DV Journal

You don’t think twice about turning on the tap to get a drink of water or flipping a switch to turn on the lights. But the aging utility system in the Delaware Valley needs constant updates to keep what people take for granted running.

And area companies are stepping up to modernize, rebuild, and improve their infrastructure. That was the theme of a Delaware County Chamber of Commerce breakfast meeting Friday at the Radnor Hotel hosted by chamber President Trish McFarland.

The Philadelphia International Airport is developing a new master plan and, in the coming years, will be rebuilt while remaining in its current footprint, said CEO Atif Saeed.

“For all practical matters, it needs to be rebuilt,” said Saeed. Money for the improvements will come from the airlines and government grants. “It will be a large project. It will be in the billions.”

(From left) Christopher Franklin, Essential chairman and CEO; Mike Innocenzo, PECO president and CEO; Philadelphia International Airport CEO Atif Saeed; Energy Transfer vice president for public affairs Joe McGinn, and Trish McFarland, Delaware County Chamber of Commerce president.

“Two-thirds of the land is in Delaware County,’ he said. “In 2017, a study revealed $53 billion in goods were being transported to our catchment area, and only 9 percent was coming to our (airport). Everything else was going to New York and D.C…Blueberries were flown in from South America and would go to New York and be trucked a mile away from where we were. It’s a huge opportunity.”

They are beefing up the cargo area and services “with the end goal so we can capture more of the cargo. Most of that is going to happen in Delaware County…It will be $1.4 billion of investment expected to generate 6,000 permanent jobs and $1 billion economic impact on an ongoing basis in addition to all the residual impact on businesses in the area…We will need to make some adjustments to I-95 because this will create a lot of traffic that will not be consumed by the roadway system right now.”

“It’s all about the money,” he said. “The 1.4 billion needs to come from somewhere.” He was looking at bonds and private investments and said it “is by far the biggest challenge.”

Joe McGinn, vice president for public affairs and government relations for Energy Transfer, said his company stepped in to meet the area’s needs for natural gas, gasoline, and petroleum products as refineries closed.

“We move about a third of (those products) from a national perspective,” McGinn said. “We’re one of the largest pipeline and midstream companies in the U.S.”

“We’re also, through our history, we have the original refined products transportation system,” he added.

While many area refineries closed, the demand for gasoline and other fuels remained strong.

“How do you get those products here?” McGinn asked. “With our vast infrastructure, one of the things we were able to do is tie in with some of the refineries also in the U.S. Because the alternative is, are we going to get this from Europe or overseas, imported through the region, in the New Y ork Harbor or the Port of Philadelphia? Or can we get this produced domestically and get it here? So, we were able to tie our pipeline infrastructure into the mid-continent, Ohio, Indiana, etc., get that gasoline, and pull it through Pennsylvania to points all across the state.

“We invested billions of dollars in the pipeline infrastructure to bring it here,” he said. McGinn mentioned the Mariner East pipeline, which brings gas from the Marcellus Shale in western Pennsylvania to the area.

“It needed somewhere to go, but obviously, there wasn’t a direct tie to southeastern Pennsylvania,” he said. There is not only demand here but also a “great port.”

Closing the refinery in Marcus Hook, which took up about half its land, left a big hole in the borough’s budget, and the town struggled to make up the property tax revenue. But Energy Transfer’s pipeline project created hundreds of permanent jobs and thousands of construction jobs, he said.

McGinn said, “One of the things I’m proud about is…one of the things we’ve focused on at Energy Transfer and Sunoco is being involved with the local fire companies. It’s mostly volunteers, and they really struggle… We’ve given over $1 million in Pennsylvania in the last five years,” including $10,000 to Brookhaven and $60,000 to Marcus Hook.”

PECO President Mike Innocenzo said the company is creating new infrastructure to meet the needs of residents with the proliferation of electric vehicles and solar roof panels.

