op ed
By John B Kelly
The future of natural gas is in jeopardy due to efforts to transition to an electrified/low-carbon energy world. That’s good for the environment, but a risk for Philadelphia Gas Works.
However, the PGW infrastructure can be used to produce and distribute multiple green fuels. This transition to greener fuels at PGW will save 1,600 jobs, avoid defaulting on nearly $1 billion of PGW’s debt and create hundreds of new jobs.
PGW is a municipal utility with over $900 million in debt. More importantly, PGW has a number of underutilized assets that could be adjusted to help the environment, create green jobs and support the green fuel transition.
If we look at what is happening in the neighboring states, PGW in its current form is in danger:
• The NY City Council banned the use of gas stoves in new homes in 2021 from 2024 onwards.
• The governor of New York wants to extend this ban to gas heaters by 2030.
• In February 2023, recognizing the imminent challenges to the natural gas sector presented by these and other similar trends, the Governor of NJ issued an executive order establishing a process for developing a “Plan for the Future of New Jersey’s Natural Gas Utility”. became .”
There are a number of existing technologies that can be implemented over the next decade to make Philadelphia a leader in clean green energy. Investment in green technology:
• combat climate change
• ensures the survival of PGW and its 1,600 jobs
• avoids a massive financial crisis for PGW’s debt
• creates new union jobs that produce and sell green energy to the mid-Atlantic region.
PGW already owns assets that could be useful in producing and distributing the low-carbon fuels at market-leading prices in PA, NJ, DE and even New York – positioning Philadelphia as a green energy hub. PGW also has assets and experience in liquefied natural gas services that can be expanded to support the green fuels transition and could be leveraged in the future with green fuels to expand the capabilities of our future green energy hub.
To position Philadelphia as a green energy leader, the first mover advantage is critical. The options discussed below should be checked for feasibility. The most viable ones should be implemented quickly to meet our goals, reduce our impact on climate change, preserve and create jobs, and establish Philadelphia as a green energy leader.
• Offshore wind producers in NJ and DE produce electricity 24/7 – whenever the wind is blowing – resulting in supply glut during off-peak hours. We can turn cheap electricity into hydrogen at night and turn it back into electricity at higher prices at peak times. PGW already has assets it could redeploy to enter this market faster and at a lower cost than others. This electricity should also be eligible for green electricity price premiums.
• Our region has excess nuclear capacity at night, which can be another source of inexpensive off-peak electricity.
• The Philadelphia Water Department produces tons of sewage sludge that can be converted into organic-derived gas, also known as biogas. Rather than hauling this sludge to landfills where it emits methane or is used as fertilizer polluting streams and rivers, it could be converted into green biogas on-site and sold through the existing PGW scheme.
• According to the City Health Department, there are over 12,000 dining options in the city. Food waste from these restaurants and the food distribution center can be turned into biogas instead of going to landfill, which emits methane.
Renewable biogas can be used as a direct replacement for fossil fuel gas. Instead of paying Texas for our natural gas, we could keep the money and jobs here.
• With future developments in carbon capture, we could combine hydrogen capacity and carbon capture to produce synthetic gas – known as syngas – for distribution via PGW. PGW was formed to make syngas from coal, a dirty process that was replaced by natural gas when the Texas pipelines were built. It would be a natural progression to go back to making our own syngas, but now with clean, green technology.
Let’s leverage existing assets, federal grants, tax credits, municipal purchasing power and other municipal financing tools to accelerate Philadelphia’s transition to green energy technologies and position Philadelphia as a green energy hub.
• Use existing PGW infrastructure to store hydrogen overnight. Choose the most effective and efficient technology to convert cheap/free nighttime wind power (or nuclear power) into hydrogen, store it in existing tanks and convert it back to electricity during peak periods at maximum price.
• Leverage and expand PGW’s LNG facilities and services to support the transition to green fuels. LNG is used to provide security when sold in markets where access to pipelines is inadequate. It is used as fuel for power surges when power is urgently required. It replaces gasoline and diesel in many commercial fleets, long haul and industrial applications. And it provides other utilities with critical supplies to meet their service needs during the coldest days and winter periods.
• Investments in technology to convert sewage sludge into biogas. This would save municipal budget funds and create high-paying green jobs.
• Established a program to collect food waste from the local food and restaurant industry for use as feedstock for a biogas production plant. The technology to support such a program currently exists and is proven from a conceptual and operational point of view.
• Create a dedicated green biogas SKU that can be used by companies to verify their participation in the green energy program. This allows customers to switch to biogas and improve their carbon footprint by purchasing a low-carbon fuel.
• The federal government has allocated US$7 billion to create green hydrogen centers. Philadelphia is included in the proposal, but we are competing with other potential hubs in the Ohio River Valley area. Philadelphia needs to strengthen its position as green energy so we can become the official regional hydrogen hub and free up federal funds.
Green energy is a prime example of how we, the citizens of Philadelphia, must look to market and societal trends to avoid risk and find ways for our city and region to grow and prosper.
In this case, based on my experience with environmental issues and municipal finance, we looked at the environmental and energy market and the trend towards decarbonisation. For PGW as a natural gas distributor, there are great risks, but also great opportunities. We believe Philadelphia has the resources – a skilled workforce, existing infrastructure and market position – to capitalize on opportunities to be a major player in the 21st century green energy economy, improving the environment while providing jobs and prosperity for the to create residents of Philadelphia.
We need at least one City Council member who has the experience and interest to address these issues. The world is changing faster than ever. Either we get run over, or we are prepared and will succeed. ••
John B. Kelly is a Democratic candidate for city council in general.
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