April 2018, Vol.245, No.4

Features

INGAA’s Bruner Seeks Unity Within Natural Gas Industry

In electing Iroquois Pipeline Operating Company President Jeffrey Bruner as its chairman, the INGAA Board of Directors chose a true pipeline veteran in every sense of the word.

In his current position, which he has held for the past five year, Bruner has overseen the safe operation of a 416-mile interstate natural gas pipeline system that connects with TransCanada at the U.S.-Canada border, extending through New York state and western Connecticut to Commack, N.Y., and from Huntington, N.Y., to its terminus in Hunts Point in the Bronx.

It is this experience, along with the two decades he served as Iroquois Gas vice president and general counsel, and eight years spent at Transco Energy’s legal department, that makes Bruner abundantly qualified to serve INGAA.

“As the chairman of INGAA, Jeff will lead our industry’s efforts to promote pipelines as the essential link in achieving natural gas’ potential as a solution to the nation’s energy, environmental and economic challenges,” said INGAA President and CEO Don Santa. “Jeff’s experience and expertise also will guide INGAA’s efforts to ensure safe operations and responsible construction.”

In this P&GJ interview, Bruner, who is also on the Board of Directors for the Northeast Gas Association (NGA) and a member of the Society of Gas Lighting, discusses – among other topics – INGAA’s priorities, regulatory obstacles facing new projects and the potential effect of the Trump administration on the industry.

Jeffrey Bruner, Iroquois Pipeline, INGAA
Jeffrey Bruner oversees a 416-mile interstate natural gas transmission system

P&GJ: Where are you from, and how did you decide on a career in the natural gas/pipeline industry?

Bruner: I was born and raised in Denver and attended the University of Denver, where I received an undergraduate degree in business and a law degree. Which brings me to the second part of your question. When I graduated from law school, I had no idea what I wanted to do. It just so happened that John Carver was a professor at the University of Denver Law School. Unbeknownst to me at the time, Mr. Carver was a former member of the Federal Power Commission (the predecessor of the FERC) and also a member of the Transco Energy Company board of directors.

He always wanted a University of Denver Law graduate to go to work in the legal department at Transco. So in my third year of law school, Transco interviewed University of Denver graduating students for legal positions. The rest, as they say, “is history.”

P&GJ: What will INGAA’s chief priorities be during your term as chairman?

Bruner: I have three main priorities as INGAA chairman this year:

  • Educate Americans that natural gas is an essential part of a diverse mix of complementary energy resources that will meet our nation’s current and future needs.
  • Promote regulatory reform that further solidifies the necessary over-arching role that our federal government plays in permitting interstate natural gas pipelines.
  • Promote INGAA members’ commitment to safe and responsible pipeline construction and operation.

P&GJ: Where do you expect the majority of construction to take place over the next two or three years? What type of projects will most of those be?

Bruner: Building upon what we’ve seen over the past several years, pipelines will continue to be built from new prolific fields, like the Marcellus, that can safely and economically move natural gas from the wellhead to market. We’ll also continue to see a fair amount of construction that reconfigures the existing pipeline network to accommodate this new supply. That could mean changing the direction of some pipelines, adding new capacity to allow gas to flow to market hubs and developing lines to feed new demand in various regions.

The INGAA Foundation is working to update its long-term midstream investment report, and we will be able to provide you with the latest on where we see additional needs once that report is completed, hopefully in the late second or early third quarters of this year.

P&GJ: Do companies seem to be having success in raising investment capital for new infrastructure projects?

Bruner: In short, yes. For companies that demonstrate market need in the form of long-term contracts with committed shippers, capital is available. The good news for pipelines is that both producers and end-users are calling for new pipeline capacity, and many are backing up that desire by making long-term contractual commitments to new pipeline transportation capacity.

P&GJ: Besides permitting, what regulatory obstacles does INGAA feel hamper pipeline development?

Bruner: Permitting really is the big one. This includes a host of issues that INGAA will work on this year, including encouraging concurrent reviews by federal agencies and ensuring that states cannot abuse their federally delegated permitting authority.

The framework for interstate natural gas pipeline approval under the Natural Gas Act serves the nation well. While we do want to see more coordination of the permitting process among the various federal and state agencies, the FERC process works well, and we will aggressively engage policymakers to ensure preservation of what has proved to be a most effective means of permitting new pipeline infrastructure.

P&GJ: Where are we at on gas/electric integration, and what are some of the challenges that need to be dealt with?

Bruner: Probably the biggest challenge is happening in my home region – New England. In New England, natural gas and electricity prices tend to skyrocket during periods of peak demand due to a lack of pipeline capacity that can accommodate the needs of both local distribution companies and electric generators whose primary fuel is also natural gas.

