Author Archives: Bruce Kauffmann

Bruce Kauffmann New Natural Gas Realities

The cover story for the April issue of American Gas magazine, titled “The New Natural Gas Realities,” tells the story of the new outlook for our industry in terms of “the big three”—natural gas supply, delivery and use.

In short, many of our new realities are vastly different from the old ones.  For example, for decades our challenge was to procure enough natural gas supply to keep pace with demand, which—depending on how successful we were—could result in volatile prices, unhappy customers and unfriendly regulators and legislators.  All of this began to change a few years ago when new technologies allowed us to cost-effectively produce abundant quantities of unconventional sources of natural gas, in particular gas from shale rock formations.  In 1991 shale gas accounted for 1 percent of our domestic production.  Today it is 20 percent and growing.   The result has been stable, affordable natural gas prices, happy customers and friendly—well, friendlier—regulators and legislators.

Of course, contributing to those stable, affordable natural gas prices is stagnancy on the demand side.  While the number of households using natural gas has grown by 70 percent since 1970—from about 38 million to more than 64 million today—aggregate natural gas use has remained essentially flat due to the fact that those household use natural gas much more efficiently.  For one thing, new natural gas end-use products are vastly more efficient; for another, more customers are conserving energy.

Thus our new challenge is to grow demand for natural gas, both its traditional use for home heating, water heating, cooking and the like, and in new markets such distributed generation and the transportation market (putting more natural gas vehicles on the road), while increasing its use in the emerging “Smart Energy Grid.”   To meet that challenge AGA is increasing its focus—especially its messaging to our key stakeholders—on the economic, efficiency, environmental and energy security advantages of the direct use of natural gas in America’s homes and businesses.   We have also created the AGA Growth Task Force to identify market growth opportunities and produce an action plan that moves us forward.  As the cover story spells out, that task force has identified five key areas that offer the most promising growth opportunities for our industry.

As for the delivery of natural gas, the natural gas industry’s newest challenges are implementation of the Distribution Integrity Management Program and an aging infrastructure that needs new resources to both modernize it and expand it.  Our cover story spotlights the ways several of our member companies are meeting those challenges, which have come into much sharper focus in the wake of the tragic pipeline incidents in San Bruno, Ca., and Allentown, Pa.

That said, what has not changed with respect to the delivery of natural gas is our industry’s understanding that safety is “Job One.”  In that sense, our “new reality” is the same as our old one.  The safe, reliable delivery of natural gas to the 175 million Americans who depend on it every day is—and always will be—AGA’s highest priority.

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Bruce Kauffmann AGA President and CEO Dave McCurdy on the political process and AGA’s priorities

The March issue of American Gas magazine features an interview with AGA’s new president and CEO, Dave McCurdy, who joined AGA after serving for four years as president and CEO of the Alliance of Automobile Manufacturers (Alliance).  In this follow up to a previous post, McCurdy shares his thoughts on how the political process in Washington has changed and how to advance the priorities of AGA’s members.

Excerpts from this American Gas interview, edited for space and clarity, will appear at True Blue Natural Gas throughout March.  The entire interview can be read at aga.org.

AMERICAN GAS: You are a veteran of Capitol Hill and alumnus of Congress. How is Congress different from when you were a member? Has the political process gotten better or worse? Have you given any thought to the strategies that will advance our natural gas utility issues—pipeline safety, LIHEAP, access to new sources of supply, R&D funding and so on?

McCURDY: We could spend a lot of time on the first half of your question. The process has definitely changed. It has become a much more polarized and toxic environment. The political parties have become more harshly partisan and more homogenous—that is, more extremely liberal and conservative. I am a Democrat, but I was part of the right wing of that supposedly left-wing party. That put me right in the middle of the political spectrum—and there were Republicans to the left of me. Today the center has shrunk, which is very harmful because the nature of the debate has changed. It has become more personal, demonizing opponents and such.

But in terms of AGA’s and our members’ priorities—pipeline safety, LIHEAP, research and development and I would add some important tax issues to the list—the key to advancing them is strengthening relationships with our most important stakeholders. That is something AGA has been very good at, and I commend the AGA team for being able to accomplish so much because of those relationships. It also means having the right resources and tools such as GASPAC to be successful.

Access to new sources of supply is obviously a high priority. Part of my congressional district was Duncan, Oklahoma, which at one point was headquarters for Halliburton—it no longer is—but I grew up in that world, and I saw first-hand the incredible innovation and technology development and how it was able to open up these new resources. It really is phenomenal.

I am a strong believer that the exploration and development of new energy supplies can be done in a safe, environmentally responsible manner using best practices, working with our regulators to develop appropriate safeguards and promoting transparency. And people need to understand that. I believe in clear communication based on the facts, and the facts are on our side.

And pipeline safety is also a very high priority.  I recognize that our members look to AGA to provide programs and services that help deliver natural gas safely, reliably and cost-effectively.  Those programs are critical not only to our gas utilities, but also to our pipeline members, international equipment and services members and others. That core focus will not change.

