American Gas - August/September 2014 - (Page 30)

R O U N DTA B L E for new opportunities to provide gas into that marketplace. "We need to be very planful as an industry as to how we're going to create burner-tip growth." -Suzanne Sitherwood "I think there is a shift coming in the whole area of incentive mechanisms." -Jim Laurito Mike McMasters, president and CEO of Chesapeake Utilities, Dover, Del.: We're a small company and we're generally serving rural or underserved areas, so that provides opportunities for us to grow that may not exist in a more urban market. The biggest single driver is the price differential that natural gas enjoys relative to propane, fuel oil, and electricity. In our markets there are industrial and large commercial companies that provide opportunities to expand by extending facilities; then after that, we're ﬁlling in with residential and small commercial customers. We're doing different things like creating or designing new services to facilitate conversions of residential customers, including paying for the conversions in some cases. And in some cases, we're getting rate recovery of those costs. Regulators are recognizing the opportunity for customers to save money by expanding natural gas service, so we're getting more ﬂexibility than we would have gotten 10 years ago. Arriola: The opportunities are probably a little bit different in each region. If you go to the Southeast, it's in replacing coal [for power generation]. In the Northeast, where they've got heating oil for winter load, you're talking about the introduction of natural gas. On the West Coast, there are opportunities in pipeline replacement and reliability and in new technologies like natural gas vehicles and combined heat and power. AG: What about LNG exports as a driver of growth? Kurmas: I think we need to temper our enthusiasm for LNG exports a bit until we truly understand the role shale will play elsewhere in the world. I think there's enough signiﬁcant shale developments with potential elsewhere, particularly in areas like Australia. Scott Prochazka, president and CEO of CenterPoint Energy, Houston: I think 30 AMERICAN GAS AUGUST/SEPTEMBER 2014 there is a window for LNG to happen here, but I think the impact on [LDCs] is relatively small. It is going to mostly impact, in my opinion, the long-haul shippers, the pipes, that type of infrastructure. Adams: I also think it has a chance to be a game-changer on the international price of gas. It is going to create a competition that Russia and the Middle East have not seen from natural gas exports. AG: What do you see as some of the biggest potential obstacles to growth? Arriola: I think the biggest challenge is for the regulatory lag on getting approval for new products and services like CHP. There's general acceptance that natural gas is part of the overall solution to the environmental challenges we have, and on its cost value. It's just getting the wheels in motion. McMasters: From a big picture perspective, clearly we have to operate our systems safely-that's not so much an obstacle as a risk. On the natural gas production side, with hydraulic fracturing, it's important that the industry does that in a manner that's environmentally responsible. In the markets we serve, we are also experiencing increased regulatory oversight on permitting of pipeline expansions. And then there's the challenge of aggregating load to make expansions economic. Laurito: We need to do a better job of educating and informing the public and community leaders of the many beneﬁts of rebuilding infrastructure, whether it's electric, gas, highways, bridges, or airports. If we don't, we will lose critical momentum by playing only defense in the face of growing and increasingly more aggressive public pushback regarding the build-out of critical facilities that will pay dividends for generations. Adams: It is polarized, too-there is strong "Do not build" sentiment, and then a strong "Why aren't you building?" sentiment. It really causes a lot of confusion for the regulators and the politicians. I have

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American Gas - August/September 2014