And by the way, it will help enhance America’s energy security and, by extension, our national security.

Start with saving motorists money.  Due to the vast amount of natural gas from shale that has been entering the domestic energy market over the past few years, natural gas is now both plentiful and competitively priced, especially compared with gasoline.  In fact, on a gallon-equivalent basis, natural costs approximately $1.50 less than gasoline.

As for saving our country money, the more dollars spent producing and using domestic natural gas, the less we spend on imports of foreign oil, which currently amounts to a staggering $1 billion per day.  Likewise, the more dollars that are spent developing the domestic natural gas industry, the more domestic jobs we create in that industry.

And of course, the more we drive cars powered by environmentally friendly natural gas the cleaner our environment.  Replacing an older, gas-powered vehicle with a newer NGV can reduce NOx emissions by 75-95 percent and CO2 emissions by 20-20 percent.

As for enhancing our energy security, it is well known that America is overly dependent on oil imports from nations that are, to varying degrees, corrupt, authoritarian, unstable, and have little or no sympathy for America’s values or national interests.  That threatens both our energy security and our national security.

So imagine if we were able to displace significant amounts of this imported oil—90 percent of which is used in the transportation market—with natural gas.  The way to achieve that goal is to put more NGVs on the road.

Of course there are challenges, including producing NGVs in numbers that will make their initial cost more comparable to the cost of gas-powered vehicles, while simultaneously developing a nationwide re-fueling infrastructure.   Meeting these challenges will involve a significant financial investment, an industry-wide commitment and, at least initially, some measure of government support.   But as this month’s cover story suggests, and as accompanying articles by Rich Kolodziej of NGV America and Kathryn Clay of the new Drive Natural Gas Initiative clearly reinforce, the economic argument for NGVs is compelling, the environmental benefits are substantial, the energy security argument is undeniable, and the technology to cost-effectively produce both NGVs and a nationwide NGV re-fueling infrastructure is advancing rapidly.

In other words, to the question “Is Now the Time for NGVs?” the answer is yes.

And research and development organizations such as the Gas Technology Institute (GTI), NYSEARCH and the Pipeline Research Council (PRCI) have long been in the business of identifying, supporting and developing new technologies—and at AGA we have been working closely with these groups for just as long.   That is one reason we welcomed the opportunity to let these research groups share some of the promising new products and procedures that they are working to develop and bring to market.

Which they have done in the pages of this month’s issue, so if you aren’t excited about better ways to perform “low-drag magnetic flux leakage testing” on pipeline, or new ways to predict “microbially induced corrosion,” or a new video surveillance camera that can remotely monitor “hot-spot portions of pipeline rights-of-way that have been identified as being especially vulnerable to outside-force damage,” well then, my friends, you need to re-examine your priorities.

In all seriousness, the foundation of everything our industry does is our reputation for the safe and reliable delivery of natural gas to the 175 million Americans who depend on it every single day.   Ensuring that safety and reliability is a formidable challenge, but one that we have always met, and one that we will continue to meet with the invaluable help of new technologies, products and services, and thanks to the outstanding technology research and development organizations—GTI, NYSEARCH and PRCI to name just three—that make them possible.

Yes, those local utilities deliver clean, reliable natural gas to the homes, businesses and industries in cities and towns across America, but they also are connected to their customers in ways that go far beyond their natural gas pipe in the ground.

They also are connected by the significant economic impact they have on their local communities.  A recent study says that America’s natural gas industry is responsible for 2.8 million American jobs, of which more than 600,000 are the direct result of finding, producing and delivering natural gas to customers.  In addition, more than 700,000 jobs are the indirect result of our industry—that is, these jobs are created by companies that sell products and services to the natural gas industry.   And finally, 1.5 million American jobs are the result of the consumer spending done by the workers in those direct and indirect natural gas industry jobs—what is sometimes called the “induced result” of our industry.

All total, according to the study, 31 states have at least 10,000 jobs related to the natural gas industry, which is a significant economic impact that is felt in communities around the nation.

Local natural gas utilities also are connected to their communities by the civic pride and local commitment so proudly exhibited by their employees.  Nationwide natural gas utilities, driven by the charitable giving of their employees, contribute nearly $3 billion to energy assistance programs for low-income families struggling to pay their energy bills.  These utility employees are also leaders in charitable giving and corporate philanthropy, donating money to help their communities in everything from education, to local business development to making sure less fortunate children have a present to open on Christmas day.

