THE MONTHLY MAGAZINE OF THE AMERICAN GAS ASSOCIATION MARCH 2015 AMERICANGAS
WILL A SMALL U.S. CITY BE THE FIRST TO SOLVE THE WORLDWIDE PROBLEM OF ENERGY EFFICIENCY? 28
ARE YOU USING SOCIAL MEDIA THE RIGHT WAY? 34
‘IT ALL COMES DOWN TO BALANCE’: A CONVERSATION WITH SENATOR AND ENERGY LEADER LISA MURKOWSKI Is Your System Standing Up to EXTREME CONDITIONS?
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AMERICANGAS VOLUMEAMERICAN 97 NUMBER GAS 2 MARCH 2015
FEATURES
Cover Story 20 “It All Comes Down to Balance” From growing up in Alaska to her energy policies, Republican Senator Lisa Murkowski shares what will guide her in her new role as chair of the U.S. Senate Committee on Energy and Natural Resources.
Feature 28 A Race for the Prize BY ADAM FOLK Over the next two years, communities across the U.S. will work with local distribution companies to improve energy efficiency as they compete for the Georgetown University Energy Prize. 20
PIPELINE STATE WATCH BURNER TIPS
Plugged In 5 Industry 7, 9 Hawaii 15 Social Media 34 Executives aren’t worried about Compressed gas liquid could The power of a simple thank-you is natural gas or oil supplies in U.S.; multiplied when you factor in social Digest 6 increase the reliability of the state’s Bidirectional pipeline capacity is media, says E Source’s Kim Burke. Schools cut costs by switching synthetic natural gas operations. on the upswing. Here’s how to use social media to to natural gas; Argentina boosts Colorado 16 offshore oil and natural gas produc- engage with customers, increase Ice cream and hydraulic fracturing their satisfaction and build tion; UGI brings Utica Shale gas to NGV 10 have more in common than you your brand. Pennsylvania; and more. Natural gas transportation fuel is still might think. trending up.
Fresh Ideas 6 Missouri 16 DEPARTMENTS Waste Management heats homes, By the Numbers 11 Kansas City is gung ho for natural businesses with repurposed President’s Message 2 When winter weather rolls in, more gas vehicles, and it’s not done yet. It’s our role to continue to remind landfill gas. households turn to natural gas for heat. policymakers at every level that New Jersey 17 direct use of natural gas has Customer Service 7, 8 People 12 Reducing a surcharge on the state’s positive environmental and efficiency 2014 Utility Customer Champions utility bills would help residential share a common factor; benefits. Places 13 and business customers. Pennsylvania PUC lowers barriers Jobs 32 to LDC expansion. North Carolina 18 State-supported grants are Advertisers’ Index 35 cleaning up polluted air in metropolitan areas. Making a Difference 36 A PG&E employee and veteran is West Virginia 18 honored to serve as a guardian for A five-year field study hopes to the Honor Flight program. uncover greater efficiencies in shale gas development.
COVER PHOTO AND ABOVE PROVIDED BY SEN. LISA MURKOWSKI (R-ALASKA)
MARCH 2015 AMERICAN GAS 1 It’s our role to continue to remind policymakers at every level that direct use of natural gas has positive environmental and efficiency benefits, thus reducing barriers and giving consumers, businesses and our nation a clear advantage.
