Natural Gas: Moving Our Nation Forward

Transcription

1 Natural Gas: Moving Our Nation Forward Lori S. Traweek Chief Operating Officer American Gas Association June 27, 2017

2 Natural Gas Market Conditions

3 2016 Market Conditions Summary Record year for natural gas consumption, storage New highs for natural gas-fired power generation Strong exports to Mexico and first LNG shipments Domestic natural gas production lower CO2 emissions lowest in 25 years Affordable energy for consumers 3

4 Domestic Shale Production by Basin 4

5 Natural gas for power generation setting records in

6 US gas exports have grown steadily 6

7 Heating Season Natural Gas Spot Prices 7

8 Inflation-Adjusted Prices to Commercial Customers the Lowest since the Ford Administration Natural Gas Prices to Commercial Customers Real (Dec 2016$) Source: Energy Information Administration, Short-Term Energy Outlook (Dec. 2016) Forecast EIA STEO $7.42 lowest since

9 Energy-related CO2 emissions fall below 5.2 billion metric tons in 2016 year, lowest since US Energy-Related Carbon Dioxide Emissions Growth (percent) 5 Two years consecutive declines All fossil fuels (percent) Coal (percent) Petroleum (percent) Natural gas (percent) 9

10 Key Takeaways from the DOE/EIA Annual Energy Outlook United States becomes a net energy exporter Natural gas production increases despite relatively low and stable natural gas prices The primary driver for new electricity generation capacity is the retirement of older fossil fuel units, largely spurred by the Clean Power Plan (CPP) Even if the CPP is not implemented, low natural gas prices and tax credits result in natural gas and renewables as the primary sources of new power generation capacity 10

11 2017 Advocacy Focus New Administration Pipeline Safety Physical and Cyber Security Efficient Permitting for Pipelines & Infrastructure Tax Reform Championing the Cause: Benefits of Natural Gas

12 New Sheriff In Town Staffing Budget Executive Orders Regulatory Reform

13 By April 2017 President Trump had signed more than 20 Executive Orders Expedite environmental reviews for projects ranging from pipelines to highways For each new regulation, at least two existing regulations must be eliminated, and costs of new regulations must be offset by the elimination of costs from existing ones Agencies establish reform task forces to repeal or replace regulations Directs the U.S. to pursue reliable electricity and energy through coal, natural gas, nuclear material, flowing water and other domestic sources, including renewables 13

14 By April 2017 President Trump had signed more than 20 Executive Orders Construction of Keystone and Dakota Access Pipelines. Permit Streamlining Construction of American Pipelines to be Buy American targets EPA reviewing Mercury Standards Reviewing EPA methane rules 14

15 Regulatory Reform Environmental Protection Agency: Comments submitted on May 15, 2017 Department of Energy: Comments due July 14, 2017 Department of Transportation: Comments due July 24,

16 Pipeline Safety

17 The Operating Environment The Public Risk Intolerant Want proof, data, and transparency Don t Raise Rates! The Media Uninformed What Drives Viewer Ratings? The Regulators Greater Scrutiny Pressure To Be Tougher Expect operators to go beyond regulation The Legislators Polarized & Political = Just Do More! 17

18 Regulatory Expectations PHMSA and State Regulators expect operators to: Go above and beyond regulations Where possible, PHMSA will publicly support company efforts beyond regulations to improve pipeline safety. Fully embrace integrity management Know Your System! Base decisions on sound data Confirm existing data; find ways to address data gaps Embrace Pipeline Safety Management Systems Plan Do Check - Act 18

19 Pipeline Safety Regulations: What s Coming

20 Current and Pending Regulations Recent Rules: Excess Flow Valves Beyond Single Family Homes Emergency Order Authority Operator Qualification (OQ), Cost Recovery, Accident & Incident Notifications, and Other Pipeline Safety Proposed Changes Rule (OQ will now be a separate rulemaking) Natural Gas Underground Storage Safety of Gas Transmission & Gathering Lines Rule Plastic Pipe Rule Valve Installation and Minimum Rupture Detection Standards National Pipeline Mapping System 20

21 Raising the Bar - Power of A Awards showcase how associations leverage their unique resources to solve problems, advance industry/professional performance, kickstart innovation and improve world conditions. AGAs Peer Review Program was selected to receive the 2015 Power of A Gold Award. Peer Review Program AGA members are advancing the safety of the industry through a number of voluntary actions, including the AGA Peer Review Program, launched in This voluntary peer-to-peer safety and operational practices review program allows participants to receive reviews from their peers, share leading practices and identify opportunities to better serve customers and communities.

22 The Oil & Natural Gas Sector Coordinating Council Cyber Security Work Group, chaired by AGA, is an operators forum supported by DOE, in coordination with DHS, to promote effective cybersecurity strategies and activities, policy and communication across the oil and natural gas sector to achieve the nation s homeland security mission. Protecting Natural Gas Systems: Cybersecurity Cyber threats are real and unrelenting for all critical infrastructure. The natural gas industry must continue to employ prudent policies and practices to help ensure the resiliency and safety of natural gas systems.

23 In 2015, AGA held its inaugural Energy Delivery Cybersecurity Executive Summit: AGA and its members are keeping cybersecurity a top concern, while remaining focused on the resiliency and safety of natural gas systems for customers. As technology develops rapidly and the nature of threats changes constantly, there are tremendous opportunities for us to collaborate, not just among member companies, but also across critical infrastructure sectors to assure best practices. John McAvoy Chairman, President and CEO Consolidated Edison, Inc. Commitment to Cyber and Physical Security AGA and its members developed and adopted the AGA Commitment to Cyber and Physical Security, demonstrating their dedication to ensuring that natural gas pipeline infrastructure remains resilient to growing and dynamic cyber and physical security threats. AGA developed the Downstream Natural Gas Information Sharing and Analysis Center (DNG ISAC) as an online platform for sharing cyber and physical threat intelligence and tools to help further enhance the security of natural gas utilities.

24 Championing the Cause: Benefits of Natural Gas

25

26 Your Energy Campaign Update May 2017 YourEnergyAmerica.com

27 Campaign Objectives RAISE AWARENESS of and support for natural gas PROVIDE COVER to member companies as they engage and invest in local communities 27

28 National Campaign Status: Digital Since April 6, 2017 Launch: 514 website registrants 11,520 Facebook and 1,741 Twitter followers 2,375 video views Watch the full Your Energy video here. 6

29 Americans Want Natural Gas More homes and businesses in the United States use natural gas today than ever before. Our nation s abundance of natural gas is expected to keep prices low and stable for many decades into the future. For more information, visit

30 Find Us Online Lori S. Traweek Chief Operating Officer

31