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In challenging world, gas advocates seek common ground to pursue growth

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In challenging world, gas advocates seek common ground to pursue growth

Energy remains a polarizing topic, but gas utility advocates hope to continue carving out a larger role for natural gas in 2018.

"It is more of a challenge than I've ever seen, and I came to Washington [D.C.] in 1981," said Dave McCurdy, the American Gas Association's president and CEO. "There is more emotion and less fact discussion today than I've ever seen."

"We try to move beyond the emotional responses and try to provide more of an evidence-based discussion, but it also needs to be supported by those who actually feel it and have the passion for this. We're trying to combine the two," he said at a Dec. 8 AGA event in Washington, D.C.

Challenges abound for gas infrastructure expansion, said McCurdy and Kimberly Harris, Puget Sound Energy Inc.'s president and CEO who is also AGA's incoming chair. McCurdy and Harris acknowledged regulatory hurdles at the federal and state levels, where energy infrastructure builders find themselves pitted against activists opposed to fossil fuel use.

Meanwhile, the U.S. Department of Energy under President Donald Trump has questioned the reliability and resilience of the gas system as it relates to power generation, potentially impacting the gas sector's greatest source of demand increase in recent years.

Still, McCurdy sees potential alignment between the gas industry's needs and the Trump administration's priorities.

"As this administration is really focusing on economic growth, development and infrastructure … [gas expansion] is an opportunity to really help the country grow," McCurdy said. "Expansion is a big part of the future, and people do want it."

McCurdy and other AGA officials pointed to state initiatives that have helped utilities more cost-effectively build out their distribution infrastructure to reach unserved and underserved areas.

In Mississippi, for instance, two of the largest gas distribution companies have taken advantage of a supplemental growth-funding mechanism the regulator made available. The funding potential, in the form of a dedicated rider on customers' bills, should provide an incentive to bring gas service to major commercial, industrial and manufacturing projects. Ohio, too, has set up a mechanism for local distribution companies to add a rider to customers' bills to cover expansion costs when the build-out might not otherwise be economical.

Some utility expansion work targets environmental goals in addition to economic ones. In Washington, gas utilities have been working to convert customers from oil and wood heating to gas heating, Harris said. Gas emits fewer carbon emissions when burned, and unlike wood burning, it does not contribute to airborne particulate matter, she said.

"One of the number one letters that crosses my desk is customers saying, 'I want natural gas. Why can't I get natural gas?'" Harris said.

Puget Sound Energy is in the process of building an LNG facility at the Port of Tacoma. The facility was designed in part to be a reserve for local customers, but the anchor tenant is a maritime company that moves consumer goods between Washington and Alaska, Harris said. LNG fueling for ships is a business Harris expects to grow as more initiatives to reduce carbon emissions and other pollutants from this form of transportation take hold.

"This is a whole new area for us — maritime," Harris said. "Years ago … you didn't see many shipbuilders that were looking at dual-fuel capabilities, and now I think there is only one shipbuilder in the world that is not looking at dual-fuel capabilities. We are also seeing a lot of industry, such as cruise lines, that were trying to get waivers that are saying, 'No, actually we will move along this direction.'"