Jackie Bavaro Infrastructure Week 2017: #TimetoBuild

Today marks the beginning of the fifth anniversary of Infrastructure Week, a national week of education and advocacy focused around the #TimetoBuild theme. From May 15-19, advocates from across infrastructure sectors will gather in Washington D.C., and throughout the nation to highlight the importance of policies and investments essential for keeping our infrastructure functioning safely and reliably into the future—things like natural gas pipelines, airports, bridges, roads, rails, and the power grid. There are more than 70 events being held this week that will help highlight the “Time to Build” theme.

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There is nothing more important to America’s natural gas utilities than the safety of the customers we serve and the communities in which we operate. Throughout the country we are seeing public utility commissions recognize that low natural gas bills present an opportunity to continue to enhance the safety of the delivery network by upgrading pipes that may no longer be fit for service and replacing them with ones made from more modern materials. While all natural gas utilities upgrade and modernize their infrastructure using risk-based integrity management programs, 41 states and the District of Columbia now have specific rate mechanisms that foster accelerated replacement of pipelines.

Follow the AGA Twitter and Facebook pages for updates on events and to follow our progress on Capitol Hill and communities nationwide. Use the hashtag #TimetoBuild to join the conversation. You can learn more about how to participate in Infrastructure Week 2017 here.

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Jackie Bavaro Natural Gas Utilities Raise the Bar on Safety

The May issue of American Gas Magazine titled, “Worker Safety: Yours, Mine and Ours,” focuses on the safety programs at three AGA member companies: Xcel Energy, Pacific Gas & Electric (PG&E) and Vectren, and how they are drawing on new research, insights and processes to strengthen safety at every level within their organizations.

Over the past nine years, Xcel Energy has made impressive strides when it comes to bolstering safety values within the company. Employee safety efforts have reduced Occupational Safety and Health Administration incidents by half—preventing injuries to approximately 700 employees. During this time, Xcel has changed the way it communicates with employees, emphasizing openness and providing as much information as possible in the aftermath of an incident. Xcel leadership points to honesty and transparency as fundamental elements for their safety success.

AmGASPG&E has adopted highly sophisticated, metric-driven tools and is setting a new standard when it comes to safety. The utility relies on its extensive legacy of data and procedures, which centers around four main principles: Creating a safety culture where employees follow all standards and regulations; understanding hazards to identify potential risks; managing risk by establishing procedures, training, emergency management and other aspects of operational readiness; and learning from experience by determining and correcting systemic and organizational failures.

Along with safety culture and asset management, process safety is one of the three pillars that comprise PG&E’s safety management system, titled, Gas Safety Excellence. The process safety pillar focuses on preventing and mitigating unintentional natural gas releases. PG&E’s systems also draw on international standards and research. In 2014, PG&E became the first utility to receive a double certification for asset management, and in 2015, it became the first company in the world to receive a certificate of compliance with the requirements of the American Petroleum Institute’s new standard, RP 1173.

In 2014, Vectren, conducted an employee survey to help the company understand its challenges when it came to enhancing safety culture. One outcome of this survey included restructuring its safety culture governance model. The model engages employees from the front line to the board of directors to improve in the development of its safety culture. A company-wide advisory team includes executives, directors and union officers, fostering engagement at the highest leadership levels. The tiered structure also includes guidance teams that address safety concerns across all operations, as well as local teams that address safety concerns at the operating center level. Some of the most important work takes place in the natural gas operating centers and local safety meetings. That’s where a holistic approach meets individual ownership.

Developing a safety culture means that all individuals within a company from directors to field workers—consider safety to be essential to their jobs. Employees take responsibility for monitoring their work activities and seeking better and safer ways to operate. Ongoing engagement and commitment to continuous improvement reinforces the message that safety never takes a back seat to other business metrics.  To read the entire article, click here.

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Rebecca Massello Marrying Safety and Security – Natural Gas Utilities Build a Better Tomorrow

Promoting a culture of safety has long been the mantra for natural gas utilities. It is core to everything we do. The end goal is simple: protect the general public and our employees, while ensuring the continued safe and reliable delivery of natural gas to our customers. Carrying out this shared goal is the responsibility of every natural gas utility. Recognizing the importance of this role, the American Gas Association adopted the AGA’s Commitment to Enhancing Safety, which outlines voluntary actions being taken by AGA or individual operators.