PRESIDENT’S MESSAGE BY DAVE McCURDY
BUILDING CONSENSUS ON A NATIONAL LEVEL
oday, more than 177 million Americans use preserve its natural beauty. In these pages, she restates her belief natural gas to heat their homes, warm their water in an American energy sector that provides jobs and high wages and cook their food, and they understand the and allows her constituents to live, work and play in a state that comfort, affordability and reliability of this abun- her family has called home for three generations. dant domestic resource. We continue to remind Avid readers might recall that we featured Sen. Murkowski in policymakers at every level of the environmental the November 2011 issue of American Gas. She reflects now on and efficiency benefits of the direct use of natural what has changed since then, noting that “the role of natural gas gas. Whether it is the administration’s Clean within the nation’s energy policy has grown stronger than ever.” Power Plan, the U.S. Department of Energy’s In February 2013, the senator released the broad-ranging energy codes for appliances and buildings or an uneven playing field for policy blueprint Energy 20/20. She is quick to point out that this natural gas transportation, we are pushing to reduce barriers to document is meant to serve as the beginning of a conversation Topportunities where the benefits of natural gas can give consum- about how policy can be shaped in the next few years to make ers, businesses and our nation a clear advantage. energy “abundant, affordable, clean, diverse and secure.” That is a In this month’s issue of American Gas, we profile U.S. Sentor Lisa discussion that we are happy to be a part of. Murkowski from Alaska, one of the preeminent voices on Capitol After some difficult times for our nation, there is good news, Hill advocating for efficient and effective use of our nation’s natu- starting with a burgeoning energy sector driving an economy that ral resources. In the new Republican majority, Sen. Murkowski is has shown growth and resilience. Still, there are many areas where now chair of the Committee on Energy and Natural Resources. we need to invest assets and attention to ensure prosperity and We are glad to have this unique opportunity to hear her thoughts opportunity for future generations. u on the role that energy—specifically natural gas—plays in moving our nation forward. The production, transportation and delivery of energy was a part of my upbringing in Oklahoma. I think that is similar in Alaska, where energy is a way of life. That is reflected in Sen. Murkowski’s leadership as she advocates with great passion for constructive energy policies that benefit our entire country and President and CEO, [email protected]
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MARCH 2015 AMERICAN GAS 3 THE MONTHLY MAGAZINE OF THE AMERICAN GAS ASSOCIATION AMERICANGAS
EDITORIAL DIRECTOR EXECUTIVE EDITOR ART DIRECTOR Tracy L. Burleson Kelly Crane Winkler Jordan Sitler [email protected] 202/824-7229 SENIOR EDITOR SUBSCRIBER CUSTOMER SERVICE Danielle Wong Moores 866/512-3111 CONTRIBUTING EDITORS fax: 845/267-3478 Michael Murray MANAGING EDITOR [email protected] Jennifer O’Shea Lori B. Racey ADVERTISING CIRCULATION MANAGER ASSISTANT MANAGING EDITOR Justin Wolfe Sherri R. Hamm Melanie Bracey The YGS Group [email protected] 717/430-2238 [email protected]
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BOARD OF DIRECTORS
OFFICERS DIRECTORS Scott L. Morris, Avista Corp. Michael Noone, SourceGas CHAIRMAN OF THE BOARD Craig L. Adams, PECO Energy, an Exelon Co. Morgan K. O’Brien, Peoples Natural Gas Terry D. McCallister, WGL Holdings Inc. Dennis V. Arriola, Southern California Gas Co. Scott M. Prochazka, CenterPoint Energy Robert F. Beard, UGI Utilities Inc. Ian Robertson, Algonquin Power & Utilities Corp. FIRST VICE CHAIRMAN Lawrence T. Borgard, Utilities, Integrys Energy Group John G. Russell, CMS Energy Corp. Ralph A. LaRossa, Public Service Electric & Gas Co. Carl L. Chapman, Vectren Corp. Suzanne Sitherwood, The Laclede Group Inc. Kim R. Cocklin, Atmos Energy Corp. Robert C. Skaggs, Jr., NiSource Inc. SECOND VICE CHAIRMAN Laurence M. Downes, New Jersey Resources Thomas E. Skains, Piedmont Natural Gas Co. Inc. Pierce H. Norton II, ONE Gas Inc. Jeffrey E. DuBois, South Jersey Gas Co. Ronald J. Tanski, National Fuel Gas Co. Gordon L. Gillette, Tampa Electric and Peoples Gas John W. Somerhalder II, AGL Resources IMMEDIATE PAST CHAIRMAN Kimberly J. Harris, Puget Sound Energy Gregg S. Kantor, NW Natural John P. Hester, Southwest Gas Corp. Glenn R. Jennings, Delta Natural Gas Co. Inc. ADVISORY PRESIDENT & CEO Ronald W. Jibson, Questar Corp. DIRECTORS Dave McCurdy, American Gas Association Christopher P. Johns, Pacific Gas and Electric Co. Patricia L. Kampling, Alliant Energy David J. Devine, Kinder Morgan Inc. GENERAL COUNSEL Thomas B. King, US, National Grid Julie A. Dill, Spectra Energy Corp. Kevin B. Belford, American Gas Association Steven E. Kurmas, DTE Energy Gordon L. Gillette, Tampa Electric and Peoples Gas Kent T. Larson, Xcel Energy Inc. Patricia L. Kampling, Alliant Energy CORPORATE SECRETARY James P. Laurito, Central Hudson Gas & Electric Corp. Rodney O. Powell, Northeast Utilities Gary W. Gardner, American Gas Association Diane Leopold, Dominion Energy William C. Stephens, ATCO Gas Richard J. Mark, Ameren Illinois Ronald J. Tanski, National Fuel Gas Co. CHIEF FINANCIAL & ADMINISTRATIVE OFFICER Kevin Marsh, SCANA Craig E. White, Philadelphia Gas Works Kevin M. Hardardt, American Gas Association John McAvoy, Consolidated Edison Inc. Michael P. McMasters, Chesapeake Utilities Corp.
