December 2017, Vol. 244, No. 12


Meet APGA Chairman Greg Henderson

Greg Henderson is the 2017-18 chairman of the American Public Gas Association (APGA). APGA is the national trade association for publicly owned natural gas utilities that are owned and operated by government entities rather than stockholders. There are over 1,000 public gas utilities in the United States and over 700 are members of APGA.

Henderson was appointed Alabama-based Southeast Gas’ president and CEO in 2006 after having joined the utility as director of finance and administration and CFO in 1998. Before joining Southeast Gas, he was employed by PowerSouth Energy for 12 years and PriceWaterhouseCoopers LLP in Birmingham for three years.

In addition to his work in the gas industry, Henderson serves on the boards of Economic Development Partnership of Alabama, Auburn School of Accountancy Alumni Advisory, Easter Seals of Alabama and CCB Community Bank. He is past-president of Alabama Natural Gas Association, Andalusia Chamber of Commerce, Andalusia Rotary Club, and LBW Community College Foundation. Henderson is a certified public accountant and a graduate of Auburn University with a degree in business administration/accounting.

P&GJ: Tell us a little about Southeast Gas.

Henderson: Southeast Gas was formed in January 1952 to provide natural gas service to the cities of Andalusia, Abbeville, Brundidge, Dothan, Elba, Enterprise, Eufaula, Fort Deposit, Greenville, Headland, Luverne, Opp, Ozark and Troy. Each of those cities owned, and still owns, an equal share of the gas district, and continues to be represented equally on the Southeast Gas Board of Directors.

Natural gas service was officially “turned on” on Nov. 1, 1955, after three years of construction to complete the infrastructure in Andalusia and the other 13 towns. Southeast Gas serves 29,000 residential, commercial and industrial customers in 35 communities and 18 counties throughout the southeast quadrant of Alabama, spanning a 12,000-square-mile service territory. Southeast Gas owns and operates 622 miles of transmission lines, as well as 1,568 miles of distribution lines.

P&GJ:  What are your top priorities for the coming year?

Henderson: APGA remains focused on the threats and challenges continuing to face public gas systems, and the natural gas industry as a whole. We have seen threats to natural gas at all levels, production, transmission and at the direct use level. In addition, the number of battlegrounds has increased as we have seen more activity at not only the federal level, but at the state and local levels.

Natural gas has a very strong and positive story to tell as it is abundant, affordable and domestically produced. Our current supply, and the benefits that natural gas provides such as reducing greenhouse gas emissions, indicate that natural gas can and should play a major role in meeting our energy needs now and well into the future. This is a message we will continue to communicate to the public and to other stakeholders.

P&GJ: What are some of the challenges to natural gas that you are specifically focused on?

Henderson: While we have seen threats to natural gas production and the construction of natural gas pipelines, APGA has been focused on threats to the direct use of natural gas. For example, over the past several years we have seen the Department of Energy push appliance-efficiency standards, such as in its proposed standard for natural gas furnaces, which we believe would have the effect of pushing consumers to electric appliances.

On a full fuel-cycle basis (which is the measurement of the energy consumed in the extraction, production, processing and transportation of the fuel to its point of use) the direct use of natural gas is 92% efficient. By contrast, electricity is only 32% efficient on a full fuel-cycle basis. If the goal is to increase efficiency, it makes no sense to propose standards that push people away from natural gas appliances.

P&GJ:  What about some of the opposition to natural gas you are seeing at the state and local levels?

Henderson: At the state level, we have seen initiatives that would ban hydraulic fracturing within states like Colorado that contain significant natural gas reserves. We have also seen efforts within states to oppose the construction of natural gas pipelines. In several cases, the groups opposing natural gas pipeline construction are comprised not only of those opposed to natural gas, but also those who oppose the use of eminent domain to obtain the rights to construct the pipeline.

At the local level, we have seen efforts to push city councils to adopt resolutions opposing hydraulic fracturing within their city boundaries. It is extremely unlikely that natural gas production would occur within the boundaries of the city councils that are considering these types of resolutions. However, this is part of a broader messaging campaign whose goal is to persuade stakeholders and the public that hydraulic fracturing is harmful to the public.

It is certainly true that all energy production, including hydraulic fracturing as well as renewable energy, have some impact on our environment. However, hydraulic fracturing is minimally invasive and has now been used in the U.S. more than a million times to increase production from oil and gas wells.

P&GJ: There has been much recent focus within the Department of Energy on the electricity grid. What role do you see the direct use of natural gas having in this debate?