And finally, natural gas utilities and their employees work with local business and political leaders to attract new businesses to their communities, thereby increasing local jobs and local tax revenues, while also increasing the number of natural gas utility customers.

In sum the local natural gas utility and its employees know that being a good neighbor and friend is good for the soul as well as good for business.  As AGA President McCurdy puts it in his president’s message, “The more thriving and vital the community is, the more thriving and vital its natural gas utility is—and vice versa.”

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.

According to Clark that is one reason “NARUC plays a key role in training and educating the nation’s utility regulators,” especially since there is a lot of turnover on regulatory commissions.  “The average commissioner’s tenure is between only three to four years,” Clark says, so getting new commissioners up to speed as quickly as possible is critical.  “No one benefits from poorly equipped and trained regulators.”

In the interview Clark also shares that commissioners need to do a better job of communicating to their key audiences—especially the general public—what it is they do, and why.  Because regulators deal with a number of complicated procedures, including due process rights, notice requirements, ex parte communications and evidentiary-based records, Clark admits, “The regulatory world can be arcane.”

Clark’s prescription is better transparency.  “We regulators need to ensure that all parties feel as though they have an open, transparent way of communicating with us, and us with them.  To do otherwise risks alienating the very people we are there to serve.”

Speaking of being prepared, Clark stresses that with respect to the natural gas industry, the highest priority for both the regulators and the utilities they regulate is the safety of the natural gas delivery system.  Clark notes that among the many issues regulators need to address —  especially in light of a number of recent natural gas pipeline incidents, including the tragic incident in San Bruno, Ca. — is whether pipeline safety program personnel, those responsible for safety inspections, are able to do their jobs properly with the resources they currently have.  According to Clark, “The answer coming back (from safety inspectors) is that more resources are needed.”

Clark also notes that the good news for the natural gas industry, the abundance of shale gas that is currently coming to market, is also good news for the consumer because it means stable, affordable natural gas prices.  As a result, even though some in the environmental community object to the environmental impact of the hydraulic fracturing (“fracking”) process necessary to produce shale gas, NARUC is, for the most part, supportive of this new supply source.

“Because of the clear importance of the emerging shale plays to the affordability of gas to consumers, NARUC has asked the EPA to consider that state environmental regulators may be in the best position to assess the highly localized potential environmental impact of fracking,” Clark explains. “The concern is that regulatory overreach could shut down a major positive development for consumers, with limited environmental benefit to show for it.”

For a balanced, thoughtful interview with a thoroughly prepared NARUC president, read the entire story by visiting aga.org

The story cites several examples of the new natural gas end-use equipment that is now available, including natural gas water heaters that use up to 40 percent less energy than standard models, or gas “tankless” water heaters that, among other features, allow consumers to save energy and money by setting their water heater temperatures depending on the need—higher temperatures for washing clothes, for example, lower for washing dishes.  There are even hybrid water heaters that use solar energy (at no cost) to heat water during the day and natural gas to heat water at night or when it’s cloudy.

Natural gas space heating is another major market, and new equipment includes condensing furnaces that are more than 90 percent efficient, and micro-combined heat-and-power units that can provide homes with gas-generated electricity and also use the waste heat generated to meet a variety of home heating needs.  While expensive, these micro-CHP units provide energy more reliably, in a greener way, and at lower costs.

The ESC even has ways to keep us healthy.   Flu season is upon us, and according to many scientists dry air can cause nasal and throat membranes to dry out, making us more susceptible to colds and viruses.  One solution is a highly efficient natural gas-fired humidifier, which means better indoor air quality, which means healthier families in the home, and healthier employees at work.

Speaking of work, any professional chef will tell you that natural gas is the preferred energy for cooking, even more so today thanks to highly efficient natural gas-fired combi ovens, which are compact, meaning they are easier to fit in crowded commercial kitchens.  Yet while they have shrunk in size, their combination of moisture and heat actually reduces the amount of shrinkage during the cooking of meat, meaning higher yields and bigger profits.

These and many other highly efficient, green and innovative technological solutions to virtually all of our energy needs in the home and business are described in David’s story, which I would highly recommend.   You can also learn more about the ESC and the energy solutions it offers by visiting www.energysolutionscenter.org.

