafted by the environmental activist group 350 Philadelphia has gotten signatures from nearly 30 fellow organizations. Its members have testified against the South Philly plant at Gas Commission hearings, and protestors have vigorously voiced their resistance in public spaces.
Pennsylvania and New Jersey high school students skipped class in the middle of March, rallying at LOVE Park to demand the city reject the potential LNG plant. Then two weeks later, activists popped up again inside City Hall to fight the PGW proposal.
Why are they mad?
Opponents are angry for two main reasons:
- The gas plants are close to homes
- The contracts are so long that by the time they’re over, natural gas might not be the most sustainable energy source that’s readily available
The Nicetown SEPTA plant would end up right in some people’s backyard — it’s literally being built across the street from a Salvation Army recreation center for neighborhood kids. The PGW plant is slated for a more industrial area.
Councilwoman Helen Gym, one of Council’s four “no” votes on the PGW plant, echoed their sentiment.
“I think it’s clear the city needs to move away from fossil fuels,” Gym told WHYY this week. “We need to move, and we need to move quickly.”
Who are the Neighbors Against the Gas Plants?
Organizing often on Facebook, the Neighbors Against the Gas Plants started as a bunch of angry Northwest Philly residents — and then became the official appellant against the SEPTA plant in court.
They’re now entangled in a yearslong lawsuit against the city, fighting off SEPTA’s under-construction facility on the grounds that by potentially polluting a majority-black neighborhood, it’s a form of environmental racism.
“This is a plant capable of being a major source of pollution,” said Lynn Robinson, director of the appellant group. “The neighborhood needs to stand up and not allow this ridiculous idea, of putting up a power plant right in a residential neighborhood.”
What’s next?
As for the SEPTA facility — construction is already mostly finished. The final appeals hearing was about two months ago, and a city review board is expected to make a decision by the end of June.
Neighbors have continued their advocacy against the site. But with its construction actively ongoing, their cause isn’t looking too optimistic.
And with approval from City Council, the South Philly LNG proposal looks like it’ll move forward. After PGW approves design plans, Liberty Energy Trust will pay for the construction.
