July 2015, Vol. 242, No. 7
Features
SGA Chairman Says Bring on the Challenges
For every opportunity in the natural gas business there is an equal challenge, and conversely, every challenge can be turned into an opportunity. That’s the nature of the gas business today, but as any industry observer will tell you, that’s been the nature of the beast for the last 15 years.
Today, as the shale revolution continues full throttle in the United States, the industry is both pleased and disturbed by the low price of this environmentally friendly fuel. Will producers decide to shut in production as their oil brethren are doing, or will they wait this out with the hope that future demand, particularly from power generators forced to switch from coal, and the expectation that LNG exports will consume their ample supplies?
So many questions, so many variables, and so many hard decisions awaiting answers. Today the role of gas associations has never been important to this industry, among them the Southern Gas Association, which has long been a leader in many of the technology and safety issues facing gas companies.
Henry P. “Hank” Linginfelter is the 2015 chairman of the SGA and comes well-suited for the position. As executive vice president, Utilities Operations at AGL Resources, he is chairman and CEO of the company’s seven utilities. After over 30 years with AGL, there is nothing in the utility business beyond his ken. Linginfelter has a bachelor’s degree in industrial management from Georgia Tech and a master’s degree in business administration from Georgia State University. He and his wife, Sandy, and their two children reside in Atlanta.
In this interview, Linginfelter says one of SGA’s most important missions is to help spread the word about natural gas, and with his extensive utility background, he is perfectly suited to lead the way.
P&GJ: SGA’s theme this year is “Creating Opportunities and Delivering the Future.” How would you define that in terms of the natural gas industry?
Linginfelter: The new decade of natural gas is ushering in a “Golden Age” of sorts, an American renaissance of abundant natural gas supply coupled with affordable prices. It’s an amazing time to be in the natural gas industry and it comes with an obligation to deliver our product safely and reliably every day. We have been given an opportunity to create ways to invest in our communities, protect the environment, advance economic growth, operate efficiently and keep our costs competitive. The SGA can provide the platforms and tools to help us fulfill our obligation. “Creating Opportunities and Delivering the Future” is what the SGA does.
P&GJ: What are the top priorities for SGA this year and how have they changed since 2014?
Linginfelter: Pipeline and employee safety are always at the top of our list. So is operating effectively and efficiently. At SGA we also focus a lot on the customer. One shift in our focus for 2015 is being led by our Executive Council: as executives in the natural gas industry, we all know the advantages natural gas offers consumers. Supply is abundant. Markets are growing. But one challenge is building infrastructure to connect the two. Much of the challenge can be traced to uninformed or miss-informed individuals and groups. In 2015, the SGA Executive Council will focus on public relations, awareness and education and employee engagement in energy advocacy. The white paper they produce will provide talking points for conversations that will help us up our game as natural gas ambassadors.
P&GJ: Obviously the low-price environment has everyone in the industry unsettled. How do you see this situation affecting the natural gas business over the short term, particularly with pipeline activity?
Linginfelter: In the short and long term we should see natural gas prices remain low and stable, which is great for our customers. The challenge we face is not the low price. It’s getting the supply to customers across the country. New pipelines need to be and are under development to get gas to the markets throughout the East, Southeast and Midwest. This is a long-term investment by the natural gas industry that is the foundation of growth for our utilities.
P&GJ: As the industry has changed in recent years, how has SGA changed in terms of the types of companies that are now members? Is there a broad mix of LDCs, transmission operators, midstream companies and producers in the association?
Linginfelter: SGA has 116 members plus their 70 subsidiaries, with assets in 33 states. We have seen a growth in the number of midstream operators and responded by forming a new section to create space for their unique issues. Our transmission operating members transport over 80% of the natural gas shipped across the country. M&A activity tends to consolidate our membership but we have also experienced the splitting apart of companies into separate distribution and transmission companies. Because SGA’s focus is on distribution, pipeline, midstream and gas supply, our membership remains steady.
P&GJ: Similarly, is it difficult to meet the demands of such a diversified membership? How has SGA revised its programs to satisfy those whose needs don’t necessarily apply to all members?
Linginfelter: Interestingly, we are finding our members to be more interested in cross-functional topics than ever before. We find operating executives sitting in on a human resource’s breakout. Accounting and finance professionals want to sit in on discussions with gas supply as the dynamics of supply procurement shift. Growing load and focusing on the customer is of interest to most, so those sessions see a wide range of attendees.
To accommodate this appetite for a wider range of information sharing, SGA has designed our conferences to be more customizable. The SGA mobile app facilitates this by making it easy for a meeting participant to identify specific content and map that have the content to fit their needs.
