Could Delco get a major LNG export terminal? How Biden’s plans to increase LNG exports could clash with its environmental justice goals in Chester

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The city of Chester is an environmental justice community. (Kenny Cooper/WHYY)

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Plans for a massive liquefied natural gas facility and export terminal in Chester along the Delaware River have quietly been shopped around to current and former elected officials and their representatives from Chester City Hall to the governor’s office in Harrisburg. WHYY News obtained details of the plan, as well as the company’s lobbying efforts through Right-to-Know requests.

Penn America Energy LLC, the New York-based company behind the estimated $4 to $8 billion project, wants to build a liquefaction facility on 100 acres along the Chester waterfront with the goal of exporting 7 million metric tonnes of LNG each year down the Delaware River to countries in South America, Europe, and Asia, according to the documents obtained by WHYY  News. For comparison, six current LNG export terminals in the U.S. shipped 7.6 million metric tonnes of LNG overseas in March, according to the Energy Information Administration.

Franc James, Penn America’s CEO, told WHYY News the project has been in the works for five years, and is “sourcing the cleanest environmentally responsible natural gas possible.”

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“As an environmentalist, I want to set a new standard for being the most environmentally responsible and sustainable project ever developed,” said Franc in an email. ”Natural gas from the Marcellus is the cleanest natural gas in the world now and working to be even cleaner. That greatly appeals to us and in support of a new standard worldwide.”

In response to questions about the relative cleanliness of Marcellus Shale, Penn America LNG provided a chart by the Clean Air Task Force, which says due to regulations and efforts by producers, natural gas production in the Appalachian Basin emits the least amount of methane worldwide.

While James did not provide details or a timeline for the project, a February 2021 report by Penn LNG obtained by WHYY News, describes plans to build on a 100-acre brownfield site along the Chester Waterfront. James says the site has not yet been secured but others briefed on the plan say the company is eyeing the former Ford factory.

James told WHYY News that anticipating a shipping date is premature. But a project overview in the report says the engineering firm Bechtel and Air Products would build a gasification plant that could freeze one billion cubic feet of Marcellus and Utica Shale gas a day with a target to start shipping overseas in 2027 or 2028.

A new five-mile right-of-way would be required for a pipeline that would connect the plant to a supply of Marcellus and Utica natural gas at Enbridge’s proposed expansion of the “Philadelphia Lateral.” This line would tap into the Texas Eastern line, starting at the Eagle compressor station in Chester Springs and ending at the planned Chester Junction station in Delaware County. From there, the final five miles of pipe would connect to the liquefaction plant.

The company estimates 4,000 plus jobs during construction, and increased city and state tax revenues, according to the report. It also promised to minimize greenhouse gas emissions in part by not using natural gas to power the liquefaction, but using electricity instead.

James told WHYY that the company plans to use as much renewable energy to power the plant as possible. But the feasibility of that plan is unclear given the enormous amount of energy it takes to cool the methane to negative 260 degrees Fahrenheit at which point it becomes a liquid, capable of loading into a specialized container to ship overseas. Most LNG facilities use between 8-10 percent of the natural gas supply at the plant to power the liquefaction.

Chester’s heavy burden as an environmental justice community

While Penn America LNG has connected with a group of influential local political players to shepherd the project through, it could take several years to navigate a complex federal regulatory process with no guarantee of success.

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Construction of such an immense industrial project in the heart of an environmental justice community still reeling from legacy pollution and current environmental, health, and socioeconomic disadvantages also presents obstacles and challenges for the Biden administration’s own focus on racial equity in siting new industrial facilities.

The administration has pushed to increase LNG exports overseas in the wake of Russia’s invasion of Ukraine, speeding up new permit reviews. An LNG export terminal on the East Coast could be a bonanza if the current market conditions remain. And while natural gas prices have risen recently, the sheer abundance of Marcellus and Utica shale gas, and the lack of pipeline capacity to move it, have producers looking to export. But, experts say there’s no guarantee Europe will continue to need American natural gas.

“It shouldn’t be that surprising if we see a bunch of proposals popping up all up and down the Eastern Seaboard that could potentially access really low cost gas from the Marcellus and be pretty close to Europe,” said Ken Medlock, senior director of the Center for Energy Studies at Rice University’s Baker Institute. “And certainly with everybody’s eyes on Europe and the long term view that Europe is going to move away from Russian gas.” The majority of LNG export facilities are on the Gulf Coast, farther from Europe. But Medlock also said European countries could start tapping gas from North Africa and the Middle East.