The American Gas Association, founded in 1918, represents more than 200 local American Gas provides natural gas industry professionals with the information they need ANNUAL SUBSCRIPTION: $59 domestic (United States), $110 foreign. Single copies, energy companies that deliver clean natural to enhance their effectiveness and that of their companies by publishing leading-edge $7.50 each domestic, $12.50 each foreign. Periodicals postage paid at Washington, reports on the industry and on American Gas Association activities that offer value to D.C. and at additional mailing offices. gas throughout the United States. More than its members. POSTMASTER: Send address changes to American Gas, P.O. Box 317, Congers, NY 72 million U.S. residential, commercial and American Gas (ISSN 1043-0652) is published monthly (except for bimonthly August/ 10920-0317. industrial customers use natural gas; 94 September and December/January issues) by the American Gas Association, 400 N. REPRINTS: For high-quality reprints of articles to use in your education, promotional or sales percent—more than 68 million customers— Capitol St., N.W., 4th Floor, Washington, D.C. 20001. Phone numbers: advertising, efforts, including electronic reprints, contact Cindy Eyler at Sheridan Reprints at 717/632- 717/430-2218; editorial, 717/430-2397; circulation, 866/512-3111; fax, receive their gas from AGA members. Natural 3535, x8008 or [email protected]. ©2015 American Gas Association. gas meets almost one-fourth of the United 845/267-3478. Statements of fact and opinion herein are the responsibility of the authors and advertisers alone and do not imply an opinion or endorsement on the part All rights reserved. Reproduction in whole or part without written permission is prohibited. States’ energy needs. Visit us at www.aga.org. of the American Gas Association.
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4 AMERICAN GAS MARCH 2015 IN THIS SECTION Trust leads to higher customer service ratings 7 Reducing barriers to LDC expansion 8 Bidirectional pipeline capacity is on the upswing 9
The ALINA leak-detection software finds leaks without costly fiber-optics or the AMERICAN GAS hassle of digging up miles of pipeline.