P&GJ: In discussing safety, how are SGA and its members working to improve pipeline and job safety? Is there a way to benchmark how successful these efforts have been, perhaps through the SGA Pipeline Safety Council that it established last year?
Linginfelter: Since 2010, SGA has focused a session at the Management Conference on safety culture. NTSB Commissioner Christopher Hart presented on the first panel and set a tone for our industry to look at other industries like airline and nuclear for best practices. These sessions were taped and sit in our SGA Network Campus for our members to review. Our Pipeline Safety Council provides a forum where just our members can be open and share lessons learned faster so that those lessons can be implanted sooner.
P&GJ: What are some of the environmental issues that SGA is involved with, and are these mostly related to compression and reducing emissions?
Linginfelter: Our Environmental Committee is very active hosting several meetings each year for training and education in the environmental space. Issues they are tracking this year include new EPA methane emissions regulations and standards, state specific challenges in the Marcellus and Utica shales for spill prevention, countermeasure and control plans, wetland quality scoring, FERC and the Bureau of Land Management (BLM) National Environmental Policy Act (NEPA), construction interpretation challenges, additions to the Endangered Species Act (ESA) registrant list, and challenges for permitting management and construction risk mitigation.
P&GJ: What is your reaction to the recent EPA proposal calling for even stricter emissions standards?
Linginfelter: The EPA is currently basing its proposed regulations on outdated data. We believe that the emissions factors EPA uses should be updated using the latest data available. We support a voluntary program for reductions, such as the one proposed by the One Future initiative in which we are a participant. Emissions from local distribution companies are a remarkably small percentage of the total emissions attributed to our sector.
There are steps we can take to make marginal additional reductions, but there has to be a rational economic test applied, and we should avoid federal mandates that are not focused on improving the overall safety and reliability of our systems. We support a common sense energy policy that provides an energy landscape that works on the front and back end.
P&GJ: The Gas Machinery Research Council (GMRC) has been very active in helping operators meet their compression needs. How has it grown, why has it been so successful, and what does it hope to achieve this year?
Linginfelter: The GMRC model is to identify quality research projects and then transfer knowledge through workshops and the Gas Machinery Conference each year. We have several research partners who work collaboratively with industry to identify quality projects, apply focus to solve a problem, and then distribute that information back to industry. GMRC’s spend has increased the past two years primarily due to the Performance Augmentation Network (“PAN”) project. This project is close to proof of concept and the GMRC Board, under the leadership of Craig Linn, with Williams, will next focus on how to push the lessons learned out to the industry.
P&GJ: What research activities is SGA coordinating on with other associations?
Linginfelter: The SGA Gas Machinery Research Council regularly partners with Pipeline Research Council International on research projects. One project this year is the Equation of State Comparisons for Pipeline Compression Applications. This project will test the density, specific heat at constant volume, and speed of sound of various gas compositions at specified operating points and compare the results to the most commonly used equation of state models. This will improve the accuracy of compressor performance predictions and flow measurements in the natural gas industry.
P&GJ: Cybersecurity, integrity management mandates, an aging workforce, LNG exports, siting and permitting issues … what’s SGA’s perspective on these topics?
Linginfelter: Cybersecurity is an important topic to our membership. We have had Dean Fox, a recognized subject matter expert, on three of our programs over the past two years. Siting and permitting has been a focal point of the Right of Way Legal Interest Groups. TransCanada is scheduled to present on their Keystone project at the upcoming Operating Conference.
Aging workforce is something our membership is focused on as well – Jeanne Meister whose firm launched the 2020 Workplace Network, a consortium of 45 organizations who convene twice a year to discuss debate and share “next” practices on preparing for the 2020 workplace, presented at our Management Conference earlier this year to give her perspective on the workforce we can expect to have in 2020.
With 25% of Gen X and 30% Gen Y already in the natural gas workforce, and an expectation that 25% of the current workforce will leave our workforce with the majority of those being retirements at the same time that our industry is expanding, this is a major focus of our membership.
P&GJ: When you talk to members, what do they say are their most pressing needs?
Linginfelter: Training and workforce development are the top two issues facing many companies. As the aging workforce begins to retire the wealth of experience gained working on the job over time vanishes. SGA members get the benefits of industry best practices in addition to education and training, which can help bridge the experience gap.
P&GJ: How did you get into the business and what made you want to make natural gas your career?
Linginfelter: I grew up in the company fold – my father worked for Atlanta Gas Light. As long as I can remember anything, I’ve been a part of AGL. I built my career from the bottom, working during summer breaks while a student at Georgia Tech. I started in the trenches, literally, and those tough jobs in the field encouraged me to stay in school. I admire those workers who do it day in and day out.
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