Currently, Dominion Energy’s Cove Point liquefaction plant in Lusby, Maryland is the only LNG export terminal on the East Coast drawing from Pennsylvania’s abundant shale gas. Built as an LNG import facility before the shale gas boom, the plant was converted to an export terminal in 2017, and like the half dozen other LNG export terminals in the U.S. is at full capacity. Cove Point ships as much as 5.25 million metric tonnes a year, which is less than Penn America’s proposal.

The proposed site on the Chester waterfront in an industrial area near an old Ford Motor plant borders a densely populated area in a city of roughly 32,000 people that is predominantly Black.

The median household income is less than $33,000 a year. Chester has long been a focus of environmental justice concerns with numerous industrial facilities and major roads placing an inequitable burden on residents compared to their counterparts in more affluent suburbs such as the Main Line.

The Biden administration’s Climate and Economic Justice Screening Tool identifies Chester as a disadvantaged community. It fits the bill in six categories including sustainable housing, legacy pollution, and health burdens.

“The operators are going to have to demonstrate that this is not going to be a detriment to the local population,” said Medlock. “As it starts going through the permitting process, all of those boxes are going to have to be checked. And that might, quite frankly, be the one that keeps it from moving forward.”

The company first has to apply to the Federal Energy Regulatory Commission, which oversees siting and construction of the facility. FERC also has to do an Environmental Impact Statement. The Department of Energy authorizes the exports. Medlock says even if it gets approval by FERC and DOE that’s no guarantee it will move ahead.

“Market conditions can change in 5 to 6 years,” he said. “And what that will mean is the facility that was planned might not look that attractive before it’s even built. And so that means that a project developer might back away. They might have difficulty in securing long-term contracts [to sell the gas], which means they can’t get the necessary financing to make a final investment decision. So these things can delay, delay, delay.”

Several LNG export terminals have been floated for the Delaware River over the past 10 years that did not make it past the planning stage.

‘We will not be prostituted for pollution’: Chester community group vows to fight LNG facility

FERC recently proposed incorporating impacts to environmental justice communities when evaluating new natural gas projects. But it has since gotten pushback from the industry, putting the new guidelines in limbo.

Chester’s environmental justice community has a strong history of opposing industrial projects sited close to residential neighborhoods. Chester Residents Concerned for Quality Living (CRCQL) has battled with the Covanta-owned incinerator in Chester for nearly 30 years. Zulene Mayfield, CRCQL’s founder, said she wasn’t familiar with plans for an LNG export terminal, but said she’s not surprised the company has been quietly working behind the scenes.

“This is what polluters do,” said Mayfield. “They try to line up all their ducks, they try to line up all of the permitting entities, they want to create relationships. They want to get friends and politicians so they can screw over a community. Well, now we know. We know about them — and they better learn about Chester Residents Concerned for Quality Living,” Mayfield said.

She added that the promise of new jobs for city residents is a “guise.”

“We will not be prostituted for pollution. We will not. And any politician that has sent a message that they are amenable and they are in favor of this proposal, they will deal with the communities,” Mayfield said.

Mayfield said that a new LNG export facility would add to the environmental racism already impacting her and her neighbors. She promised that they will “vehemently oppose anything that is detrimental” to public health and the quality of life in the city.

“We will not. We will not allow Penn LNG, Penn America, or whatever entity or whatever name they use to come within the city of Chester,” Mayfield said.

Given the size and operation of the plant, air permits would be required from the Pennsylvania Department of Environmental Protection. Permits for a proposed liquefaction plant in Wyalusing give an indication of the type of emissions expected.  The Wyalusing plant, operated by the Bradford County Real Estate Partners, could generate up to 2.44 million metric tonnes of LNG a year, about one-third of the Chester proposal. Its air permit issued by the DEP details emissions of nitrogen oxides, sulfur dioxides, carbon monoxide, and particulate matter.

Based on the levels of emissions in that permit, Clean Air Council’s Alex Bomstein says he expects the Penn America LNG proposal, if it goes forward, would be one of the largest new sources of air pollution in Southeast Pennsylvania.

“It’s like putting a power plant in downtown Chester,” said Bomstein. “Hundreds of tonnes of particulate matter in such a densely populated area would have huge health consequences.”