PLUGGED IN New software to detect pipeline leaks pays more software point of view?’ It’s much more economi- attention to pressure flow than previous software cal because you don’t have to lay something along models, potentially preventing serious explosions the pipeline; you just have to look at your meters,” and saving the industry millions of dollars. Valtinson told American Gas. “We take the data from the pressure and flow Along with former University of Oklahoma meters and put it through a software statistical engineering professor Miguel Bagajewicz, who spe- model we developed to compare it to known cializes in instrumentation and data reconciliation, thresholds for leaks. From that information, you Valtinson researched, developed and tested the can know whether there is a leak or there is not a software model, then reported on it in a recent issue leak,” explained Gary Valtinson, a process design of Industrial & Engineering Chemistry Research. Ac- engineer in Norman, Oklahoma, and a recent cording to their data, the technique detected small graduate of the University of Oklahoma. Previ- leaks and reduced errors from 21 percent to ous software models have focused on flow and 3 percent when compared with existing software. have not accurately measured pressure drops in “It’s pretty exciting. Our hopes are to get it pipelines, which has led to errors, he said. into the industry,” Valtinson said. “Your best equipment to detect leaks is The software-based method, called ALINA, hardware—fiber-optic cables—but those are very is available through OK-Solutions (www.ok- expensive. For pipelines that are already in place, solutions.org) and can be used as an Internet-based it requires digging them up to attach the cables. service or as an in-house installed software. We thought, ‘What if we looked at it from a —Carolyn Kimmel
MARCH 2015 AMERICAN GAS 5 FRESH IDEAS treated and then injected into the Ameren Illinois pipeline rather than burned in a flare onsite,” Paul A New Day Pabor, vice president of renewable energy at Waste AMERICAN GAS Management, told American Gas. “That makes this Waste Management heats homes, new facility something to celebrate from both an businesses with repurposed landfill gas environmental and a business perspective.” An existing Milam Landfill-Gas-to-Energy DIGEST facility produces 2.4 megawatts of renewable t’s a new day—a new renewable day—for energy. The output from this power plant is The New Stanton toll plaza is now landfill gas processed at the Renewable Natural now directly connected to the new Renewable the first of 17 plazas on the IGas Facility operated by Texas-based Waste Natural Gas Facility, providing the power needed Pennsylvania Turnpike to Management at its Milam Landfill in Fairmont to run the new facility, the company said. offer compressed natural City, Illinois. Waste Management says it anticipates a 60 per- gas for passenger and commer- According to Waste Management, the facility, cent reduction in emissions of carbon monoxide, cial vehicles. The Sunoco-brand which was undergoing the commissioning process nitrogen oxides and particulate matter because the dispensers are the first natural in December, creates pipeline-ready natural gas from gas is treated rather than burned onsite. gas offering in Pennsylvania since the landfill gas produced at Milam, which can then The new $19 million facility was partially the 1990s, according to officials. be injected into the Ameren Illinois pipeline for uses funded by a $2.4 million grant from the Illinois Honda is the only company mak- such as heat for homes or fuel for trucks and other Department of Commerce and Economic ing passenger vehicles that utilize equipment that run on compressed natural gas. Opportunity and the Illinois Energy Office. CNG, but others will soon follow The Milam Renewable Natural Gas Facility is Officials at Ameren Illinois said the collabo- suit, said Rick Price, executive designed to process about 3,500 standard cubic ration with Waste Management on the renew- director of Pittsburgh Region Clean feet per minute of incoming landfill gas—or as able gas facility fit with its own mission. Cities. Businesses are the most much gas as it takes to fuel about 200 Waste “Operating in an environmentally responsible prevalent users of CNG—espe- Management CNG collection trucks each day, manner is one of Ameren Illinois’ core values and cially for transit buses and large company officials said. it’s important to our customers,” said Richard J. trucks—due to its economic and “The Milam Renewable Natural Gas facility Mark, president and CEO of Ameren Illinois. environmental benefits. will reduce landfill air emissions as the landfill gas is Waste Management also operates two other
United School District near Johnstown in western Pennsylva- nia is looking to cut costs by Waste Management’s CNG vehicle is in front switching to natural gas. The of Milam’s renewable natural gas facility in district would save approximately Fairmont City, Illinois. $225,000 a year on fuel by switch- ing from oil to natural gas, accord- ing to Dave Kramer, an account executive with Schneider Electric. Current gas lines would need to be extended about two miles to reach the district at a cost of about $227,000 in addition to fees for permits. Kramer estimated it could take more than a year to complete the permitting and construction to connect the school district, but after two years United should see a return on the investment.
