Wednesday, May 27, 2009

Greater Pittsburgh Energy Economy

We know that eds and meds have helped Pittsburgh to ride out the Great Recession. We also know that some more economic diversification will be necessary for prosperity in the near future. The CEO of the Allegheny Conference on Community Development, Dennis Yablonsky, has identified a good prospect:

"Our energy economy represents one of the best opportunities for growing this economy in the next 10 years," said Yablonsky.

He cited the promise of the Marcellus Shale formation — a natural-gas formation that underlies two-thirds of the state, as well as the region's coal resources. The coal industry, especially for power generation, "isn't going away anytime in the near future," he said.

Yablonsky also touted the energy expertise available at some of the region's 35 colleges, as well as at many local companies. He cited the wind-power business at PPG Industries Inc. and the energy-supply business of Eaton Electrical Group in Moon.

"We have a lot of energy companies here to develop an energy-supply chain," he said.

Perhaps a victim of selective quoting, Yablonsky failed to mention Westinghouse and the nuclear power industry. Regardless, the bet is a good one. As global demand recovers, energy prices will rise (perhaps even soar). Conventional and alternative means of production are Pittsburgh strengths.

Chris Briem's story about "Energy-burgh" in 2005 outlined this future. I also see a few tidbits about Pittsburgh-based energy companies every week. In fact, Southwestern PA companies are serving as a economic revitalization model for other Rust Belt cities:

"There's no reason we can't retrofit to build the components," he said. It's like retooling a car plant to make a new model. Gamesa, a Spanish company that makes large wind turbines, bought a steel mill in Pittsburgh that was closed and reopened it, making the turbines. It employs 1,000 people.

Futurist Jeremy Rifkin calls renewable energy the "third industrial revolution." Everyone is diversifying into it. There's a two-year backlog in wind turbines.

This is something we can do. Green energy companies are already scouting Windsor. The city need jobs and diversification. The world needs clean, renewable energy.

To help you visualize the potential, I'll end with a map:

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