“We have an infrastructure that served this county for 140 years that has new demands on it,” said Innocenzo. “We’re doing a lot of upgrades to our system.”

He said it is converting its old system to build more capacity and storm-hardening it. On the natural gas side, it is replacing older pipes, which also helps prevent methane emissions.

He pointed out that the area electric grid narrowly averted brownouts during unusually cold weather last December.

“If we haven’t dug up your street, we’ll probably do it soon,” said Christopher Franklin, chairman and CEO of Essential (AQUA), eliciting chuckles. It tries to coordinate the work with other utilities and the townships. “Nobody wants to see a street dug up this year and again in three years.”

“Street work has continued to be one of our challenges,” he said. Even though Delaware County is the smallest county in Pennsylvania, there are 49 municipalities, “each with an individual responsible for setting fees. So we strategically do work. In some communities, we do the work because they’re welcoming, and in some, we defer a little bit…where people are driving costs.”

“It’s all 100 percent passed on to our customers, so we try to control these costs,” he said. “Long-term affordability of rates…Yes, we have massive infrastructure needs…one of the discussions is spending dollars like inside our family.” They have a safety net for those who can’t afford their water bill.

He also mentioned PFAS, forever chemicals that must be removed from the water by 2027 under a federal mandate of four parts per trillion. companies that produced them should be paying for the clean-up, he said.

And Franklin praised AQUA employees’ fast action, who quickly shut down an intake valve on the Delaware River to prevent a Bucks County company’s chemical spill from getting into the water supply in March.

“The Delaware County Chamber of Commerce has consistently advocated for appropriate support of critical infrastructure as part of the chamber’s legislative agenda,” said McFarland. Infrastructure, such as energy, water, and transit, is paramount to the economic vitality in our region, and the chamber is proud to support the companies who were featured in today’s event.”

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Just ahead of the midterm elections, the Biden administration and its allies launched a last-ditch effort to shift the narrative around high gasoline prices, pointing the finger at energy companies and threatening new taxes and potential market restrictions. Unfortunately, bad politics breeds bad policies, with potentially devastating results for American small businesses and consumers.

It is a tale as old as Washington: Politically motivated “solutions” may sway some, but the facts say otherwise. For example, one idea under consideration by the administration is banning gasoline, diesel, and other refined petroleum exports in hope to mitigate high prices at the pump. The White House has even requested the Department of Energy assess the possible impact of banning refined petroleum products. Further, Rep. Ro Khanna, a Biden administration ally, introduced a bill last month that would temporarily prohibit the export of motor fuel during periods when pump prices are high.

In reality, that type of government intervention imposes barriers on free markets and leads to distortions that inevitably result in less production, continued high prices, and grim consequences for our allies abroad.

The problem of increased prices cannot be solved with naïve, or cynical, policies like an export ban. Gasoline and other refined products are globally traded commodities, with the U.S. representing 12.1 percent of refined oil exports globally. Basic economics teaches us a decrease in the supply of a service or commodity, like oil, while demand remains the same, means the price tends to rise. More product in the market lowers prices globally, not just in the U.S. Alternatively, banning the export of refined products would likely just decrease inventory levels – why would a company invest if they can’t sell it? – and place more upward pressure on fuel prices.

According to a study conducted by the American Council for Capital Formation, refined products originally slated for export would be trapped in our coastal refineries, mainly driven by the lack of infrastructure to transport and divert these products from Gulf region refineries to the East and West coasts. This would ultimately lead to refinery capacity decreases domestically as well as an increase in product prices in the global market. The same study concluded that “more than two-thirds of U.S. consumers will see price increases, including average increases of more than 15 cents per gallon.”

Additionally, we cannot turn a cold shoulder to our allies. During the first half of 2022, the U.S. exported record amounts of petroleum products. For example, U.S. propane exports to Europe increased by 51 percent and set a record of 349,000 barrels a day in June. And when the EU’s new refined petroleum products sanctions on Moscow take effect in February, our allies will look to the U.S. as a global leader in exports to help fill that void.

