Why Mariner East 2 Is Essential to Southeast PA – Part II

CELDF - report on Mora countyTom Shepstone
Shepstone Management Company, Inc.


The economic benefits of the Mariner East 2 Pipeline for Southeast PA go far beyond the $9 billion of construction impacts. There is much, much more there.

Yesterday, I excerpted parts of a guest post on Marcellus Drilling News from Garland L. Thompson extolling the economics of the Mariner East 2 to Southeast PA. My post also included material from another MDN piece on the role of the Mariner East 2 in maintaining stable propane prices in the Philly region. Earlier in the week, a new study was also released by Econsult Solutions addressing the huge economic benefits of the project with respect to pipeline and associated industrial development. The study was summarized here, but the focus was all on construction benefits. They are but the beginning.

A news story in the Delaware County Daily Times was typical of the reporting on the Econsult study regarding Mariner East 2 benefits. It covered the construction impacts, which are huge, other construction activity associated with the project and all the multiplier effects. They add up to a cool $9 billion in benefits.

The real economic benefit to the region, though, is in the kinds of things I discussed in yesterday’s post. The Econsult study speaks to those as well, although few reporters have focused on them. Consider these excerpts from the back section of the report (Chapter 5) about the natural gas liquids (NGLs) Mariner East 2 will deliver:

The U.S. NGL production market has changed considerably over the last several years as US production increases, low natural gas prices are causing companies to explore more opportunities in the NGL markets, and new infrastructure and capital investment are creating more opportunities for NGL extraction, distribution, and use as feedstock in manufacturing and industrial process. Production of propane, butane and ethane has increased and is forecasted to continue to increase in the US (see Figure 5.1).

The expansion of the Mariner East pipelines and the introduction of the Revolution Project will greatly increase the transportation, storage, and distribution capacity of NGLs in southeastern Pennsylvania, creating a supply for home and commercial heating and manufacturing and industrial feedstocks. In addition, MHIC has become the major distribution center for NGLs from Marcellus shale, and is helping create new opportunities for the US economy.

Mariner East 2

NGLs are an important input in manufacturing regionally and worldwide. The new service delivery will permit businesses in the state to have easier access to NGL inputs. Additional business and job opportunities may become available in the state due to the stabilized regional supply of NGL. The Commonwealth is poised to regain some of its prominence as a manufacturing hub by adapting to the available supply and proximity of NGLs from the Marcellus shale.


…the Mariner East pipelines makes the transport of propane in Pennsylvania more efficient, reduces transportation costs, and could help stabilize the retail price of propane in Pennsylvania. Propane is most commonly used for residential central heating, with higher demand in the winter.

The winter of 2013-2014 was especially harsh for the Northeast and demand for propane increased dramatically while the supply plummeted, accounting for a 33 percent price increase from approximately $3 per gallon to $4 per gallon (see Figure 5.2). More than 30 states declared emergencies and loosened trucking regulations to ease propane deliveries from the Gulf Coast and other areas where the propane was being processed from natural gas. As can be seen in Figure 5.2, residential propane prices reached an all-time high that winter. Since, prices have reduced to below $3 per gallon in 2016 and have seen a modest rise to under $3.50 a gallon in 2017.

Mariner East 2

The additional barrels of propane delivered to and soon to be produced at MHIC [Marcus Hook Industrial Complex] will boost the region’s reserves, easing supply constraints during the peak heating season. The fractionation facility’s extraction of propane from the NGLs shipped to MHIC will allow for a quicker response to regional propane demand during extreme weather events.

As the supply grows and prices stabilize, it is forecasted that more new residential construction will be outfitted to have propane heat and existing homes and businesses will convert to propane heat in the northeast region of the U.S. The largest demand driver is forecasted to be residential use.


Ethane is primarily used as a feedstock to produce ethylene, which is used in plastics manufacturing. The US is seeing dramatic changes in the ethane market as its use as a feedstock to produce ethylene is forecasted to greatly increase. This is due to the recent dramatic expansion of ethane crackers in the US, with nine plants just completed or under construction in 2017, four expansions, one restart, and six more proposed…

The great supply of ethane is also creating other opportunities at MHIC.

  • It will have another first for the US as ETP develops an ethane distribution facility that will prepare and load refrigerated ethane for truck delivery.
  • Once completed, Mariner East 2 will deliver ethane to the Competitive Power Ventures power plant in Cambria County, PA. Construction began on the ethane and natural gas fired power plant in October 2017 and will generate electricity for more than one million homes in the Commonwealth.


Butane production [on the East Coast] was stable for 30 years until its production increased by more than 600 percent in 2015 (see Figure 5.6). Butane is not as heavily used as a petrochemical feedstock as ethane or propane…

Mariner East 2

Like ethane and propane, supply of butane greatly increased in the Commonwealth. It can be transported by the Mariner East pipelines, processed at the fractionation facility, and distributed from MHIC. This presents more possibilities for the Commonwealth in the petrochemical, fuel, and energy markets.

Although these parts of the Econsult study don’t include the type of quantification associated with other economic impacts, it’s clear these contributions will absolutely dwarf that $9 billion. It’s all about whether a revitalized petrochemical industry will have an opportunity to succeed in Southwest PA or not; whether Greater Philadelphia will have its chance to be the next Houston or not.

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