House Consumer Affairs Committee holds hearing on natural gas | Marcellus Minutes
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House Consumer Affairs Committee holds hearing on natural gas

Hearing:
The House Consumer Affairs Committee held an informational hearing on the Natural Gas Industry. Chairman Robert Godshall started by saying “the natural gas industry involves a coordinated process starting with drilling and production and ending with the delivery of this clean, cost efficient fuel sourced to homes and businesses across the Commonwealth.”
The first panel to testify included:
Teresa Ringenbach, Manager of Government and Regulatory Affairs – Midwest for Direct Energy, and on behalf of the Retail Energy Supply Association. Teresa explained common terms in the gas industry and the process from the well to the residential and business receiving the gas.
Terrance J. Fitzpatrick, President and CEO, Energy Association of Pennsylvania explained the makeup and purpose of the Association.  They advocate industry positions mostly to the PUC and the general assembly.  They also serve an educational role assisting companies in sharing best practices and sponsor conferences.
Peter Trufahnestock, State Legislative and Regulatory Affairs Consultant for Philadelphia Gas Works (PGW) said that PGW is the largest municipally owned utility in the country.  Their portfolio had declined because they were serving primarily residential customers and had lost many business customers.
Representative John Payne asked for a map or list of the aging pipe and what type of pipe is replacing cast iron.  Mr. Fitzpatrick said he would be happy to have a discussion about the state of the infrastructure.  He said he would not be an alarmist when it comes to the infrastructure. Fitzpatrick said they have data by company.
Representative Tina Pickett cited the recent disaster and asked what goes wrong.  Fitzpatrick said that both incidents are under investigation.  He said the biggest cause is excavation, but there are a variety of other factors.  Pickett asked if one call is working well. Fitzpatrick said overall it is working well but the penalties may not be sufficient.
Representative Julie Harhart cited the explosion in Allentown, noted the inspection two weeks prior to the incident and asked how could have missed the cause. Mr. Fitzpatrick again said that the investigation is ongoing and hoped that the answers would be forthcoming Mr. Trufahnestsock said that cast iron is very strong and meant to last over 100 years.  He said the smaller the pipe the thinner the walls.  He said that PGW has been replacing the smaller pipe.
Representative Brian Barbin asked what it would take to create the infrastructure to convert to NG for vehicles for private citizens.  Mr. Fitzpatrick did not have a figure but noted new lines, refueling stations and vehicles capable of burning it.
 Representative Todd Stephens asked about the recent actions of Philadelphia City Council to not use gas from the Marcellus Shale. Mr. Trufahnestock said there are two reasons it’s not possible. The first is it is not mechanically possible to and second  they are bound by law to buy cheapest gas.
Industry Panel:
Marcellus Shale Coalition, David Callahan and Barb Sexton (Chesapeake Energy)
Louis D’Amico, President and Executive Director of the Pennsylvania Independent Oil and Gas Association (submitted written testimony)
Rolf Hanson, Executive Director, Associated Petroleum Industries of Pennsylvania
David Callahan and Barbara Sexton provided a background of the Marcellus Shale and processes to extract the gas.  Rolf Hansen provided an overview of the API standards for well drilling and the products used in the wells.
Representative Pickett noted that Bradford County has led the state in new jobs and folks are interested in jobs, schools are offering courses. She asked if all courses are vetted by API? Rolf Hanson responded that it would depend on what the skill set of the job is.  If it’s specific such as welding it will.  If it’s more general it may not. On specific industry wide issues those will be trained to API standards.  He noted they are currently working with the Pennsylvania State System of Higher Education and are focusing more with Labor and Apprenticeship training.
Representative Barbin asked if they do standards that affect CARB (California Air Resources Board) that you could.  Hanson said that API standards are specific to oil & gas.  Barbin asked if the API has standards on biofuel vehicles.  Hanson said he would check and get back to him.
Chairman Preston expressed his interest in the involvement of women and minority involvement in the industry. He also talked about the mapping of infrastructure.
Chairman Robert Godshall commented that the marcellus Industry has provided hundreds of thousands of jobs and said the NY Times hatchet article was hard to take. He noted that American Water has been testing and will continue to do so.
The last panel included:
William Lucas, Executive Vice President, Equitable Gas Company
Matthew Sommer, Vice President of Natural Gas and Electricity, Shipley Energy
Bill Lucas noted that EQT has 260,000 residential customers and talked about the benefits that will result from the increased use of natural gas vehicles.  He said there are more than 12 million natural gas vehicles in the world but only 150,000 in the US and 1,000 in PA.
 
Matthew Sommer from Shipley Energy gave background on the company that provides services to over 50,000 central Pennsylvanians. 
 
Representative Brandon Neuman noted that if your vehicle is fueled by natural gas you can get a compressor at your home and refuel your vehicle overnight.
 
Chairman Preston cited the numbers of vehicles in other countries and asked how it can be promoted in PA. Bill Lucas said there has to be refueling infrastructure.  He also said the CARB issue needs to be amended.

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