Freeing markets from government controls, and relying on private competition and cooperation, enhances efficiencies, investment, and production – all subject to consumer sovereignty. Take, for example, the removal of the decades-long ban on crude oil exports in 2015. A study commissioned by the energy industry this year found that this policy reversal led to an increase of $161 billion in U.S. GDP, the addition of an annual average of 48,000 jobs, and reduced gas prices by an annual average of 4.6 cents per gallon. Clearly, embracing isolationist policies like restricted exports does not work in our economy’s favor.

The U.S. is facing increased global energy demand, constrained supply, and geopolitical instability, a situation that would be made far worse with these misguided Biden policies. Banning or restricting the export of refined petroleum products or crude oil is not the answer in the near term or over the long haul. The Biden administration and political allies ought to focus on providing tax and regulatory relief for the U.S. energy industry, and not meddling in critical international supply chains in the name of politics.

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Berks, Montgomery, and Chester Counties may see a future passenger rail authority. For decades now, a Reading to Philadelphia route has been under discussion. It was first proposed in the late 1990s, but a $2 billion estimate stopped the project in its tracks.

There has not been a passenger rail service between the cities since 1981. Some supporters say it is under serious consideration now because of the Biden administration’s $2 trillion infrastructure bill, which some critics have called a massive step toward socialism.

The proposed option utilizes existing railways – mainly the freight railway owned by Norfolk Southern, but also along some SEPTA tracks– to launch a new passenger train route.

“The value of passenger rail restoration is not so much about a ride to Philadelphia from Reading. It is about opening up western Montgomery and Chester and all of Berks County to the northeast and Mid-Atlantic U.S.,” said Berks County Commissioner Christian Y. Leinbach. “In other words, it’s not about getting there as much as it is about getting people here.”

Rail service declined over the 20th century.

Nearly 42 million people used railways as their primary mode of transportation in the early 1900s. That number consistently decreased as automobiles and auto lobbying became more prominent and commercial aviation flourished. Approximately 9,000 passenger trains were in service in 1950, carrying 50 percent of the traffic between cities; but by 1960, it dropped to 450 trains, transporting 7 percent of intercity traffic.

In 1970, to partially protect the passenger rail system, the Rail Passenger Service Act created America’s railroad, known as “Amtrak.”

Some 91 percent of Americans use automobiles, with environmentalists complaining about problems with widespread usage such as pollution, climate impact, and traffic congestion issues.

“Greenhouse gas emissions from transportation account for about 29 percent of total U.S. greenhouse gas emissions; make it the largest contributor of U.S. GHG emissions. Between 1990 and 2019, GHG emissions in the transportation sector increased more in absolute terms than any other sector,” the Environmental Protection Agency said. But the EPA noted today’s cars are 98 to 99 percent cleaner for most tailpipe pollutants compared to the 1960s.

Some Americans are now trying to move from automobiles to public transportation, including passenger rail. Yet ridership numbers are still minuscule. Amtrak ridership comprises only .1 percent of all passenger travel in the U.S., according to 2020 national transportation statistics from the Department of Transportation.

According to the Urban Reform Institute, even before the massive Biden infrastructure bill, the transportation sector had received billions in subsidies for federal, state, and local governments.

In Amtrak’s 2018 Budget Request to Congress, the federal government earmarked $1.5 billion in Amtrak subsidies. The state subsidies produce $1.7 billion, equaling 26.4 cents per passenger mile.

While some riders share their concerns about rail transportation – including longer transportation times and less reliable service – others have cited concerns of not enough staff.

According to Amtraktrain.com, various voices post their thoughts, and one individual, with a screen name of West Point Engineer, wrote:

“Amtrak suffered from what almost all RR’s go through during downturns. Furlough too many persons. Hindsight tells us it would have been better off to offer part-time work, keeping some benefits, etc. I feel Amtrak is not recruiting enough now. They aren’t enough operating personnel openings to really increase service.”