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Bruce Kauffmann AGA President and CEO Dave McCurdy on first impressions of the industry

The March issue of American Gas magazine features an interview with AGA’s new president and CEO, Dave McCurdy, who joined AGA after serving for four years as president and CEO of the Alliance of Automobile Manufacturers (Alliance).  In this follow up to a previous post, McCurdy shares his first impressions of the industry and AGA.

Excerpts from this American Gas interview, edited for space and clarity, will appear at True Blue Natural Gas throughout March.  The entire interview can be read at aga.org.

AMERICAN GAS: Granting that you have a bit of a learning curve ahead, would you share your first impressions of the natural gas utility industry, especially your impressions of where the industry will be in the future?

McCURDY: Well, there’s always a learning curve when joining a new organization, but I’m a disciple of accelerated learning. I have given a copy of a book called The First 90 Days to AGA’s senior staff. It talks about how you accelerate learning and transitions, and I’m a strong advocate of that.

But keep in mind that in terms of a learning curve, I grew up in the Oklahoma oil and gas patch and represented a district in Congress that was a center of the oil and gas industry. I have seen how the rapid advances in technology over the years have literally been a game-changer in terms of expanding the unconventional gas resources and their effect on stable and affordable natural gas prices. This country is blessed with domestic shale gas equivalent to the oil reserves of Iran.

One way or the other I have been involved in discussions about energy my entire career. Recently I met with T. Boone Pickens, and we discussed a lot more than the football rivalry between his alma mater, OSU (Oklahoma State University), and my beloved OU (University of Oklahoma). He and I share the view that we can, and must, take advantage of the full mix of “all-American fuels,” including natural gas and alternatives. That view is shared by members of Congress and the Obama administration with whom I have also had frequent conversations.

You’ll find that I’m a natural optimist and believe that we have a great future as long as we dedicate ourselves to a common purpose. The future for natural gas as a domestic fossil fuel is extremely bright as we move to a sustainable energy policy for tomorrow. But the key word there is “sustainable.” That’s the bridge that must connect all of the energy stakeholders, including both political parties. We all have to agree on a sustainable energy policy.

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Bruce Kauffmann Meet AGA President and CEO Dave McCurdy

The March issue of American Gas magazine

features an interview with AGA’s new president and CEO, Dave McCurdy, who joined AGA after serving for four years as president and CEO of the Alliance of Automobile Manufacturers (Alliance).  Prior to his work at the Alliance, McCurdy served for eight years as president and CEO of the Electronic Industries Alliance (EIA).  He also spent 14 years in the House of Representatives as the Member from the Fourth Congressional District of Oklahoma.    A proud “Sooner”—“I grew up in the Oklahoma oil and gas patch”—McCurdy is a 1972 graduate of the University of Oklahoma and received his J.D. in 1975 from Oklahoma Law School.  McCurdy and his wife, Dr. Pam McCurdy, a physician specializing in child psychiatry, live in McLean, VA. They have three grown children, Josh, Cydney and Shannon and two sons-in-law.

Excerpts from that American Gas interview, edited for space and clarity, will appear at True Blue Natural Gas throughout March.  The entire interview can be read at aga.org.

AMERICAN GAS: You come to AGA from two big associations—the Electronic Industries Alliance and the Alliance of Automobile Manufacturers. Why AGA?

McCURDY: That’s an interesting question. It was an honor to serve and represent two major global industries. I really enjoyed leading both associations. I have always been a proponent of American innovation and at EIA we represented the entire field of electronics, from semi-conductors to consumer electronics, to telecom, to aerospace—the full spectrum, and it was a global spectrum. In that role, I spent a lot of time in Asia, especially China. I even learned enough Mandarin to give a short speech, and I spent a lot of time focusing on our national innovation and economic competitiveness.

As for the automobile association, I was recruited by the auto sector at the end of 2006. I met with the CEOs of Ford Motor, GM, Chrysler, Toyota, BMW, Volkswagen and Mercedes-Benz, and was impressed with their commitment to sustainable energy policies, sustainable transportation and the need to change their approach to interfacing with the government. And I was also asked the question, “Why go from high tech to autos?” Well, in fact, 30 percent of the content of automobiles is electronics, and that’s increasing, so it’s very high tech. But it also gave me the opportunity to work on two of my passions—energy and the environment and safety issues.

In addition, I strongly believe that we need a domestic manufacturing base in America, which is critical to job creation, our long-term economic and national security. And even though none of us in 2006 anticipated the collapse of our financial system, the Great Recession and the bankruptcies of major automakers, we were able to keep our focus on our priority issues. We developed our vision, we reached out to new stakeholders and achieved our priority goals, which included a single national standard for fuel economy and greenhouse gases, and consensus solutions on the safety front.

So in terms of the switch to AGA, I was at a good point. We were coming off some major successes and when I was approached about possibly joining AGA, I saw it as an opportunity to achieve a viable—a sustainable—domestic energy and environmental policy.


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