Less than a week after state regulators shut down construction of the Mariner East 2 pipeline, a consultant for Sunoco Pipeline on Monday updated its estimated economic impact of the project to $9.1 billion — assuming the company is able to resume construction.
Sunoco Pipeline LP and its parent company, Energy Transfer Partners LP (ETP), are spending $5.1 billion over five years in Pennsylvania on the Mariner East system, including pipelines and reconstruction of a former refinery in Marcus Hook, according to the report by Econsult Solutions, a Philadelphia firm hired by Sunoco.
Econsult more than doubled its 2015 estimated direct and indirect economic impact of the Mariner East project from $4.2 billion to $9.1 billion, attributing the higher estimate to the addition of a third pipeline, as well as the construction of a gas-liquids processing facility in Marcus Hook.
In addition to the one-time economic boost during construction, the associated projects will produce $140 million to $210 million of ongoing annual economic impact in Pennsylvania, according to the report.
The report was released only a few days after the Pennsylvania Department of Environmental Protection halted construction on the Mariner East 2 pipeline to correct "egregious and willful violations," including unauthorized drilling to install the pipeline and failing to notify the agency when discharges or spills of drilling fluid occurred.
Sunoco said the release of the economic-impact report update was in the works before the DEP suspended its construction permits, and is unrelated to the state action.
"We are working with the Pennsylvania Department of Environmental Protection to fulfill the requirements of the Jan. 3 order as quickly as possible, so we may resume construction promptly," said Jeff Shields, a Sunoco Pipeline spokesman.
An environmental group organizing local pipeline opponents, Food & Water Watch, dismissed the report as "dubious research," and said its release "should not distract us from the life and death safety risks the Mariner East pipeline poses to our communities."
The report underscores a major reason why the Mariner East project has enjoyed strong support from political, business, and labor leaders, who regard it as a major investment to channel the Marcellus Shale output through Pennsylvania, and potentially induce additional economic growth.
The Pennsylvania Energy Infrastructure Alliance, a labor and business coalition that supports the build-out of pipelines, said Monday that the Econsult report validates its argument that the Mariner East project is good for the state's economy.
The Mariner East system is designed to carry gas liquids — propane, butane, and ethane — from the shale region of Western Pennsylvania, Ohio, and West Virginia to a terminal that Sunoco has built on the site of the former Marcus Hook refinery.
The original Mariner East pipeline is an 80-year-old conduit that previously carried refined fuel such as gasoline from the refinery to Pennsylvania outlets. It was reconfigured n 2014 to carry gas liquids, which are valuable materials associated with natural gas production used in the production of petrochemicals. Much of the material is being exported to Europe.
The Mariner East 2 pipeline, whose construction was suspended last week, is largely adjacent to the older pipeline and would dramatically expand the system capacity. Sunoco also has commitments to add a third pipeline to the route as soon as the ME2 is completed.