Meanwhile, the Tri-County Passenger Rail Committee members have Tri-County Passenger Rail Committee has given many presentations about the proposed new train service. Members tout the benefits of passenger rail services in towns like Reading, Pottstown, and Phoenixville could generate $1 billion in property development and increased property values.

As the project gears up, the previous committee will be replaced by the Schuykill River Rail Authority.

Those who support the route may argue that these potential real estate value increases are an essential reason to continue development. Others, however, prefer a financially solvent system and cite how inefficient railroads are, claiming that Amtrak never made a dime in profit in 50 years. A Wall St. Journal opinion piece titled, “Amtrak’s $66 Billion Dollar Ticket: the government can’t run a railroad but it sure can subsidize one,” supports that view.

“The next critical step in the process is the three public hearings in each of the three participating counties,” Leinbach said. “In order to move forward all of these counties will need to approve the formation of the new Schuylkill River Passenger River Authority (SRPRA)…in three years each county will again vet the project and decide if the project still makes sense. This provides a deliberative process that will consider all aspects of impact and do so in a very public and transparent way. We believe this is the right way forward. At this point, I am cautiously optimistic that passenger rail service can be restored.”

The creation of the SRPRA process may be able to extend Amtrak services in the Northeast Corridor, but if Amtrak services are unreliable or frustrating for others, it may not be as beneficial as it could be with a more robust system. Despite the excitement circle around the expansion of Amtrak service, it’s been tempered with a financial concern due to the issues affecting Amtrak in recent years, especially with COVID-19 cutbacks.

Montgomery County residents can comment via email and a hearing is scheduled for Wednesday, April 20 at 2 p.m. in the commissioners boardroom at one Montgomery Plaza located at 425 Swede Street 8th floor in Norristown.

The Chester County Commissioners will also hold a public hearing on the rail proposal during their April 27 meeting. Information about the proposal can be found at www.chesco.org/passengerrail and comments can be submitted via email. The Berks County Commissioners scheduled a public hearing during their meeting for 10 a.m. on April 21.

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Many Pennsylvania bridges—including some in the Delaware Valley–need to be rebuilt or repaired. And federal money toward those repairs will be forthcoming as part of the recent $1.2 trillion Infrastructure Bill that all area congressional representatives voted for and President Joe Biden signed into law.

In fiscal year 2022 the state will receive more than $327 million in federal funding for bridge work, Congresswomen Chrissy Houlahan (D-Chester) and Susan Wild (D-Lehigh) announced at a recent Zoom press conference.  The money is part of the $1.6 billion that Pennsylvania will receive from the Infrastructure Investment and Jobs Act.

Rep. Chrissy Houlahan

“Anyone who has ever driven around the Greater Lehigh Valley can attest to the urgent need for this bipartisan law to start improving the roads and bridges that our community uses every day,” said Wild. “This funding will fundamentally improve the health and safety of our community, and I couldn’t be prouder to have helped make it happen.

Houlahan said, “Pennsylvania ranks second in the nation for the number of bridges in poor condition (3,353 to be exact). So to say we will benefit from the newly announced Infrastructure Investment and Jobs Act funding is an understatement, especially after the flooding and destruction we experienced as a result of Hurricane Ida, our municipal leaders and union crews are ready to rebuild. This investment will benefit our entire Commonwealth, and it was one of the proudest votes of my career to help get this across the finish line.”

U.S. Rep. Brian Fitzpatrick speaking.

When asked to comment, Congressman Brian Fitzpatrick (R-Bucks), one of only 13 House Republicans who voted for the bill, said, “The bipartisan, physical infrastructure bill is a victory for not only the people of Pennsylvania, but for the entire country. For far too long, the federal government has created the crisis of deteriorating roads and defunct bridges, in desperate need of repair.

