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.

This entry was posted in Natural Gas and tagged . Bookmark the permalink.