Despite New Englanders paying the highest electricity and natural gas prices in the U.S., the region hasn’t increased pipeline capacity to alleviate bottlenecks. Why? First, given the economics and regulation of the pipeline industry, new pipelines are not built on speculation. A pipeline company is unlikely to make the capital investment, and FERC is unlikely to determine need, unless customers are willing to enter into long-term firm contracts for a proposed pipeline.

Second, while the incremental demand for natural gas in New England is represented principally by electric power generators, the wholesale power market rules in ISO New England do not reward generators for holding firm pipeline capacity, i.e., there is no assurance that the cost will be recoverable in the prices at which generators sell electricity. These two points taken together make it difficult to obtain the necessary financial support and permits to build new infrastructure.

In addition, the efforts by states, such as New York and New Jersey, to use their federally delegated authority under Section 401 of the Clean Water Act to block interstate natural gas pipelines that FERC has found to be in the public convenience and necessity frustrates the ability to expand the delivery of natural gas to regions where there exists demonstrated market need.

An example of this is the proposed Constitution Pipeline that would connect the prolific Marcellus shale in Pennsylvania with two existing interstate pipelines in New York, both of which serve parts of New England. New York’s energy roadblock and resulting denial of a Section 401 water quality permit for the Constitution project, thwarts the interstate commerce that would connect natural gas producers and consumers in neighboring states.

P&GJ: Do your members feel the Trump administration’s policies will affect the industry in the short term? If so, in what ways?

Bruner: The White House infrastructure proposal, which includes some pipeline permitting reform, is a good start. Unlike many other infrastructure projects, such as bridges and roads, pipelines are privately financed and do not require government funds.
Indeed, the pipeline industry is not looking for government money, but instead a more predictable, coordinated and transparent permitting and environmental review process. To date, we’ve been pleased that the White House proposed regulatory enhancements that could help us along that path, and we hope that Congress will engage on these issues with lasting regulatory reform.

Still, to get back to my point about the state of New York’s energy roadblock, these efforts will not be fully effective unless the opportunity to seek effective relief from abuse of Section 401 of the Clean Water Act is addressed.

P&GJ: What steps has INGAA taken to push back on opposition to new pipelines?

Bruner: INGAA has a strategic communications initiative called America’s Energy Link that continues to highlight the benefits of natural gas and pipelines. INGAA members also work every day to try to communicate that message.

As we attempt to redirect the increasingly contentious fuels debate in a more positive direction, interstate natural gas pipelines and others in the natural gas value chain must emphasize the multi-faceted benefits of natural gas throughout our economy, including its compatibility with renewable sources of energy. We must increase public awareness of the attributes of natural gas – a clean, reliable, affordable and domestically abundant fuel that has helped reduce greenhouse gas emissions by 11% over the past 12 years.

P&GJ: Overall, how positive is your outlook for the natural gas pipeline business for 2018?

Bruner: In a word, “extremely.” Billions of dollars in capital dedicated to natural gas pipeline expansion is expected to be brought on-line during 2018. That said, there’s no denying that there are voices raised against pipelines, but I honestly believe that this very loud voice represents a rather small portion of the population.

Most Americans want reasonably priced, clean energy, and natural gas fits that bill. And pipelines are the safest and most efficient way to get that natural gas to market. For that reason, I’m optimistic not only for 2018, but beyond.

P&GJ: Can you pick one thing you would most like to see accomplished during your time as chairman?

Bruner: I’d like to see our message get more on point – for the average American to understand that natural gas and the pipelines that deliver this clean and domestically abundant energy source are a very necessary component of an appropriately diversified and highly reliable energy portfolio – a portfolio that offers the average consumer resiliency in times of disruption and crisis, and one which offers economic advantages to all consumers, not just those who can afford it.

I’d like for the average energy consumer to understand the value that natural gas brings in complementing our nation’s on-going pursuit of increased levels of renewable energy and for them to value the role that it plays to counter the intermittency concerns that result from an over reliance on renewable energy sources.

Over the years, INGAA and other natural gas groups have individually expended considerable time and resources telling our story, and it is a good story, of the safety and advantages of natural gas.

However, if I were to choose a single focus of our trade organization, it would be for INGAA to work in greater cooperation with the other segments of the natural gas industry to develop our own unified, succinct and emotionally charged response to our naysayers – a passionate message that conveys the facts while rebutting the fear-mongering of those who would say “keep it in the ground.” This is our mission, and I welcome the challenge of helping guide INGAA throughout the year to achieve success in this area of communication. P&GJ

 

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