“I am happy to see that the Department of Transportation has begun to implement the bipartisan physical infrastructure package and that Pennsylvania will receive $327,178,593 in Fiscal Year 2022 through the Bridge Formula Program for bridge replacement, rehabilitation, preservation, protection, and construction throughout the commonwealth. Pennsylvania will be allocated $1,635,892,965 in bridge funding over 5-years, and I look forward to working with PennDOT and our local communities on full implementation of these critical infrastructure investments,” Fitzpatrick said.

Rep. Mary Gay Scanlon (D-Delaware Co.) is also stoked about the bridges.

Rep. Mary Gay Scanlon

“Bridges are vital to our infrastructure — critical to our daily commutes, emergency vehicles, and the trucks that make deliveries to our stores and homes,” said Scanlon. “Here in Pennsylvania, we have thousands of bridges in poor condition that threaten to divide our communities if not addressed. The funding provided by this legislation will help accelerate long-overdue bridge projects across PA-05 and the commonwealth.

“I am excited about what it means for our community to have the opportunity to address projects like replacing the bridges on Wanamaker Avenue over Darby Creek or addressing noise abatement along I-95. The projects funded through this legislation will create good-paying jobs, pave the way for decades of economic growth and prosperity, and better position the United States for success within an increasingly competitive global economy,” she said.

Congresswoman Madeleine Dean (D-Montgomery) did not respond to a request for comment, although she also voted for the bill.  However, area planning commissioners and PennDOT have projects waiting in the wings for the promised funds.

Nationwide, the Bridge Formula Program is expected to help repair approximately 15,000 bridges. In addition to providing funds to states to replace, rehabilitate, preserve, protect, and construct highway bridges, the Bridge Formula Program has dedicated funding for Tribal transportation facility bridges as well as “off-system” bridges, locally-owned facilities which are those not on the federal-aid highway system, officials said.

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We live in rapidly changing times, especially for business. While we remain optimistic about our economic recovery, we continue to be plagued by pandemic-related challenges from government directives, workforce shortages, labor market issues, and supply-chain disruptions. The Omicron variant of COVID-19 and November’s record high annual inflation of 6.8 percent have also been a blow to the business community.

Over the past year, the Pennsylvania Chamber of Business and Industry advocated for critical legislative measures that support our business community. These reforms include advancing legislation to remove state tax barriers on small businesses; passage of occupational licensing reform and an omnibus workforce package to help address the state’s job skills gap; and enacting legislation to improve the state’s infrastructure, including small cell and 5G broadband technology.

Moving forward, Pennsylvania can be a leader in economic recovery by adopting a long-term strategy to capitalize on the Commonwealth’s growth potential. Simply put, Pennsylvania needs a more ambitious recovery plan that prioritizes the state’s competitiveness, infrastructure, and workforce that creates equality of opportunity for every resident. But, it’s not enough to bring the economy back to where we were pre-pandemic. Our future relies on our ability to attract new business to the state. While other states have shown growth and investment, Pennsylvania lagged.

That’s why the Pennsylvania Chamber launched our Propel PA Forward initiative, which aims to create a framework for success by identifying benchmarks to chart how Pennsylvania ranks compared to other states and where there is an opportunity for improvement. As we move into the new year, the PA Chamber is driving a plan that focuses on policies that will improve the state’s business climate and put us on a path to propel Pennsylvania forward.

The Pennsylvania Chamber will continue to work with policymakers to pursue a public policy agenda that helps businesses survive and thrive. Our legislative agenda prioritizes workforce development and career readiness; affordable and accessible health care; an equitable civil justice system; flexibility in energy markets; balanced labor laws; and responsible state spending.

By allowing goods and services to flow more quickly through the state, training the next generation of workers, and creating a modernized, efficient and reliable infrastructure system, we can make the state more attractive to investment and job growth.

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Delaware Valley U.S. Rep. Madeleine Dean (D-Montgomery) called the newly-passed infrastructure bill “an economic engine” during a Democratic Zoom press conference touting the legislation.