Henderson: The direct use of natural gas has played and should continue to play a critical role in providing low-cost energy to consumers, reducing the strain on the electricity grid and enhancing our overall energy system resiliency. The direct use of natural gas provides significant relief for our congested electrical infrastructure, as well as primary energy for onsite, backup generators during grid outages. Absent the direct use of natural gas, APGA believes that the electric grid is unsustainable.

Given that natural gas pipelines are predominantly underground and therefore protected from the elements, natural gas infrastructure is not as susceptible to weather-related events. In addition, the natural gas transportation network is made up of an extensive system of interconnected pipelines that offers multiple pathways for rerouting deliveries to maintain service in the unlikely event of a physical disruption.

A recent example of our natural gas delivery system’s resiliency to weather can be found surrounding Hurricane Harvey which hit Texas in late August. The hurricane is responsible for over 70 deaths and the damage estimates have ranged from $70-200 billion in losses. However, CenterPoint Energy Inc., whose gas distribution service territory runs along the southeastern portions of Texas that were hit hardest, has continued operating normally despite the storm and unprecedented flooding.

P&GJ:  What is your view of the push some have made toward nationwide electrification?

Henderson: Good public policy must carefully balance the importance of maintaining a reliable, low-cost set of energy options for consumers while minimizing harmful impacts on the environment. The electrification movement inappropriately puts the environment at the center while eliminating energy options for consumers, jeopardizing the reliability of our energy system and raising the cost of living, while lowering the quality of life, for all consumers.

Electrification cannot be reliable with unreliable primary energy sources. A reliable electric grid must have diverse primary fuel sources to respond to stresses on the grid in real time. Environmental conditions dictate wind and solar’s ability to manufacture electricity; therefore, a real-time response is not guaranteed. Preserving fuel diversity is essential to the reliability of the nation’s energy system and its safety.

APGA’s members work to provide reliable utility services at the lowest price to their communities so that residents may thrive. The direct use of natural gas – not electrification – is the best way to achieve that goal.

P&GJ: How are you communicating your messages to the public?

Henderson: Our members have been heavily engaged in communications efforts at the local level. They have worked hard to directly communicate to one of our greatest assets – the consumers – the numerous benefits that are provided by natural gas.

APGA also developed the “Look Closer” campaign, which is a unified, national marketing campaign designed to help gas systems communicate the benefits of natural gas and increase the direct use of natural gas within their communities.

In addition, APGA recently formed a Core Communications Group to begin crafting a broad-based direct use of natural gas message that will be communicated nationally. The goal is to promote natural gas as an efficient, abundant and affordable fuel source in a manner that is relatable and accessible to the general public.

P&GJ: Turning to pipeline safety and operational issues, what are APGA’s priorities?

Henderson: We’re carefully watching the proposed transmission rule. Southeast Gas has over 600 miles of lines that PHMSA (Pipeline and Hazardous Materials Safety Administration) classifies as transmission – over 10% of all the transmission mileage operated by public gas systems. Because these lines are an integral part of our distribution system, we can’t shut them down to conduct a hydrotest or run smart pigs without massive disruption of service to our customers.

While only about 5% of the rest of APGA’s membership has transmission lines, we all get gas from the transmission system. What PHMSA has proposed will be very expensive, and you can be sure the pipelines will seek to pass those costs on to us. We have urged PHMSA to be very careful to ensure any costs they impose on the transmission sector are cost-justified.

And while it’s not a regulation, we are developing guidance to help members implement Pipeline Safety Management Systems (PSMS). PHMSA has urged operators to voluntarily implement PSMS, but there is little or no guidance for safety management for a public gas utility. We are taking the API recommended practice for interstate oil and gas pipelines and translating it into terms appropriate for a local distribution system.

A key difference between public gas systems and investor-owned pipelines is governance. APGA members are typically governed by city councils or utility boards rather than corporate boards of directors, so our guidance focuses on educating new board or city council members as to how they can foster a safety culture in their utility. Because we live in the communities we serve, we have an extra incentive to ensure that our gas systems are safe.

P&GJ: In April, PHMSA expanded excess flow valve installation requirements to multi-family residential and commercial service lines. How is that working out?

Henderson: Pretty smoothly so far. There was a learning curve on how to properly size EFVs for these higher volume applications, and it took time for EFV manufacturers to ramp up production, but we’ve not heard of any significant problems.

APGA developed some guidance to help members notify existing customers about EFVs, but with a few exceptions, very few customers have requested to have EFVs installed, even in those utilities that offer them for free. And many customers that request EFVs change their minds when they learn it requires digging up their lawn.

In closing, I believe the next few years will be a critical and defining period for the natural gas industry. One of my focuses as chairman of APGA has been to ensure that we have the resources needed to fully meet the challenges we are facing now and into the future.

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