Penn America’s James says environmental stewardship is a priority. “With our focus on being the cleanest and most environmentally and socially responsible LNG facility in the world, we will ensure that the community the project is located in will be protected,” wrote James in an email. “The company’s focus is on being a responsible and generous corporate citizen dedicated to making life better for all those nearby as we ensure the local environment is always a priority and safeguarded.”

In addition to air pollution impacting the immediate neighborhood, the plant would add climate-warming carbon emissions to the atmosphere, both through the construction and liquefaction process, and also through upstream natural gas production. A recent report by the Environmental Integrity Project, “Playing with Fire,” details the climate impacts of just the liquefaction operations involved in LNG exports. EIP analyzed 25 planned new or expanded LNG export facilities, four of which are under construction. Together, they would add an additional 90 million tonnes of greenhouse gas emissions to the atmosphere, which the report says is “more than 20 new coal fired power plants or 18 million cars running for a year.”

Campaign contributions, lobbying efforts, and a new nonprofit

Records obtained via Right-to-Know reveal the company has been actively seeking to get local and state officials to back the plan for the past five years. Penn America CEO Franc James has been in touch with Michael Doweary, the state-appointed receiver entrusted with ensuring the financially-hobbled city does not go bankrupt.

Doweary told WHYY News he couldn’t remember much from his meeting with executives from Penn America LNG.

“They did speak to benefits beyond being a commercial, taxpayer business in any area,” said Doweary. “They did speak to community benefits beyond that, but I really wouldn’t be able to get into specifics.”

In a February 2021 email sent to Doweary, James said he met with Gov. Tom Wolf and other members of his administration.

“…We were fortunate to meet with Governor Tom Wolf, Secretary Dennis Davin, Denise Brinley, and key members of the DCED on numerous occasions to disclose and discuss the proposition of developing, permitting and constructing the project in Pennsylvania, specifically the City of Chester,” James wrote in the email.

In a statement to WHYY News, a spokesperson for Wolf said the administration was involved in conversations beginning in 2016 with Penn America to get a grasp of the plans as it would do with any number of projects.

“The administration specifically met with the company once in 2016,” Elizabeth Rementer, Wolf’s press secretary said in a statement. “While the staff that were involved with these discussions have moved on from the administration, based on our review it does not appear that the administration was ever asked for or made any commitment of support to the project, which remains in a development phase.”

Neither Davin nor Brinley responded to a WHYY News request for comment. Both have left the Wolf Administration for the private sector. A spokesperson for the DCED told WHYY News that Acting Secretary Neil Weaver was not aware of any plans for a facility.

James also discussed in emails to Doweary the creation of a nonprofit entity that he said would benefit Chester residents.

“I would also like to disclose the mission of the Penn America Foundation 501(c)(3), a public charity established and solely focused on the City of Chester nurturing education programs, developing and mentoring local entrepreneurism and economic development, and initiatives focused on Chester’s energy insecurity and the environmental challenges,” James wrote.

Penn America Foundation has not had any notable charitable activity to date.

James refers in emails to a “Chester Team” that includes John Linder, the former mayor of Chester who served from 2012 to 2016, James Turner, the city’s former director of economic development, and Travis Thomas, the city’s former fire commissioner. Current Chester Mayor Thaddeus Kirkland did not respond to a request for comment about the proposal.

A handful of individuals and entities currently and previously associated with Penn America LNG donated a combined $5,000 to Chester Mayor Thaddeus Kirkland’s campaigns since 2018. The donations came from former president Cedric Burgher, former vice president Christopher Bellah, Penn America’s current chief development officer Howard Candelet, and current vice president Konstantin Dimitropoulos.

The lobbyist for Penn America Energy, Malady & Wooten, donated $1,000 to Kirkland’s campaign in May 2021.

‘Chester Team’ member wants City to capitalize on LNG, environmentalists have a different view of the future

Former Mayor Linder, a member of the “Chester team,” says he remembers meeting with Penn America LNG near the end of his term in 2016. He is now the chief executive officer of a nonprofit organization he created, the Riverside Futures Regional Community Development Corporation, an organization he says is dedicated to fostering economic development in Chester through LNG and petrochemicals.

On April 5, 2021, several days after Doweary met with Penn America representatives, Linder sent Doweary an email. It contained a letter that Riverside Futures sent to the Delaware Valley Regional Planning Commission advocating for petrochemicals, specifically LNG in Chester and Philadelphia.