YPF, a state-run energy company in Argentina, and Chile’s state-owned company ENAP have agreed to PHOTO PROVIDED BY WASTE MANAGEMENT PHOTO PROVIDED BY WASTE
6 AMERICAN GAS MARCH 2015 DIGEST plants that convert landfill gas to natural gas in is perceived and strengthen utility-customer jointly invest about $200 Ohio and California, where the company collabo- relationships, according to Market Strategies. million to boost offshore oil rated on the world’s largest plant to convert landfill Notably, by region, Oberle observed: and natural gas production gas to ultra-low-carbon liquefied natural gas. • East: New Jersey Natural Gas stands out in southern Argentina. The goal on how it presents its service options as is to ramp up gas output from bundles that focus on true benefits. 2.4 million cubic meters/d to 4 CUSTOMER SERVICE • Midwest: CenterPoint Energy-Midwest million over the next three years stands out as a leader in the utility industry and increase the output of associ- in offering value-added home services and ated liquids from 5,000 b/d to Whom Do You Trust? products that date back to its days as 7,000 b/d, according to YPF. The 2014 Utility Customer Champions share Minnegasco. partnership allows the companies a common factor • South: PSNC Energy is rated the most to share financing and accelerate credible communicator in the utility this expansion. The project will be ore than 37,000 residential natural gas industry—electric or gas. carried out at Magallanes, a block and electric customers cast their votes for • West: NW Natural posts the highest envi- in the South Atlantic off the coast of Mthe 2014 Utility Customer Champions, ronmental champion score of any natural Tierra del Fuego, the southernmost which were named by Cogent Reports, a division gas utility. province of Argentina. of Market Strategies International. The winners are industry leaders in building Kansas City-based CorEnergy customer trust, delivering excellent service and INDUSTRY Infrastructure Trust Inc. has ac- offering extra products and services that make con- quired a natural gas pipe- sumers feel they were getting more for their money. line that supplies Laclede All 48 utilities named Customer Champions— Clear Skies Ahead Gas Co., which serves the 19 gas utilities, 19 electric utilities and 10 com- Industry executives: No worries for natu- St. Louis area, and Ameren bination utility providers—received Engaged ral gas or oil supplies in U.S. Missouri, which has custom- Customer Relationship index scores of at least ers in eastern and central 710 out of a possible 1,000 points. The composite Missouri. The pipeline, formerly score takes into account separate measures for here will be plenty of natural gas to meet owned by St. Peters-based MoGas operational satisfaction, product experience and the country’s needs, and the U.S. will likely Pipeline LLC, is 263 miles long brand trust. Tbe self-sufficient in oil within the next and cost CorEnergy $125 million. Trust, as you might guess, is paramount to decade, according to the responses of industry It runs from northeast Missouri customers. Interestingly, it wasn’t enough to be executives polled by consulting firm Deloitte in and extends into western Illinois excellent at delivering the product that consum- its 2014 Oil & Gas Survey. and mid-Missouri. At press time, ers had paid for, the process revealed. Responses were overwhelmingly positive on CorEnergy planned to issue 13 “Our research finds that 53 percent of rat- a range of topics included in the survey, such as million shares of common stock to ings utility customers provide on operational expectations for energy self-sufficiency, price and partially finance the sale. satisfaction are influenced by how highly they industry profitability, capital outlays and mergers rate their utility on brand trust. Therefore, and acquisition activity, regulatory issues and the Blu Liquefied Natural Gas, a brand trust becomes as important to manage broadening of the North American Energy Renais- company that supplies the resource as service metrics,” Chris Oberle, author of the sance. The 252 professionals surveyed by Deloitte to Nampa, Idaho, has formed report, told American Gas. “Customers lacking were in a managerial or similar role and had an aver- a campaign to recognize brand trust do not rate their gas utility high age of 21 years’ experience in the industry. southern Idaho farmers even when they have accurate bills, no service The majority of those surveyed said they who use natural gas, calling interruptions and no safety issues. In fact, believe the U.S. energy situation has improved in them leaders of a “revolution.” customers without service issues still score 300 the last five years, and four out of 10 executives The Treasure Valley Clean Cities points lower than the utility industry average if said the energy situation is much better than five Coalition, Lt. Gov. Brad Little and they lack brand trust.” years ago. a Blu representative all met at the The Utility Trusted Brand & Customer Ninety percent of respondents believe that Blu-owned station to acknowledge Engagement™ study by Cogent Reports is a new rising domestic production will provide enough farmers and fleet operators who industry-leading body of research that enables affordable natural gas supply for new demand made the switch to natural gas. gas and electric utilities to benchmark perfor- sources such as power generation, the chemicals “McNabb Farms here in Idaho, mance, target improvements on how their brand industry, the manufacturing sector, a growing Continued on page 8
MARCH 2015 AMERICAN GAS 7 DIGEST
Continued from page 7 Columbia Gas joins a growing number of utilities as well as Funk Farms and RTTI, offering customers the option of paying for line these fleets have really led the extensions in their monthly bills instead of a large AMERICAN GAS charge and taken a bit of a risk upfront payment. and it’s paid off for them,” said Zachary Wester of Transfuel Blu LNG.
