Southern Co. Gas CEO urges industry to keep up advocacy, advance sustainability

Southern Co. Gas Chair, President and CEO Jim Kerr urged the entire natural gas value chain to continue working together on key long-term initiatives, even as political headwinds have given way to tailwinds.

Industry stakeholders need to maintain heightened cooperation, advocate for gas in regulatory venues, and advance policies that facilitate infrastructure expansion, Kerr said during a Sept. 9 keynote at the LDC Gas Forums Mid-Continent event in Chicago.

Additionally, he cautioned the industry against pausing sustainability initiatives, even in the current political atmosphere.

"It is incumbent upon all of us gathered here today to work together to ensure that the advantages from an affordability, reliability, dispatchability standpoint provided by natural gas remain part of the energy mix," Kerr said.

The change in presidential administrations contributed to the reversal of political and regulatory forces, but the shift also reflects more substantial forces, in Kerr's view. The prospect of an easy energy transition has been exposed as a myth, he said. Government officials and the public have become more focused on affordability, and energy demand is forecast to increase rapidly to serve data centers and other industrial customers, he said.

Still, Kerr encouraged the gas industry to stay focused on several issues.

Keep up collaboration

First, representatives of the US gas industry segments — from production to transmission to distribution — used to speak with a "fractured voice" on policy matters, Kerr said. Industry opponents took advantage of that as they challenged production at the wellhead, transmission project permitting, distribution system expansion and direct gas use, he said.

However, in recent years, the industry has worked more closely across segments and trade associations — and through events like the LDC Gas Forums — to address challenges, Kerr said. He encouraged stakeholders to continue that approach.

Second, Kerr said the industry needs to advocate for itself in venues such as future of gas proceedings, in which regulators in several states are seeking to align gas system planning with climate goals. Northern Illinois Gas Co., which operates as Nicor Gas and is a Southern Co. subsidiary like Southern Co. Gas, has been "heavily engaged" in the Illinois Commerce Commission's (ICC) proceeding, he noted.

According to Kerr, the industry learned a lesson in past future of gas proceedings: "If you don't show up, you're on the menu."

Kerr commended the ICC for its "thoughtful, collaborative approach." The ICC is hosting nearly two years of workshops to identify issues that the state's future of gas proceeding should address, workshop decarbonization pathways and priority pilot projects, and develop regulatory and legislative recommendations.

Kerr said he was encouraged that the National Association of Regulatory Utility Commissioners (NARUC) Committee on Gas in July passed resolutions in support of gas efficiency programs for commercial and industrial customers, pipeline and storage expansion, and distribution system extensions that bolster economic development.

Focus on major issues

Third, Kerr said the industry needs to prioritize two key issues: improving electric and gas system coordination and building new infrastructure.

The growth of intermittent renewable power generation and a lack of "robust" long-term storage technologies are placing larger, more variable demands on the gas system, Kerr said. The system was not designed to meet those demands, he said.

US Energy Secretary Chris Wright recently asked the National Petroleum Council (NPC), a federally chartered advisory committee, to conduct a study on enhancing coordination between the gas and electric sectors. Kerr is chairing that study. Kerr also noted that the Federal Energy Regulatory Commission's collaborative with NARUC has focused on the issue this year.

Wright also tasked the NPC with conducting a study on permitting reform, Kerr said. Kerr acknowledged that advancing permitting reform, a long-simmering issue, will be challenging in Congress, but expressed some hope.

Fossil fuel opponents have long used federal and state permitting processes against gas projects, Kerr said. Now that the Trump administration is challenging permits for renewable energy projects, Congress could finally reach a compromise, he said.

Eye on sustainability

Finally, Kerr warned gas companies against thinking they have a reprieve from addressing their greenhouse gas emissions. Continuing to tackle emissions offers a political hedge if and when political winds change, he said.

"If I'm investing in 50-year assets ... I don't want to bet on the political winds," he said. "I want to bet on the success of that asset."

Kerr said Southern Co. Gas is continuing to implement energy efficiency measures; procure certified natural gas, renewable natural gas, and RNG attributes; invest in RNG production; replace leak-prone pipe; and adopt new technologies to monitor and mitigate methane emissions.

"Even in the absence of political or regulatory forcing mechanisms, improving the emissions profile of the natural gas value chain makes good business sense," he said. "It derisks our investments in these long-lived assets, and it protects our longer-term opportunities."