Linder and his cousin Garland Thompson, a former Philadelphia Inquirer reporter and the executive vice president of Riverside Futures, have made the pitch that a new LNG plant would be a boon to Chester’s local economy and create jobs. In a blog post and a letter sent to the Delaware Valley Regional Planning Commission, the two wrote that possibilities will arise through the “exploitation of Pennsylvania’s Marcellus and Utica Shale fields.”

Former Chester Mayor John Linder and Garland Thompson stand next to a sign that reads Riverside Futures.
Former Chester Mayor John Linder  (left)and Garland Thompson believe that Riverside Futures is the key to fostering Chester’s local economy and creating new jobs. (Kenny Cooper/WHYY)

“To get there, the Philadelphia region’s municipal leaders have to begin demonstrating the political courage to tell the region’s residents on both sides of the Delaware the practical truth about why natural-gas fired energy really is the fuel of future progress, despite all the wrong-headedly sincere claims some activist groups have made about the world-saving capability of so-called clean-energy programs to power this region’s and this nation’s future economic growth,” the letter read.

Although the letter says “climate change is happening,” they take aim at environmental groups like the Clean Air Council, Sierra Club, the Natural Resources Defense Council, Penn Future, and the Delaware Riverkeeper Network as well as “Delaware Valley media workers” like the Philadelphia Inquirer Editorial Board for trying to keep “gas reserves in the ground.”

“It is long past time the leaders of Greater Philadelphia recognize the real opportunities lying in wait for a city and a region that could and should serve as the most convenient, most economical port for the export of Shale Crescent LNG, when the best fields producing that gas lie less than 200 miles to the northwest in the Endless Mountains region of Pennsylvania, producing cargoes that should properly be headed to North Atlantic and West African ports from Philadelphia, not from Corpus Christi,” the letter read.

Linder and Gardner say they are not getting paid by Penn America LNG. Thompson wants Riverside Futures to lead a job apprenticeship LNG and petrochemicals program.

Former Chester Mayor John Linder stands next to Garland Thompson in front of a gray brick building.
Former Chester Mayor John Linder (left) and Garland Thompson both say they had been exploring liquefied natural gas before Penn America reached out. (Kenny Cooper/WHYY)

“Those jobs pay hundreds of thousands of dollars apiece for an apprenticeship or a two-year community college degree. Lots and lots of people in Chester could make that kind of money and have a nice lifestyle,”  Thompson said.

Ultimately, Linder said that community leaders like Mayfield of CRCQL are right: Chester has an environmental racism problem. But he says Mayfield is the one who is uninformed.

“It’s good to have people who are on point. [Mayfield] is always on point. But on this one, we got to get educated and I’m willing to sit down with them,” Linder said.

Thompson emphasized that there is “no such thing as an easy answer to environmental problems.”

Mayfield, of CRCQL, says all of this reflects a “good ol’ boy system” that operates at the expense of the residents.

“These are politicians,” she said. “We are residents. They’re not scientists. They are so ignorant to these types of processes. They don’t make themselves educated to know what the process is, the harm that it can cause, the benefits, and the risks,” Mayfield said.

The Delaware Riverkeeper’s Maya van Rossum was also unaware of the project before reporters reached out to her. She called Linder’s claims that natural gas is the “fossil fuel of the future” a false climate solution. “You can’t make fracking safe,” she said. “There is no pathway for LNG exports to be part of the climate solution.”

The Delaware Riverkeeper Network is actively fighting the proposed LNG liquefaction plant in Wyalusing and its associated export terminal across the river in Gibbstown, NJ. Van Rossum worries that once one is approved by federal regulators, then the industry will want to use the Delaware River as they do the Gulf Coast, building LNG export facilities along its shores as a quick route to Europe.

“This is what we are seeing consistently in Pennsylvania when it comes to the fossil fuel industry,” she said. “They are going behind closed doors at the local and state level and cutting secret deals and it’s a go before the people even hear about it. And Penn America should be worried about Delaware Riverkeeper opposition because we will be proactively opposed to this project.”

Editor’s note: An earlier version of this story said that Riverside Futures was dedicated to promoting opportunities at the proposed Penn LNG plant. Garland Thompson says the nonprofit is dedicated to all petrochemical opportunities.

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