“Benefits of Natural Gas Produc- tion and Exports for U.S. Small Businesses,” a November 2014 study conducted by the Small Business and Entrepreneurship Council has discovered that small and midsize energy companies are growing at a faster rate than the rest of the economy. From 2005 to 2012, when the U.S. employ- ment market lost 378,000 jobs, the energy companies––including the gas extraction, wells, opera- tions, pipeline construction and manufacturing sectors––gained 293,000 jobs. While other small businesses during this time frame struggled, the study concluded that small businesses in the energy sectors grew between 4.9 and 31.3 percent. The SBE Coun- number of natural gas-powered vehicles and CUSTOMER SERVICE cil is optimistic that these numbers export markets. will continue to climb, thanks in Perhaps one of the biggest revelations of the part to expansion of American survey came in the share of respondents who said Pay As You Go? LNG exports. they believe the U.S. has achieved energy security, which jumped from 12 percent in 2012 to nearly PUC lowers barriers to LDC expansion Danville Public Schools in 40 percent in the current survey. Danville, Virginia, is seeking al- The study showed an attitude of contin- Columbia Gas of Pennsylvania Inc. pilot ternate bus fueling options ued enthusiasm for the potential of U.S. shale. program approved by the Pennsylvania in the form of natural gas Sixty-six percent of respondents believe that A Public Utility Commission will provide a to save on next year’s budget. technological advancements in shale extraction new way to bring natural gas service to those who Interim Superintendent Kathy have improved the economics of shale. Some request it. Osborne said the school district 44 percent point to the smaller environmental “Many potential customers will have an is considering partnering with footprint of shale as a significant improvement, option to pay for their line extension over a period CNG Technologies to switch from while 39 percent believe freshwater recycling has of 20 years rather than the upfront payment that diesel fuel to natural gas. Osborne improved, according to Deloitte. Columbia Gas has historically been required to says the district was influenced to Deloitte officials say the 2014 survey’s marked charge,” said Mark Kempic, president of Colum- consider the switch by the success sense of optimism might need to be tempered a bia Gas of Pennsylvania. “For example, a customer of other school districts and local bit, however, by events that took place after the paying the maximum monthly rate of $35 under communities that work with CNG, October polling of executives, including an almost the new tariff would have been required to provide including Washington, D.C., 15 percent drop in global prices for crude oil, the an upfront payment of more than $4,000 under which operates close to 500 natu- Republican sweep of midterm elections and a ban the previous tariff.” ral gas buses. The school district is on hydraulic fracturing in Denton, Texas. Since the PUC approved Columbia Gas of
8 AMERICAN GAS MARCH 2015 DIGEST
Pennsylvania’s New Area Service program on Columbia Gas proposed the New Area Ser- optimistic that a switch to natural Oct. 23, Pennsylvania residents in the company’s vice program in an effort to make natural gas ser- gas will shrink its $2.2 million service territory have begun to explore this new vice more accessible to Pennsylvanians not cur- transportation budget. option to pay for the extension of pipelines to rently served by natural gas energy, Bedell said. access natural gas, Kempic said. In many cases, the economic analysis shows that Borton-Lawson Engineering in “The commission’s initiative in approving this a large upfront payment is needed for Columbia Wilkes-Barre, Pennsylvania, is on program furthers the goal of making natural gas Gas to extend its main lines, which can deter a mission to save gas compa- more readily available to residents of Pennsylvania, customers from choosing natural gas service. nies time and money and the second-largest producer of natural gas in the This is particularly true when the customer is a simplify the assembling of country,” he said. “Natural gas can be as much as significant distance from the company’s existing well pad equipment. The firm 40 percent less expensive than other home energy facilities, he said. designed a 3-D computer model to choices, so now is a great time to be a natural Columbia’s program joins other similar proj- show natural gas contractors how gas customer.” ects launched by utilities such as Pennsylvania’s well pieces