Chris McGill Natural Gas Market Indicators: October 14, 2016

Oil-directed drilling is up 35 percent as measured by Baker-Hughes rig activity since late May 2016 and gas drilling is up 16 percent from the end of August. Much of the drilling increase is attributed to increased oil and natural gas wellhead prices – oil now over $50 per barrel and natural gas above $3 per MMBtu. These energy prices remain great values for consumers while injecting just a little more money into the upstream sector, which is not a bad thing.

We will continue to watch storage inventories and heating degree day data to see what they will say about the robustness of natural gas demand to begin the winter heating season. Remember, the winter heating season of November 2015-March 2016 was the winter that wasn’t, as national heating degree days came in 17 percent fewer (warmer) than normal. A return to any semblance of normal may mean residential and small commercial users consume more natural gas during the heating season and thus overall bills may increase.

AGA will host a media briefing on Wednesday, October 19, to present expectations for peak month natural gas supply and demand as we move into the 2016-17 winter heating season. Experts from AGA will discuss the winter outlook for the natural gas market including market stability, natural gas bills for consumers, U.S. natural gas imports and exports, the global LNG market as well as energy efficiency and the benefits of the direct use of natural gas. An open question and answer session will follow the presentation. If you are a member of the media and would like to RSVP, please email

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 or Richard Meyer at

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Dave McCurdy Your Safety is Our Top Priority

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. Our customers are our friends, families and neighbors and we take every incident involving a natural gas pipeline very seriously.

The American Gas Association and our members are proud of the industry’s overall safety performance and the culture of safety that has been cultivated at each local gas utility throughout the country.

While we see news coverage about specific events, incidents on natural gas pipelines resulting in fatalities and injuries are not common. The United States has seen an approximately 40 percent decline in pipeline incidents over the past 10 years. Any injury or loss of life is tragic and the industry works every day to avoid it. These numbers include causes outside the direct control of the utility, such as people driving into gas meters, damage to the pipelines caused by excavation, customers tampering with their gas meters, appliance failures or incidents that take place within a customer’s home. These, along with weather-related events cause a great number of natural gas incidents—something that is not often included in news coverage.

We believe that one incident is too many and we are consistently looking to make improvements that will continue to enhance safety and reliability. After an incident occurs, utilities work to understand what happened and how to avoid something similar happening in the future. The industry is working with stakeholders such as firefighters, schools and building contractors on a variety of initiatives that focus on protecting customers and raising awareness of natural gas safety.

There are certain actions you can take to help mitigate the chances of a natural gas incident occurring:

1. Pay attention in order to help identify potential signs of a natural gas leak. There are several ways to detect a natural gas leak.

  • Smell: Because an odorant called mercaptan is added to natural gas by the utility to help you detect its presence, the best sign of a natural gas leak is if you smell something similar to rotten eggs.
  • Sight: Look for dirt blowing into the air, persistent bubbling in standing water, or discolored or dead vegetation around the pipeline area.
  • Sound: Listen for any unusual hissing sounds.

In the event you think you smell, see or hear any of these signs of natural gas, leave the home, building or vicinity immediately and call your natural gas utility.

Information about how to respond to a potential leak or these warning signs varies throughout the country based on a variety of factors, including climate and soil condition. To learn how transmission pipelines near you or your distribution utility addresses leaks, contact them directly.

2. Know What’s Below: Call 811 Before You Dig. Be sure to call 811 at least three full days before you perform any digging work, even if it is something as simple as planting a tree in your yard. This will allow the local utilities to come and mark the location of any underground lines so that you can avoid damaging them when you dig. Visit

3. Help make sure that all those who are performing any excavation work in your neighborhood have notified 811. This would include any work done in the public right-of-way, as well as work done by individuals in their yard. If a call to 811 has been made, underground utilities in the vicinity of the excavation site will come to the site prior to the start of excavation and will mark the location of their buried facility through painted lines, flags or other markers. If a call to 811 has not been made prior to excavation, this could possibly result in damage to underground facilities, including natural gas pipelines.