Read about AGA’s Vision 2020 Strategic Planning Initiative in the July issue of American Gas.

The good news is that, given its domestic abundance, environmental superiority and greater efficiency, natural gas, especially when used directly in America’s homes and businesses, will be the preferred fuel for years to come—and that should remain the case regardless of whatever climate change legislation Congress eventually passes.  But as Vision 2020 has pointed out, there are plenty of challenges and there will be plenty of changes ahead.

For one, natural gas utilities need to re-think their traditional business model of delivering the commodity—natural gas—to homes and businesses for heating, water heating and cooking applications.  That is because new competitors are already re-thinking that business model, which is another significant change that already is taking place.  Today companies such as Google, Intel, Microsoft and Home Depot are developing a variety of cost-effective energy solutions, including energy efficiency and “green” products and services that reduce energy use and save customers money.  The utility needs do likewise, but that starts with a better understanding of what products and services the customers will want.  To that end, utilities also need to re-think their relationship with customers, evolving from service providers into partners, empowering their customers to manage their own energy use through a variety of energy efficient solutions.

This in turn means continuing to ensure that new generations of highly efficient and “energy smart” natural gas products and services are available to the customer, which requires an industry-wide effort to support technological research and development.

Vision 2020 also points out that utilities will need to re-think their relationship with their regulators.  In the new carbon-constrained world in which energy efficiency and conservation are the goals, our industry will need a new regulatory construct that rewards, not penalizes, utilities for partnering with their customers to reduce natural gas use.

All in all, as the article in American Gas makes clear, a brave new world is coming and AGA’s natural gas utility members need to be prepared for it, which is one reason AGA developed the Vision 2020 Strategic Planning Initiative.   The other reason was to bring our members together to share ideas, strategize, and not only get more involved with AGA, but with one another.  Facilitating that involvement is one of the things AGA always has been, and always will be, very good at.  In an industry facing fundamental change, it’s nice to know some things won’t change.

If you can’t find your copy, don’t forget that you can access the digital version of American Gas Magazine at aga.org

The July issue features Dave’s article on the AGA Vision 2020 Strategic Planning Initiative, a more in-depth article on the topic by Bruce Kauffmann (Bruce is going to do a post on this later so you all can chime in), a great safety article on the tools and strategies utilities are using to combat blowing gas situations, and more gas statistics. Enjoy.

Developed by the U.S. Green Building Council (USGBC) in Washington, D.C., the LEED green building certification program awards points in five areas: building site, water efficiency, materials and resources, indoor environmental quality and energy use. The final point total, based upon written documentation submitted after construction or renovation concludes, determines the building’s level of LEED certification as Certified, Silver, Gold or Platinum.

Dominion Resources’ new administration building for its Cove Point liquefied natural gas facility is situated on Maryland’s Chesapeake Bay. The use of drought-resistant landscaping, a highly reflective roof, insulated glass and other features helped the building earn LEED Silver certification. Photo courtesy of Dominion Resources.

The article also does a excellent job of examining the construction of an administration building at Dominion’s Cove Point facility. Some of the highlights from that construction include:

• Purchasing about 25 percent of construction materials—including bricks, windows and cement—from local producers, thus reducing the amount of energy used for transportation.
• Recycling approximately 85 percent of construction waste rather than sending it to a landfill.
• Installing downward-focused outdoor lighting to prevent “light pollution” that disturbs nocturnal animals.
• Using a highly reflective roof, highly insulated walls and insulated glass in windows and doors to reduce heat and cooling loss.
• Installing plumbing fixtures that use 40 percent less water than their standard counterparts.
• Encouraging employees to commute by bike (by offering on-site showers) or car pool (by reserving prime parking spaces for registered car and van pools).

Those are some great examples of how business can have a considerable positive impact on the environment with some planning and dedication. You can download this pdf to read the entire article and visit aga.org for more articles from American Gas Magazine.

Green building is a hot topic as people are more and more concerned with our environment. Check out this useful presentation on the benefits of natural gas in new construction. AGA also has a section on natural gas efficiency. 90% of the energy content of natural gas is delivered to customers as a useful fuel. 90% … that’s huge.

Does anyone have some good links or stories about green construction to share?