Three initiatives to expand natural gas infrastructure in the Marcellus-Utica shale region are expected to have a major impact on Pennsylvania’s economy. According to an economic impact study released Feb. 5 by Philadelphia-based economic consulting firm Econsult Solutions Inc., the Sunoco Logistics Mariner East projects are expected to add up to $4.2 billion to the state’s economy, supporting more than 30,000 jobs during the construction period and approximately 300 to 400 permanent jobs.
Commissioned by Sunoco Logistics, the study is designed to forecast the potential economic and fiscal impacts of the proposed projects, including the development of a 50-mile pipeline to connect with an existing pipeline, construction of a new 350-mile pipeline and the repurposing of the company’s Marcus Hook Industrial Complex to store and process natural gas liquids (NGLs).
Sunoco Logistics recently announced plans to invest approximately $3 billion in Pennsylvania for the Mariner East projects to transport NGLs from western Pennsylvania, West Virginia and eastern Ohio to its Marcus Hook facility — a former oil refinery — for storage, processing and distribution of such products as propane, ethane and butane.
The study finds that construction of the Mariner East projects will support an estimated 30,000 direct, indirect and induced jobs throughout the construction period, including construction, architectural and engineering jobs, wholesale trade business jobs and professional, scientific and technical service jobs. According to the study, the projects will generate an estimated $23 million in personal income tax to Pennsylvania throughout the construction period, in addition to a secondary potential fiscal impact for a total $62 million in tax revenues from direct, indirect and induced activities of Sunoco Logistics, its vendors and employees.
In addition to construction benefits, the study projects that NGL transport, processing and distribution from the Mariner East projects will create a recurring economic impact from ongoing operations.
Although the total expenditure for operations at the Marcus Hook facility has not been finalized, Sunoco Logistics predicts spending between $60 million and $90 million annually to operate the pipeline projects beginning in 2017.
Throughout Pennsylvania, the total economic impact of the projects’ ongoing service is estimated to be between $100 million and $150 million annually, supporting between 300 and 400 full-time jobs with estimated earnings of $22 million to $33 million. Ongoing operations and their spillover impacts will generate between $800,000 and $1.2 million in annual tax revenue.
The majority of employment and expenditure impacts are estimated to be in the southeastern Pennsylvania region (including in Philadelphia and Montgomery, Bucks, Delaware and Chester counties) due to the ongoing operations at Marcus Hook, according to the study.
“Our numbers indicate that the Mariner East project will significantly impact the state’s economy, from the jobs it will create and support, both temporary and permanent, to the tax revenues generated for the commonwealth,” said Stephen P. Mullin, president and principal of Econsult. “You just don’t see companies investing $3 billion on capital projects in Pennsylvania every day.”
The Mariner East projects will increase the locally available domestic supply of propane, meeting both the residential and commercial need for propane and other NGLs as inputs to catalyze regional manufacturing. Additionally, new business and job opportunities may also become available in southeastern Pennsylvania due to the stabilized local supply of NGLs.
Econsult used an econometric model to estimate the direct and indirect economic benefits of both the construction of the Mariner East pipelines and the renovations at the Marcus Hook Industrial Complex and their ongoing operations. The model estimated the purchase of goods and services from local vendors, labor income spent by employees regionally and other spillover economic impacts, which were translated into the generation of estimated tax revenues.
A full copy of the economic impact report is available: Sunoco Logistics Mariner East Economic Impact Report.Tags: Marcellus-Utica, Mariner East, Pennsylvania, pipeline project