5 Ways Businesses Will Profit From Philly’s Coming Energy Boom
(This post originally appeared on The Philly Post)
Did you hear? An economic boom is quietly and slowly happening in Philadelphia.
“With little fanfare,” this report from last weekend says, “Philadelphia is undergoing a revolution powered by the U.S. energy renaissance. Renewed investment and activity in the region’s sprawling railway network and aging infrastructure is turning the City of Brotherly Love into a potential energy hub that some believe can rival Houston.”
Just this past month daily crude oil output in the U.S. topped 9 million barrels for the first time since March of 1986, and as Patrick Kerkstra wrote in this must-read Philly Mag piece: “The spoils of the Marcellus Shale gas fields will gush into the core of the city and its suburbs through broad new pipelines. Gargantuan processing facilities, built with billions of dollars of global capital, will rise like steel stalagmites along the Schuylkill and Delaware rivers. New factories — lured by the abundant low-cost energy the pipelines provide — will hire thousands of working-class residents to make plastic, steel, cement and countless consumer goods. Air pollution will increase, but so will the local GDP, as energy traders and executives fill up downtown office buildings.”
Our city happens to be in the right spot with the right infrastructure. We’re a hop and a larger skip away from the shale oil fields of Western Pennsylvania and North Dakota, respectively, and located smack in the middle of the populous and energy-hungry East Coast. There are thousands of acres of industrial space along both rivers just waiting to be built and re-built. There are huge refineries already in operation near the airport and in Marcus Hook and other refineries and holding facilities in Trainer and Hunting Park. We’ve got the right rail connections and large ports. We’ve even got Patti Labelle, and she’s a national treasure.
Pipelines are being built. Plans are being made. Relationships are being forged. Billions are readied for investment to expand these refineries and build new facilities. And unless our city leaders screw things up (which, in this town, is always a possibility) good economic times could and should be coming to Philadelphia. So, fellow entrepreneurs and business owners … what’s in it for you? And me? We know this is happening. We’re literally able to predict the future. We’re told that information is power and we have this information. How do we profit in the next 10 or 15 years? What business opportunities are there for a small business like yours and mine? There are many. Here are just five.
New plants and more employees will require training. And equipment. And consulting. And classes. And inspections. This is a hazardous industry. There are already thousands of rules and regulations and you can bet there will be more to come. There will be a tremendous need for safety experts who can provide education and compliance services on an ongoing basis. More labs will be needed for testing and more companies will be outsourced to inspect products, procedures and quality controls. More help will be needed by Amtrak and other private rail carriers to keep their lines safe (and secure … see below). These are all potential new business opportunities for the resourceful entrepreneur.
The economic benefits of an energy boom do not come without their costs. The environmental impacts of fracking will continue to be a serious concern. And the storage, processing, disposal and shipping of oil and all its by-products to and within a huge population center will also come with its environmental challenges. Firms in the business will need to employ consultants to help them navigate and comply with both existing and new regulations which will inevitably appear, particularly after the first mistake is made. And you know there will be mistakes, like a leakage, a fire, or a large spill because these are humans. Whether you’re employed by the industry or by the government, specializing in oil-related environmental law and services will be a large opportunity for both individuals and firms alike.
Billions are already being planned to refurbish existing sites and to build additional facilities in South Philadelphia and Chester. New pipelines are being laid. A new train facility opened this year in Eddystone and more rail development is in the works. Although the ownership of PGW is still up in the air, the company will need to invest hundreds of millions in plants and infrastructure to take advantage of future demand. And, if predictions are correct and more companies in the plastics, chemicals and other energy-reliant industries relocate or move to the region in the next decade or two to be closer to their main source of raw materials, construction will be required to re-make and rebuild all of those creaky plants along the Delaware. The next decade could be a very good one if you’re in the construction business. And a better one if you specialize in energy-related construction.
The coming expansion of oil production and warehousing in the area will also pose significant security risks. Intentionally torching a storage facility or bombing an oil plant could not only cause devastation and the loss of life but create a serious economic problem not only in this country but for those countries relying on the oil coming out of Philadelphia. One rail disaster alone could set back progress for years. Hence the need for firms that can provide more security: guards, technology, systems, training, fences, locks and all the other ancillary products and services that are required to keep these facilities and their surrounding communities, safe and operational.
Transportation and Other Indirect Services
Pipelines or not, somehow all that refined product will need to be locally and regionally moved, stored and secured and that’s going to require transportation companies with trucks and cargo containers and people who are expert in handling that kind of material. More jobs will be in demand and hopefully that means more people moving into the city and spending money. But at the very least it means more people near these facilities will want to rent and buy property, eat pizza, get their hair cut (ahem … not me), repair their cars and purchase new clothing. Oil companies and the new companies that will spring up because of them will need temp services, help with their computers, janitors, accountants, lawyers and payroll companies. Smart business people will keep a close eye out for those companies coming (or starting) here and to those regions that are benefitting.
Yeah, you should have bought land in Manayunk 20 years ago, right? You should have invested in Apple when Steve Jobs returned to the company, yes? You knew good things were going to happen and you didn’t take advantage. Well now you can. Because of shale gas, good things are about to happen in Philadelphia. No one says you have to make a killing. But with the right investment and forward thinking, you could create a good business opportunity for yourself over the next decade.