Does getting natural gas to industry have a cost problem?
A couple of lines jumped out at me the other day in a story on a group's plan to bring natural gas to the Philadelphia market in order to fuel industry there.
As I read the story, I asked myself why the individual end users don’t just build their own arteries if gas is such a lucrative resource. Its low cost makes it a great alternative economically, right?
“With low gas prices projected, the economics of building a pipeline, however, would require it to carry a colossal quantity of gas, more than any one industrial user would need. ‘You’d need to have a lot of off-takers,’ (Philip L. Rinaldi, chief executive of Philadelphia Energy Solutions) said. ‘That’s the kind of dilemma we’re trying to solve.’”
The group includes Philadelphia business and political leaders -- with Rinaldi as its identified chairman -- that will reportedly work under the umbrella of the Greater Philadelphia Chamber of Commerce, according to an article on Philly.com.
The fact that such an effort might be needed for getting fuel to places where it can fuel growth in the commonwealth shows, in my opinion, the chicken-and-egg element potentially standing between increased natural gas drilling and translating that into broader prosperity.
In this instance, a high volume is needed to make transmission economical. But how can you build up enough industry to use all that gas until the gas is actually there? Going forward, I think that bridge might be trickier than some might have assumed.