Several Pennsylvania Democratic members of Congress joined the call Wednesday to take a victory lap over the passage of the $1.2 trillion Infrastructure Investment and Jobs Act. The Biden administration says it will bring more than $15 billion to Pennsylvania over five years.

Asked whether the bill, coupled with the pending $1.75 trillion Build Back Better Act, will add to what is already a 31-year high level of inflation—up 6.2 percent in the last year–the Democratic lawmakers insisted it would not.

Congresswoman Susan Wild (D-Lehigh/Northampton) said “responsible journalists” would not suggest these massive spending bills would “directly affect the current state of inflation.”

Dean agreed.

“I think a lot of what we’re doing here is actually going to curb inflation over the next few months…We’re going to see getting people back to work, getting our supply chains working…I hope nobody is going to tie the passage of these two bills to the current inflation rates because there is simply no relationship.”

President Joe Biden was careful to look at where the resources are coming from to pay for these bills, she said.

“I am mindful, and I want to acknowledge, my constituents asked me about their concerns about inflation, cost of goods, cost of gas, so that is real. But these two bills are not the problem. The problem is multi-faceted and it’s certainly deeply connected to COVID and an economic closure and then once you reopen an economy, how you rebound from that closure. These two bills are going to be extraordinary economic engines for our future.”

Congressman Matt Cartwright (D-Wayne/Pike/Lackawanna) said the last time there was a similar investment in American infrastructure was under President Dwight Eisenhower in the 1950s, when the interstate highway system was built. And he added “top economists” note that when companies produce more it will bring the prices down and this bill will “grease the skids” to allow them to do that.

“These inflationary pressures that we’re seeing, they all have to do with reopening our economy after COVID,” he said. “Obviously, the demand has outstripped the supply.” He also noted that Jerome Powell, chairman of the Federal Reserve, has tools “at his disposal” to put the brakes on it.

“We’re not particularly worried about inflation getting out of hand. We can control that,” said Cartwright.

In her remarks on the bill, Dean said her district is “an older ring suburb of Philadelphia which is crying out for this type of investment.”

The bill will bring $11 billion to roads and bridges to Pennsylvania: $100 million to broadband, 2.8 billion for public transportation, $355 million for airports, $240 million for weatherizing, and $1.4 billion for safe drinking water.

Congressman Dwight Evans (D-Philadelphia) said the bill will bring money for improvements to public transportation and add more jobs.

“It is very beneficial,” said Evans. “SEPTA (Southeastern Pennsylvania Transit Authority) just settled a contract because of the American Rescue Act. And now the infrastructure…When you talk about SEPTA and what it means to the entire region…And all of us who are on this phone today all played key roles in making this happen, working with the president and vice president.”

“This is building on what we did before at the state level,” said Evans.

“It’s something everybody Democratic and Republican can be proud of,” said Dean.

Congressman Brian Fitzpatrick (R-Bucks), who was one of 13 Republicans who voted for the bill, was not on the Democrats’ virtual press conference. However, he released this statement: “This is a victory for not only the people of Pennsylvania but for the entire country. The federal government has created the crisis of deteriorating roads, defunct bridges, and vulnerable dams and levees through its inaction. These types of arteries are the lifeblood of American commerce and must be improved. America’s infrastructure has reached a breaking point, and this is a challenge we can no longer ignore.

“From the start, I have insisted on the passage of a hard infrastructure bill, delinked from any other partisan, social spending package. This bipartisan, physical infrastructure bill, which passed the Senate in August with strong Republican support, is entirely separate from the partisan reconciliation bill, which I oppose.

“The bipartisan infrastructure package is completely paid for, primarily by unspent COVID-19 relief funds, and will create a dedicated funding stream for our nation’s infrastructure network. I look forward to the President signing this landmark physical infrastructure legislation into law so that we can bring America’s infrastructure network into the 21st century, create jobs, and improve the health and safety of the American people,” Fitzpatrick said.

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