Post September 11, we saw a new set of challenges on the home front and for critical infrastructure – security. Safe and reliable delivery of natural gas is critical to the health, safety, and economic well-being of our Nation, and natural gas utilities take this charge seriously. Natural gas utilities have historically taken measures to physically protect their assets from sabotage or unintentional harm. These physical security measures are often referred to as “guns, gates, and guards” and are intended to secure the perimeter and keep bad “things” out. As technology has continued to evolve, these tactics have become more advanced, employing technologies like microwave sensors, motion detectors, access controls, and alarms, all intended to give the operators more information and tools to protect their critical assets.

Beyond physical security, there is another rapidly evolving security threat – cyber adversaries. These adversaries can come in many forms, from nation states, to home grown extremists, to activists, to cyber criminals. Whoever the adversary, we face an uphill battle as we leverage an increasing amount of remote and automated technologies that help us to do our jobs more efficiently and reliably. Demonstrating this challenge, the Industrial Control Systems Cyber Emergency Response Team (ICS-CERT) has reported that the energy sector accounted for 20 percent of total reported incidents in 2016.[1] The increased deployment of automated technologies must also come with the appropriate cybersecurity controls to help ensure that cyber adversaries are not successful in their ultimate goal. To that aim, we apply a portfolio of tools, policies, procedures and practices intended to make it harder for the adversaries to access critical cyber networks and cause harm.

Today, we demonstrate that we are not just a culture of safety. We are a culture of safety AND security. Last year, the AGA Board of Directors approved AGA’s Commitment to Cyber and Physical Security, articulating our collective goal to stand up against the growing and dynamic security threats that exist. This commitment outlines our voluntary actions to identify, protect, detect, respond, and recover from threats and attacks. While we plan to keep the adversaries out and prevent attacks, we also know that some battles may be lost in this ongoing war, and we also plan how we will quickly recover and continue to reliably deliver critical services to our customers. All these guiding principles are outlined in this commitment statement.

There are approximately 2.5 million miles of pipelines making up the natural gas transmission and distribution infrastructure in the United States.[2] AGA’s members own and operate 2.2 million miles of this infrastructure. The signed letters of commitment to security that AGA has received to date collectively represent 2 million — or 90 percent — of AGA mileage, illustrating our dedication to these voluntary security actions.

As we march forward and carry out the principles outlined in this industry commitment, we continue to ensure that security is integral to everything we do. The security challenge is one that cannot be taken with complacency, and natural gas utilities are up to the challenge as we proactively take steps to help ensure that natural gas delivery continues to be safe, reliable, and secure into the future. For more on our commitment, click here.

[1] https://ics-cert.us-cert.gov/sites/default/files/Annual_Reports/Year_in_Review_FY2016_Final_S508C.pdf

[2] Based on PHMSA Annual Report Data, April 2017

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Richard Meyer Natural Gas Market Indicators: April 28, 2017

Futures prices for natural gas have reliably stayed above $3 per MMBtu for the past month. Elevated pricing support comes amid the third largest amount of natural gas left in storage in the past 10 years, suggesting traders still see some market tightening as the summer approaches.

Demand from exports has provided some of this support, and expectations for additional liquefied natural gas (LNG) export capacity from Sabine followed by Cove Point later this year are likely factors. But natural gas is not the only commodity defining price stability or not. Oil prices had remained reliably above $50 for months until just recently when West Texas Intermediate crude slipped below. Both commodities, oil and natural gas, are priced at a level that appears to be attractive to producers.

Oil and gas rigs are now more than double the count from their respective lows established last year. The question, at least to this analyst, is how well the natural gas market is pricing in the expected future flows from new production? Will the market continue to tighten? Or will new production volumes surprise us all?

Visit this link to download the full Natural Gas Market Indicators report. Topics covered in this week’s report include: Reported Prices, Weather, Working Gas in Underground Storage, Natural Gas Production, Shale Gas, Rig Counts, Pipeline Imports and Exports, and LNG Markets.

Please direct questions and comments to Chris McGill at cmcgill@aga.org or Richard Meyer at rmeyer@aga.org.

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