April 2019, Vol. 246, No. 4
Features
New AGA Chair Stresses Raising the Bar on Safety
When James Torgerson was studying accounting at Cleveland State University in Ohio, he was working full-time to pay his way, driving a tractor-trailer rig hauling steel. It was tough, but it led to a position with the Diamond Shamrock Corporation in Cleveland, where he clerked in the accounting department while still taking night classes.
With good mentors and a willingness to move around, Torgerson worked first in finance and then in coal operations before being recruited to Washington Energy Company in Seattle, which would later be acquired by Puget Sound Energy. Moving to the utility side was like a complete career change, but he flourished, eventually taking on the role of executive vice president and chief administrative officer.
Now CEO of Avangrid, Inc., Torgerson serves as 2019 chair of the American Gas Association.
P&GJ: How did your financial background prepare you for a role as CEO?
Torgerson: The breadth of experience gained by taking on a variety of roles of increasing responsibility helped prepare me for the position of CEO. Certainly, it’s useful to have an in-depth understanding of how companies attract investors, manage risk and fund their growth, so a background in finance is can be a real asset.
P&GJ: Avangrid has a strong commitment to renewable energy and is actively seeking to reduce its carbon footprint.
Torgerson: With one of the lowest carbon-dioxide emissions intensities in the industry, Avangrid is already one of the cleanest U.S. energy companies. Our CO2 targets are ambitious. Avangrid set the objective to reduce emissions intensity from owned generation power plants by 25% by 2020 (compared to a 2015 baseline) and to be 100% carbon neutral by 2035. In 2018, we have been able to reduce the CO2 emissions intensity by 7% to 49g CO2/ kWh (116 pounds/MWh), almost nine times lower than the U.S. utility average. This is a 22% reduction compared to the 2015 baseline, very close to meet our target and we are continuing to reduce that number as we develop new renewables capacity.
In 2018, the U.S. power sector continued to de-carbonize. Coal decline continued, dropping to 27%, the lowest share in the post-war era; Natural gas generation surged in 2018 to reach 35% of the nation’s electricity mix, a record. Renewables and hydro provide 17.7% of power.
Natural gas is the cleanest fossil fuel and produces less carbon-dioxide per unit of energy than other fossil fuel energy sources. For at least the foreseeable future, we believe natural gas will play a key role in ensuring a stable and reliable fuel supply as we navigate the transition toward renewable energy sources.
P&GJ: How does natural gas contribute to reducing our overall carbon footprint?
Torgerson: Increased natural gas efficiency and the growth of renewable energy have led to energy-related carbon dioxide emissions hitting 25-year lows. That trend will continue, but we are also telling the story of how using natural gas for direct use in homes and businesses for heating, cooking and clothes drying reduces emissions as well.
America’s natural gas utilities are working with customers to help them save energy and we are developing increasingly more efficient natural gas appliances and other natural gas technologies that offer pathways to achieve our shared goal of reducing emissions while maintaining affordability, reliability and the quality of life that Americans enjoy.
P&GJ: There are pockets of the country that have shown particularly strong opposition to pipelines and other energy-related projects. How can the industry address this?
Torgerson: In addition to the environmental benefits that I just mentioned, our domestic abundance of natural gas has made prices affordable and stable. More homes and businesses in the United States use natural gas today than ever before and the numbers continue to increase, but there are pockets of this country that do not have access to natural gas.
Homes, businesses, factories and electric generators have the capacity to efficiently utilize more natural gas, and the industry is working to extend its pipeline network to meet this demand. Gas utilities are working with energy planners, regulators and policymakers to bring natural gas – and the comfort and savings it delivers – to these new customers.
P&GJ: Did operating region influence Avangrid’s focus on renewable energy sources?
Torgerson: Avangrid is a national company that is focused on bringing the benefits of clean energy to customers and communities nationwide. Avangrid has two lines of business: Avangrid Networks, which distributes electricity and gas to 3.2 million customers in New York and New England; and Avangrid Renewables, which owns and operates 7.2 GW of capacity, including 6.6 GW of renewables capacity across 21 states, mainly wind. We are the third largest wind operator in the United States. We also have our Klamath 536 MW natural gas cogeneration with the adjacent 100 MW natural gas peaking plant, located in Klamath falls, Oregon. This gas generation facility helps us to balance the electricity demand needs in the North West providing additional energy output to our wind generation.
AVANGRID Networks owns a distribution gas pipeline of almost 23,000 miles to serve over 1 million customers in New York, Connecticut, Massachusetts and Maine. So, it’s important that we develop a pipeline transmission system that’s capable of supporting the increasing demand for natural gas.
P&GJ: How prominent do you think renewable gas will become in the U.S. fuel mix?
Torgerson: Renewable Natural Gas (RNG) is methane produced from farms, landfills and wastewater treatment plants. It is carbon neutral, versatile and fully compatible with the U.S. pipeline system. It can be used in homes and businesses, in manufacturing and heavy industries, for electricity production and in vehicles. Using RNG with next generation natural gas technologies further reduces emissions.
With the right policies and incentives, we see significant opportunities to integrate RNG into our natural gas supply. An analysis conducted by the Gas Technology Institute in 2011 determined that renewable gas has the potential to add up to 2.5 quadrillion British thermal units (Btu) annually – enough to meet the natural gas needs of half of the homes in America. Utilities throughout the country are embracing RNG, connecting existing waste facilities with end-users or providing customers the option to purchase RNG through their monthly bill.