4. Do not tamper with the gas meter. Use a licensed professional to perform periodic inspections of customer-owned fuel lines delivering natural gas to appliances, equipment and structures.

There are over 2.5 million miles of natural gas pipelines that serve more than 177 million Americans. The ongoing decline in pipeline incidents is due to the dedicated efforts of natural gas utilities and regulators to enhance safety programs and raise awareness about the need for active involvement by customers and communities. Natural gas utilities spend $22 billion annually to help enhance the safety of natural gas distribution and transmission systems. AGA’s member companies work together to identify and share best practices to help enhance safety and reliability.

Natural gas utilities and pipelines deliver over a quarter of the energy used every day in America and more homes and businesses use natural gas today than ever before. Those numbers continue to increase. Whether you are a customer or not, know what to look for and if you see something, say something. Working together, we can make our communities safer.

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Jackie Bavaro Natural Gas Utilities Make it a Priority to Combat Internal Physical and Cyber Security Risks

October is National Cybersecurity Awareness Month (NCSAM), the 13th annual Department of Homeland Security-led campaign created as a collaborative effort between government and industry leaders to ensure every person has the resources they need to stay safe and secure online. With this in mind, the October issue of American Gas magazine titled, “Inside Out,” discusses the pervasive physical and cyber threats facing natural gas utilities and how companies are tackling a potentially bigger risk—insider threats.

inside-outAt some companies, the majority of cyber incidents are accidental malware infections caused by employees or contractors. Most attempts to lure unsuspecting employees come in the form of phishing scams, which are fraudulent email messages appearing to come from legitimate businesses, including banks, restaurants and telephone companies. An example of phishing scams on a global scale includes the 2015 Ukrainian cyber-attack on the electric grid, where phishing was one of the methods hackers used to gain access to the distribution grid, causing 225,000 customers to lose power for several hours. For this reason, Colorado Spring Utilities implemented a phishing security initiative in 2015. This mandatory training has decreased the number of employees who click on a phishing email by 74 percent.

The move to digital has also made it easier for these threats to occur. Data that used to exist on paper now resides on a server which can significantly increase vulnerability to a breach. In order to prevent unnecessary attacks from happening, it’s important that utilities follow the five-step cybersecurity framework laid out by the National Institute of Standards and Technology:

  • Understand what’s important
  • Install controls and safeguards
  • Monitor and detect anomalies on your network
  • Create incident response capabilities
  • Build capabilities surrounding resiliency and recovery

Most employees don’t realize they are a potential threat, but each time they turn on their laptop, log onto the network or insert a USB thumb drive into their terminal, they could inadvertently be injecting malware, viruses or ransomware into your company’s network. It is important that utilities employ smart cybersecurity processes to protect their employees and systems. Throughout NCSAM, you can share cybersecurity tips and resources on social media by using the hashtag #CyberAware to promote your efforts and join the conversation.

If you are a utility and have a unique and interesting way you’re improving cybersecurity best practices at your company let us know in the comments section below or by emailing Jackie Bavaro at

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Richard Meyer Natural Gas Market Indicators: September 29, 2016

Many variables are in play as we approach what is normally a one-month shoulder period in the natural gas market. Lower volumes of natural gas to power generation, cumulative production adjustments balanced by supplies from Canada, strong pipeline exports to Mexico, and maintenance at LNG facilities coincide with Henry Hub prices at about $3 per MMBtu. Heating degree day data will say much about where that market goes during the winter heating season. The cost of gas injected into storage likely has been a great value for companies given low summer commodity prices this summer. This value may ultimately transfer to customers as winter bills are tested compared to last year, during which time winter temperatures were largely a non-event with warmer-than-normal conditions for most of the country. Now we have one month to build expectations for November 2016 through March 2017.

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 or Richard Meyer at

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