Monday, May 1, 2017

Our nation’s aging infrastructure is in significant need of investment and care if we want to ensure a secure future for coming generations.

While most people think of infrastructure in terms of highways, roads and bridges — things everyone can see — we must not forget the energy infrastructure that exists out of view of most of our fellow citizens.

The 2017 Infrastructure Report Card produced by the American Society of Civil Engineers rates our nation’s energy infrastructure as a D+, which once again sends a clarion call that we must address this issue as we consider our nation’s overall needs. When Congress takes up this issue, we must all work together to advocate for policies and investments that position our country for continued growth, energy independence and national security.

Technological advancements in our industry have enabled access to a wealth of previously inaccessible natural resources, both in the United States and globally. The U.S. Department of Energy estimates that shale development alone could increase globally recoverable natural gas by 32 percent. In the U.S., shale development could extend the potential life of natural gas reserves more than 90 years. Today, the U.S. is not only the leading natural gas consumer, we’re also the top producer in the world.

The natural gas surplus generated by the shale revolution has led to several benefits, including lower wellhead prices, reduced imports and rising inventories of natural gas storage. In addition, the cost of drilling new shale wells has dramatically declined. This means that fewer rigs are being employed, but new wells are more productive and cost-efficient.

Demand for natural gas is understandably high in multiple sectors, but particularly strong in the electric power sector, which is the largest consumer of natural gas in the U.S. The nation has reached a critical time to invest in its aging energy infrastructure — and the overall lower prices, combined with increased demand, make this an ideal time to do so, as well.

Lower energy bills are part of what attracts both customers and regulators to look more favorably at the prospects of infrastructure investment.

At WGL, we are working with our stakeholders to upgrade existing infrastructure and add new infrastructure to expand the availability of safe, affordable and abundant natural gas to more customers. Overall, WGL will invest more than $1.8 billion over the next five years in new or upgraded pipelines at Washington Gas, our utility business.

Our regulators in the District of Columbia, Maryland and Virginia have long recognized the need to invest in infrastructure and have supported Washington Gas’ mission to provide our customers with safe and reliable natural gas service. In each of these jurisdictions, Washington Gas has worked with our regulatory commissions to establish accelerated pipeline replacement programs. These programs — STRIDE in Maryland, SAVE in Virginia and PROJECTpipes in the District of Columbia — allow timely cost recovery associated with pipeline infrastructure investment while also helping to reduce greenhouse gas emissions. This is all happening at a time when, due to the low cost of natural gas, our customers’ natural gas bills are roughly 35 percent lower than 10 years ago.

We are also working to bring natural gas to more areas to meet the energy demands of our region. We are currently in the planning phase of a $34 million project to bring natural gas to Southern Maryland, one of the fastest-growing areas of the state. Natural gas availability increases energy reliability and spurs economic development by promoting and attracting growth of commercial, institutional and residential customers. Even with these planned projects, we are far from tapping the customer potential in our region, so we look forward to increased economic development opportunities.

In addition to our utility investments, WGL also understands the critical importance of investing in transmission infrastructure.

Along the densely populated Eastern Seaboard, for example, a robust energy distribution approach is vital to provide safe, cost-effective and reliable natural gas transmission and bring resources from the Marcellus shale formation to market. WGL’s Midstream business has made strategic investments to address this trend, acquiring ownership stakes in the Constitution, Central Penn and Mountain Valley pipelines. The Stonewall Gas gathering system, in which we have a 30 percent ownership stake, is already collecting approximately 1 billion cubic feet of gas every day.

Finally, we must recognize the role of new energy sources and technologies in planning for our nation’s energy future. While traditional fuels are a linchpin of that future, alternative energy solutions, such as renewables and distributed generation, are also critical to a secure and sustainable energy portfolio for our nation. At WGL Energy, WGL’s non-utility business, we are making these energy solutions more accessible to consumers, delivering a full ecosystem of energy offerings, including natural gas, electricity, solar and wind power, carbon reduction, energy efficiency and distributed generation. Realizing the full promise of these sustainable solutions requires additional infrastructure investment, as well as a comprehensive national energy policy that encompasses that full spectrum of energy answers.

There is no question that expanding and improving our energy infrastructure serves both the economic and security interests of the United States. Energy projects alone represent approximately 32 percent of the U.S. construction industry work force, or more than 2 million workers. Infrastructure investment is also environmentally responsible. Over the past 20 years, emissions from natural gas distribution systems have decreased by 36 percent — and as much as 70 percent — largely due to replacement of older pipeline materials. At Washington Gas, we have reduced our own fugitive emissions by 20 percent since 2008, surpassing our 2020 target of 18 percent by five years. Going forward, we have set a goal of reducing fugitive emissions intensity from our distribution system by 38 percent (from a 2008 baseline) by 2025.

It is continued investment in our energy infrastructure that will help us achieve this ambitious goal while also continuing to safely and reliably meet the energy demands of our customers, our region and our nation.

Adrian P. Chapman is President and Chief Operating Officer of WGL Holdings, Inc., and Washington Gas.

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