P&GJ: Do you have any specific goals that you hope to accomplish during your term as AGA chair?
Torgerson: The theme for my year as chair is “A Commitment to Safety, Resilience and Innovation,” and I truly hope we can continue our great progress in all of these areas. From a safety perspective, I’d like to see our members continue to develop and adopt best practices so that we can raise the bar in providing a safe natural gas system.
As pipeline capacity becomes more of an issue in some regions, I’d like to see progress on approving pipeline projects to strengthen the resiliency of the system and help alleviate capacity concerns. I’d also like to see us working at the state level to support proposals that would help our members expand their natural gas systems and reach more homes and businesses. And I’d like to help our members identify and share innovations that can improve the safety and efficiency of their systems – such as in-line inspection, natural gas detection technologies and geographic information systems supported by augmented reality tools.
P&GJ: What are the top concerns among AGA members?
Torgerson: The safety of our natural gas system is always foremost on our minds – that means both physical and cybersecurity. AGA has a number of safety programs in place that give members companies the opportunity to enhance safety at every level.
For instance, AGA’s Peer Review Program is a voluntary safety and operational practices program that takes place over several days and features a panel of fellow gas utility professionals from North America who provide the company with feedback to help enhance its safety and efficiency. Afterward, they share leading practices and identify opportunities to better serve customers and communities.
AGA members that serve 83% of the natural gas customers in the U.S. have participated in this program. I’d like to see that number grow while at the same time companies are signing on for their second round of reviews and participating in Cyber Peer Reviews. We want to see public policy at the federal and local levels that recognize the role that the direct use of natural gas will continue to play in reducing greenhouse gas emissions. We are also focused on developing and maintain a 21st century workforce. Those are just a few of our top issues.
P&GJ: Are you concerned about how incidents such as Columbia Gas-Massachusetts’ over-pressurization and explosions affects public opinion of the natural gas industry?
Torgerson: Any safety incident that occurs on the natural gas system – particularly one with such tragic consequences – is of grave concern to our members and our industry. But the long-term picture regarding safety is one of remarkable progress. Our members collectively have made a major commitment to safety, which is demonstrated in adoption of a strong safety culture and ongoing process improvements, as well as investments in safe, reliable natural gas infrastructure.
These efforts have led to an approximately 50% decline in pipeline incidents over the past 30 years. Our members’ continued efforts to upgrade and modernize the natural gas pipeline network are improving safety, while reducing emissions.
P&GJ: Do you see or foresee lasting implications, in terms of regulatory or other response?
Torgerson: Certainly, the Massachusetts incident has brought additional attention to our business, but we’re not afraid of scrutiny. Our industry embraces safety as a core value, and every incident is an opportunity for introspection and improvement.
Shortly after the Massachusetts incident, our industry and its members identified and shared practices that can help avoid future incidents. We are always working with the industry, policymakers and the public to make a safer natural gas system and increases public confidence.
P&GJ: How has/should AGA responded?
Torgerson: Almost immediately after the incident, AGA started compiling information from our members starting with over-pressurization protection. AGA took those responses – about equipment, procedures, training – organized them, vetted them and identified leading practices. This document has been released publicly and shared widely within our industry. We will continue to work as we learn more about the incident so that something like this does not happen again.
AGA promotes the safe delivery of natural gas on an ongoing basis, providing a variety of services and resources for members including peer review, data collection, lessons learned, development of standards and emergency planning. In this instance, our Peer Review program has shown its incredible value because it not only helps the host utility and the professionals who participate, but it is a constant generator of best practices. That information, once it is properly vetted, is available to our membership on a rolling basis. We are making each other stronger and our industry stronger all the time.
P&GJ: How have developments such as Marcellus production growth and LNG infrastructure expansion affected thinking and long-term planning among utilities executives?
Torgerson: For the next decade and beyond, domestic natural gas supplies are expected to be sufficiently robust to meet growth in demand across all sectors and we keep breaking daily natural gas production records. So, there is additional room for wise and efficient growth of natural gas in today’s domestic energy market, including significant potential for demand in residential, commercial, industrial and transportation sectors over the long-term.
Market dynamics created by abundant supply resources have spurred the development of additional technology to enhance natural gas utilization. More research and development is necessary.
P&GJ: How well do you think the industry is doing when it comes to recruiting young people to its workforce?
Torgerson: The natural gas industry supports the employment of nearly 3 million people in all 50 states. But due to an aging workforce and talent shortages in critical areas, our members share with others in the energy industry challenges filling certain types of positions.
The good news is, there are a lot of exciting opportunities in natural gas right now, from renewable natural gas to critical infrastructure protection to drone-based leak detection. As an industry, we’re working hard to get the word out. Through industry organizations such as the Center for Energy Workforce Development and partnerships with academic institutions, our members are working to close the skills gap to attract, train and hire employees across a broad spectrum of jobs.
P&GJ: Other topics/questions you’d like to cover?
Torgerson: On Feb. 12, AGA announced that Karen Alderman Harbert will be our new president and CEO. We conducted a substantive search as part of a transition planning process by a search committee of AGA’s Board of Directors and Karen received a unanimous vote by the full Board. Dave McCurdy, who announced his retirement a year earlier, has done an incredible job leading AGA for the past eight years and the organization is in a very good place. AGA’s Board of Trustees is confident that Karen will build upon Dave’s success. When I introduced Karen to the AGA staff, she talked about the remarkable opportunities in the natural gas utility space. I look forward to working with Karen as we take the industry forward together. P&GJ
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