Chester LNG project promises return, despite Biden’s pause and other hurdles

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Prospects for a controversial natural gas liquids export terminal on the Chester waterfront appear in limbo, if not completely dead. President Joe Biden recently put a pause on all pending LNG export terminals. But the Chester project was already derailed before the announcement.

Penn America Energy CEO Franc James told WHYY News that he “pumped the brakes” on the LNG project last summer after a tense public meeting, where then mayoral candidate and now Chester Mayor Stefan Roots opposed the project, saying it could bring more environmental damage to a bankrupt city overburdened by its legacy of industrial pollution.

“We want to get away from our industrial base, particularly with the polluting industry,” Roots said.

Penn America Energy’s website is offline and its phone disconnected. At least one employee wrote on LinkedIn he lost his job last month.

While James said he hasn’t abandoned his plans, he has yet to file any federal permit applications.

But, he reiterated that the project, also known as Penn LNG, is not dead yet. James said Penn America is taking the time to “listen and learn from the recent developments.” He said that while he was surprised by Biden’s action, he believes Penn LNG has set itself apart from other proposals.

“I’m not just referring to the commercial proposition or the return on equity to an investor,” James said. “I’m really referring to a project that was designed from inception to be the cleanest project in the U.S. in terms of carbon emissions, in terms of design and engineering — as well as a project that is dedicated to the revitalization of a community.”

Residents, activists and officials react to Biden’s pause

“This pause on new LNG approvals sees the climate crisis for what it is: The existential threat of our time,” Biden said, while announcing his decision to put a hold on new LNG export permit approvals as the Department of Energy revises its analysis to include the impact of additional facilities on greenhouse gas emissions.

WHYY News first reported on plans to build an LNG export terminal on a site in Chester in June 2022. Documents revealed that New York-based Penn America wanted to develop a liquefaction facility on 100 acres along the Chester waterfront with the goal to export seven million metric tonnes of LNG each year across the globe. Community opposition to the multibillion-dollar project was swift and furious. But there were many who were championing the project, including former city and federal officials — some of whom served on the company’s advisory board.

State Rep. Martina White, who chaired the legislative hearings by the Philadelphia LNG Export Task Force last year, bashed Biden’s action.

“This horrible policy decision by the Biden Administration will cost tens of thousands of family-sustaining union jobs, which would have been supported by an LNG export terminal project,” White said in a statement.

Pennsylvania is now the second largest producer of natural gas. While this particular proposal would still take years to complete if it’s successful, bipartisan political support for new natural gas infrastructure that uses the state’s vast storehouse of Marcellus Shale gas is strong. U.S. Sens. Bob Casey and John Fetterman released a joint statement Thursday, also questioning Biden’s decision.

“While the immediate impacts on Pennsylvania remain to be seen, we have concerns about the long-term impacts that this pause will have on the thousands of jobs in Pennsylvania’s natural gas industry. If this decision puts Pennsylvania energy jobs at risk, we will push the Biden Administration to reverse this decision,” they said in a statement.

But, Mayor Roots called both the disappearance of Penn America’s website and Biden’s move “good news for the city of Chester.”

“It eliminates the possibility of a corporation or an operation coming to town that is not consistent with my vision for the future of the city,” Roots said.

Roots referred to the proposed LNG facility as an “insult” to the predominantly Black city of Chester, assuming the community would accept another polluting industry in exchange for construction jobs.

“That type of logic is only considered for poor, Black neighborhoods that people believe cannot defend themselves,” Roots said. “This is not something the community wants.”

He called Biden’s climate initiatives through the Inflation Reduction Act and the Bipartisan Infrastructure Law a “blessing” for Chester.

Climate scientists and activists warn that new fossil fuel infrastructure will lock in decades of future fossil fuel use when the world should be going full steam ahead with renewables.The U.S. now leads the world in LNG exports, about half of which go to Europe.

Proponents of LNG counter that natural gas is needed as a “bridge fuel” to use until more renewables are in place.

If Penn America LNG is built, it would have to be sourced with fracked natural gas from Pennsylvania’s shale fields. While burning natural gas is cleaner than burning coal, the extraction and transportation of natural gas results in methane leaks, a potent greenhouse gas. The liquefaction process is also energy intensive.

Some residents living outside of Chester who experienced the construction of the Mariner East natural gas liquids lines also vocally opposed the LNG plans. The Mariner East lines feed an export terminal in Marcus Hook, Delaware County.

“We’re hearing the conversation changing now,” said Ginny Kerslake, who was active in opposing the Mariner East and is now an organizer for the environmental group Food and Water Watch. “Natural gas has huge climate impacts with fracking, environmental health and safety, and you’re going to be sticking another polluting facility in an environmental justice community? Mariner East was a game changer [in this region]. They won’t be able to sneak in another new pipeline [to serve an LNG export terminal].”

Zulene Mayfield, of Chester Residents Concerned for Quality Living, credited the community for bringing attention to the issue and slowing down Penn America’s process.

“We are celebrating, but we’re also cautious. And we’re celebrating because that’s a big damn deal. And the pressure came from the ground up on the politicians, on the industry, on the Biden administration and it wasn’t just Chester — it was a collective effort throughout the United States,” Mayfield said. “But for us, for our community in Chester, we put a light on that issue and we believe that’s what held [Penn America] up.”

What next? Public engagement for ‘Mother Chester’

Despite the swelling opposition and the numerous challenges, James continues to be hopeful.

In order to gauge the pulse of residents, Penn America plans on launching a process by the first quarter of 2024 to engage with community members.

“Our project in Chester ultimately is going to be Chester’s choice,” James said.

According to James, Penn America has spent approximately $25 million on project development so far — which pales in comparison to the $7 billion in funding the company will have to raise to build the terminal.

He said Chester was chosen because of its unique location and existing pipeline infrastructure, and added that the project could generate upwards of $40 million a year in tax revenue. He said the company is working on a community benefits package, which includes an unusual proposition.

“We have in our model every four days a child from Chester will get a college scholarship, every four days. It will be put into a trust,” James said. “We are forecasted to be the largest buyer of natural gas in the state of Pennsylvania [at] 1.2 billion cubic feet a day and the largest buyer of clean renewable and nuclear power, 350 megawatts.”

But James’ hopes all hinge on a series of ifs.

“If this project doesn’t get built, it’s Chester’s choice, but I will continue to try to find avenues to bring value to this community, because she deserves it,” James said.  “Mother Chester deserves it. It may sound corny to you, but it means a lot to me.”