May 2017, Vol. 244, No. 5


Pierce Norton Sets a Proactive Path for AGA

By Jeff Awalt, Executive Editor

Pierce Norton’s career had already spanned six different companies before he joined ONEOK in 2004, but he had effectively been working there all along.  By the time he became president of its distribution companies, Tulsa-based ONEOK owned every natural gas system that Norton had operated since joining the Delhi Gas subsidiary of Texas Oil and Gas in 1982.

Now president and CEO of ONE Gas, Norton was one of six University of Alabama graduates hired by TXO in Tuscaloosa in its first recruiting venture outside of Texas A&M University and the University of Texas.  Norton would later learn that TXO started recruiting engineers in Alabama because it could hire them for $10,000 a year less than the Longhorns or Aggies.  The company got its money’s worth; another of its Alabama recruits that year was Terry Spencer, who now serves as president and CEO of ONEOK and ONEOK Partners.

ONE Gas, which was spun off as a standalone public company in 2014, serves more than 2 million customers through its three natural gas distribution divisions: Oklahoma Natural Gas, Kansas Gas Service and Texas Gas Service.  As chairman of the American Gas Association for 2017, Norton is encouraging its 200 distribution companies to take a more proactive stance as a “voice of natural gas.”

PG&J: You’ve spent your entire career in the natural gas industry.  What attracted you to the industry as a young mechanical engineer, and what’s kept you engaged over the years?

Norton: Once I decided to study engineering, it did not take very long for me to get interested in the energy business, and I decided by my junior year that I definitely wanted to pursue that. Keep in mind that this was not very long after Jimmy Carter’s address to the nation, when he declared the United States was running out of oil and gas.  But every energy company interviewing on campus was extremely positive about the future, and I was very excited about the natural gas business and the company that recruited me, Texas Oil and Gas. TXO had a great story, and their growth at the time was just exponential, off the charts. And as a young person who grew up in the south, the idea of moving out west from Alabama and working for a company like TXO was extremely exciting – probably similar to the way some young graduates today might feel about getting a job with Apple or Google and moving to California.

I can’t imagine another industry that I would have been any happier in. A lot of industries, if you have enough education and you have enough experience, if you have exactly the right skillset, then you might get an opportunity to advance and to do something. The natural gas industry gave me chances and opportunities – sometimes, frankly, before I really deserved it. I can’t imagine doing anything else. It has been extremely fulfilling.

PG&J: What are the biggest changes to the industry since you first started work?

Norton: Hands down, it is horizontal drilling technology. Today we can access the reserves that were always there but were inaccessible before. This technology has taken us from a state of supply anxiety to a period of abundant supply, with opportunities to expand into more of our economy and extend service into more communities.

PG&J: As chair of AGA, what are your top priorities for 2017?

Norton: Safety is always our industry’s top priority. We will continue to invest in our assets to make our systems safer and more reliable every day. I am particularly proud of AGA’s Peer Review Program, which helps member companies share best practices and identify opportunities to improve their service to customers and communities. By the end of 2017, AGA members that serve 72% of the natural gas customers in the U.S. will have participated in a peer review.

Second, proactively communicate why natural gas is the fuel of scale and reliability for a cleaner energy future. It is more critical today than ever before to deliver a direct message about natural gas’ contribution to economic growth and cleaner environment. We are working to communicate that story everywhere.

Third, we must continue to expand our infrastructure especially in our demand-constrained areas. We want to see effective and efficient permitting of natural gas pipelines that will enable more customers to access affordable energy.

PG&J: As you talk to other AGA members, what do they say are their biggest concerns and challenges today?

Norton: There is no doubt we have the natural gas resources to meet our country’s energy needs, but insufficient infrastructure is a challenge in certain regions. As cost and environmental benefits encourage more businesses and electric generating plants to use natural gas, we have to be realistic about the infrastructure requirements to meet that demand. During times of extreme cold in areas of the country without sufficient infrastructure, there can be competing demands for pipeline capacity. Natural gas utilities purchase firm contracts to make sure their customers’ needs are met, but it can be challenging in periods of high demand for power generators to meet the needs of their customers. Without infrastructure investment to help ease this pressure, we will continue to see these types of strains on the system.

PG&J: From your perspective, how is the industry faring in its effort to improve safety conditions through infrastructure upgrades and other initiatives?

Norton: We are faring well, and we continue to get better every year by spending more and more capital per year upgrading the nation’s natural gas distribution infrastructure. The safety initiatives of local distribution companies are rooted in our integrity management programs, which involve constant monitoring, assessment of risk and proactive steps to address those risks. Natural gas utilities are consistently working to install modern plastic pipes and pipes with cathodic protection, both connecting new customers and upgrading existing pipeline infrastructure. AGA works integrally with our members to support operational excellence and work with regulators, legislators and other key stakeholders to advance policies that enhance system integrity.

PG&J: The Trump administration has signaled greater support for fossil fuel industries, in general, and crude oil pipelines, more specifically. To what degree have recent political changes affected the outlook for natural gas utilities? 

Norton: It is still unclear how things will move forward under the new administration, but it is clear that any reasonable approach to achieving our national economic and environmental goals will include natural gas. Looking at some of the President’s expressed priorities, from building infrastructure to boosting our manufacturing base, natural gas will play a key role. Additionally, AGA has encouraged the U.S. Senate to nominate FERC commissioners who understand the natural gas industry, and we signed a letter to President Trump urging him to fill the vacancies at FERC as quickly as possible. Investments to improve our energy infrastructure are placed in jeopardy when FERC seats are left empty.

PG&J: Is there any pending legislation before Congress or rules proposed by regulators that are of particular concern to AGA members?

Norton: We are waiting to see how rules that began in the last administration will be continued or changed in this one. Chief among those are the Notice of Proposed Rulemaking for Gas Transmission and Gathering Pipelines from the Department of Transportation’s Pipeline and Hazardous Materials Safety Administration and the Department of Energy’s efficiency standards for residential natural gas furnaces. We are fully supportive of the intent of both of these regulations, but want to make sure that the final details do not put an undue burden on our customers or our ability to meet their needs. Sen. Rob Portman (R-Ohio) and Sen. Jeanne Shaheen (D-N.H.) continue to push energy efficiency legislation. Previous drafts have included some things that would help our industry, so we are keeping an eye on that as well. A possible reformation of the tax code is also of great interest to our members.

PG&J: There has been a great deal of political focus in recent months on growing the U.S. economy and creating more American jobs. How would you characterize the current and potential roles of AGA and its member companies in this regard?

Norton: Workforce development is a priority for our industry and a part of everything we do. AGA, along with the Edison Electric Institute the Nuclear Energy Institute and several government agencies, established Veterans in Energy, an employee resource group that provides transition, retention and professional development support to military veterans working in energy. AGA has our own Executive Leadership Development Program and a Next Level Leadership Women’s Program that continue to shape the industry’s leaders of the future.

PG&J: Overall, how positive is your outlook for the natural gas industry in 2017, and for LDCs in particular?

Norton: Our industry has seen remarkable growth, and the substantial investments that natural gas utilities are making in research and development of new technologies will contribute to ongoing growth.  Combined heat and power (CHP) is a good example of growth-enabling technology. Natural gas is the preferred fuel choice for CHP applications, which generate electricity at costs up to 50% less than traditional forms of delivered new baseload electricity. Many of our members are also working with natural gas in transportation, and renewable natural gas (RNG) is a growth area as well. I believe the outlook for our industry is very bright for 2017 and beyond.


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