fit together. According In 2013, Columbia Gas had 77 projects for UGI Utilities Inc. and Southern Connecticut to B.J. Cline of Cabot Oil and Gas, gas service that did not go forward, all of which Gas Co., Connecticut Natural Gas Corp. and this model shortens the assembly had upfront deposits due, according to Russell Yankee Gas in Connecticut. time by as much as 10 days, Bedell, manager, communications and commu- which saves gas companies close nity relations for Columbia Gas of Pennsylvania to $1 million. It also allows resi- and Maryland. The costs to add new service INDUSTRY dents to reap the benefits of natural can vary due to a number of factors, including gas heating that much faster. Cline the diameter of pipe needed to extend facilities, said a pad in Springville near distance from facilities and geographical nature Two is Better Than One Scranton “alone can pretty much of the area involved. Bidirectional pipeline capacity is on give gas for tens of thousands of the upswing families, [and] for any days we get extra, it’s that many more houses we can heat.” purred by underutilized pipelines and grow- ing natural gas production in Pennsylvania, Utica Shale natural gas is traveling SWest Virginia and Ohio, the natural gas a long way from its play in eastern pipeline industry plans to modify its systems Ohio to fuel homes in north-central to allow bidirectional flow to move up to 8.3 Pennsylvania. UGI Utilities Inc. billion cubic feet per day of natural gas out of connected its distribution the Northeast, according to the U.S. Energy pipeline to a Utica well in Information Administration. Tioga County to make what The industry plans to expand existing systems UGI refers to as a “historic and build new systems to transport natural gas direct interconnection.” This produced in the Northeast to consuming markets partnership will provide natural gas outside the region. In addition to bidirectional to UGI customers in the Tioga area, pipeline projects, the industry plans to build 35 which includes more than 50,000 Bcf/d of additional capacity to support the growth homes. Many homes in the area of natural gas production in the Northeast. are switching to natural gas from ANR Pipeline Co., Tennessee Gas Pipeline oil or propane. This increase in Co., Texas Eastern Transmission and Transcon- demand for natural gas makes the tinental Gas Pipe Line Co. plan to send natural connection that much more timely. gas from the Northeast to the Gulf Coast because of the potential for industrial demand and LNG Florida Power & Light Company exports. These projects total 5.5 Bcf/d of flow ca- is joining a growing number of pacity. In addition, the Rockies Express Pipeline’s utilities looking at investing in shale partial bidirectional project, with 2.5 Bcf/d of gas reserves. It has proposed a Bidirectional flow pipelines are moving capacity, will flow Marcellus natural gas to mar- partnership with PetroQuest Energy natural gas to where it’s most needed. kets in Chicago, Detroit and the Gulf Coast. Inc., a natural gas production The Iroquois Gas Pipeline’s bidirectional project Continued on page 10
MARCH 2015 AMERICAN GAS 9 DIGEST
Continued from page 9 (0.3 Bcf/d of capacity) will deliver natural gas Sales of natural gas-powered trucks company based in Louisiana with from the Marcellus to Canada. Iroquois will re- continue to grow. operations also in Oklahoma, ceive gas from the Dominion, Constitution (ex- AMERICAN GAS Texas and other Gulf Coast loca- pected service in 2016) and Algonquin pipelines. tions. The partnership would help The EIA noted that modifying existing lower energy costs for FPL pipelines to enable bidirectional flow requires customers over the course of the significantly less capital investment, fewer regula- 50-year project. FPL spokeswoman tory permits and lower construction and labor Sarah Gatewood suggested the costs, while resulting in fewer environmental project will save customers $50 impacts. The move to bidirectional can be done million to $100 million. Gatewood quickly to respond to new market dynamics that says FPL is seeking additional simi- will improve pipeline utilization rates. lar opportunities to save customers Even though the Northeast has seen increased money in the long run. “That is natural gas production and new infrastructure, part of why we are doing this, to more work needs to be done, particularly to do what we can to protect custom- ensure better access during peak demand days, ers’ interests and keep their bills according to the EIA. Algonquin Gas Transmis- and fuel costs as low and stable as sion and Tennessee Gas Pipeline, which supply possible,” she said. Other utilities most of the natural gas to New England, plan to turning to shale gas include NW increase their capacities there by 4.1 Bcf/d by the Natural, which has invested in gas end of 2018, which should significantly increase reserves since 2011, along with natural gas supply in New England. Southern Co., Xcel Energy Inc. and Duke Energy Corp. NGV NW Natural launched a social media campaign to celebrate its announcement that it Survey Says is now serving 700,000 custom- Natural gas transportation fuel is still ers in Oregon and southwest trending up Washington. For seven days, it proportional to the outsized growth of the overall tweeted a daily customer milestone heavy truck market. using the hashtag #Celebrating- ales of natural gas-powered trucks are In the study, trucking industry leaders— 700KCustomers. Twitter users continuing to grow steadily and saw a 27 including manufacturers, suppliers, fleet opera- who retweeted the milestones Spercent increase in units sold from 2013 to tors, the fueling industry and other companies were entered into a daily draw- 2014, according to updated research on natural interested in the direction of natural gas as a com- ing for a gift card. The company gas transportation fuel trends in the heavy truck mercial vehicle fuel—were asked to reflect on the enjoyed more than 600 retweets market released by ACT Research. long-term future of natural gas as a vehicle fuel. as it shared information about key However, usage predictions have fallen from According to Vieth, a more cooperative dates in NW Natural history. initial expectations, according to Ken Vieth, investment strategy between shippers and truck- ACT Research’s senior partner and general man- ers is needed. “The chicken-and-egg issue of ager. “There was a lot of hype and enthusiasm in infrastructure is being solved, albeit slowly, but 2010,” he said. the price of natural gas-powered equipment still One issue that still remains to be addressed needs to be addressed, and this won’t be solved is that thousands more natural gas stations are overnight. That’s why we call it an evolution and needed along traveled routes so trucks can easily not a revolution,” he said. refuel. “You can’t afford to have to drive out of ACT estimates that by 2025 natural gas- your way to refuel or it will not be economically powered trucks should make up 23 percent of viable,” he said. units sold. “That’s a large quantity that will be Still, the ACT report found that in 2014 shared by those with an understanding of tomor- natural gas-powered trucks continued to grow row’s truck transportation needs and plans to get in unit sales and production, though at a rate there,” Vieth said.
10 AMERICAN GAS MARCH 2015 BY THE NUMBERS
When winter weather rolls in, many of us turn to natural gas. According to the U.S. Energy Information Administration, about one-half of U.S. households use natural gas as their primary heating fuel, with natural gas as the dominant heating fuel in colder parts of the country.
GAS HEATS THE HOMES (AND BUSINESSES) UP NORTH
Natural gas consumption varies widely by region of the NORTHEAST country, with the majority of NATURAL GAS MID EST ELECTRICITY households that heat with EST natural gas located in the HEATING OIL/ EROSENE PROPANE Midwest and Northeast. The OOD East North Central Census OTHER/NO HEATING Division (Wisconsin, Michigan, Illinois, Indiana U.S. TOTAL and Ohio) is the largest MILLION HOMES residential and commercial SOUTH natural gas-consuming division in the country, making up 28 percent of all residen- tial consumption and 24 percent of commercial consumption in 2013.
CHANGE IN DAILY NATURAL GAS CONSUMPTION PER DAILY INCREASE OF ONE HEATING DEGREE DAY
Because the East North Central Census Division has the largest number of households heating with natural gas, its collective response to changes in weather (as measured by heating degree days) is greater than in any other region. The response to changes in heating degree days in the South Atlantic Census Division (which has about 6 million homes that heat primarily with natural gas) is similar to that of the Pacific and Mid-Atlantic divisions (where 10.2 and 9.4 million households, respectively, heat with natural gas). This response may be attributable to natural gas used as a secondary heat source, such as in natural gas fireplaces or as the supplemental heat source to air-source heat pumps. When temperatures drop below a certain threshold (usually around freezing temperatures), heat pumps rely on a supplemental heat source.
RESIDENTIAL COMMERCIAL
BCF PER HEATING DEGREE DAY