Ships, storms and cyber among energy industry priorities this year

Published on February 15, 2023 by Hil Anderson

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The Consumer Energy Alliance (CEA) hosted a gathering on the sidelines of this week’s National Association of Regulatory Utility Commissioners (NARUC) Winter Policy Summit to run down some of the industry’s regulatory and policy priorities for the year. Presentations focused on familiar issues including grid resiliency and cybersecurity, as well as the possibility of some major changes in the maritime shipping industry that will wind up on the regulatory plate this year and beyond.

“We are behind an ‘all of the above’ approach to energy options,” said Marc Brown, CEA Vice President, State Affairs. “If there is an energy source out there, we ‘ll support it.”

LNG needs space on the waterfront to serve cargo ships

Regulators in coastal states will likely see some new activity in the natural gas sector as the global shipping industry continues its shift from diesel fuel to liquefied natural gas (LNG) to cut its emissions of greenhouse gasses and particulate matter.

A new generation of massive container ships powered by LNG will be setting sail in the coming years, but as is the case with electric vehicles, America’s port cities are currently experiencing a dearth of the infrastructure needed to refuel ships with LNG.

Currently, most vessels run on “bunker” fuels, primarily a marine-grade diesel fuel that spews out a large share of the world’s nitrogen oxide, sulfur oxide and a particulate known as carbon black.

While LNG has its own detractors, Bruce McKay, senior director of External Affairs at Berkshire Hathaway Energy’s Gas Transmission & Storage division, said LNG was becoming the fuel of choice for the shipping industry and U.S. ports will need to add the infrastructure necessary to supply them with the complex fuel, which has to be pressurized and cooled to a dizzying -260 degrees to bring it to a liquid state.

“You generally don’t pull a ship up to something like a gas station to refuel,” McKay said. “The fuel needs to be brought to them by truck or by another ship.”

“There isn’t nearly enough LNG infrastructure,” said McKay, who added that regulators could expect to see increasing pressure from end users to establish the rules required to begin the buildout and ensure reliable LNG supplies at major seaports.

Section 5, cybersecurity still an issue for gas industry

The American Public Gas Association (APGA) took a meeting with the Federal Energy Regulatory Commission (FERC) shortly before the NARUC summit convened and placed some familiar topics on the table.

Detailed standards for cybersecurity in the gas industry were among this year’s goals as is the latest campaign to reform Section 5 of the U.S. Natural Gas Act.

The outcome of the meeting wasn’t reported but the non-profit association received NARUC’s endorsement of a proposal that would lead to larger refunds for gas companies who allege they were overcharged by pipeline companies. Stuart Saulters, vice president of Government Affairs for APGA, said they were seeking to tweak Section 5 to give FERC the authority to grant refunds to the gas companies if determined they were indeed overcharged. Currently, the Gas Act only allows FERC to reduce transmission rates going forward.

Electricity companies, however, are allowed to seek refunds under the Federal Power Act, and the APGA says the gas sector needs the same protections in the current commodities environment. “We can agree that volatility in gas prices isn’t going away anytime soon,” Saulters said.

Cyber threats are also unlikely to go anywhere.

The APGA is certainly not alone in its concerns over cybersecurity, especially after hackers suspected of being attached to Russia’s spy services last year launched a concerted malware attack on the U.S. energy system, which Politico reported this week came close to knocking out at least part of the grid.

Saulters said the sharing of information among a wide variety of companies and utilities involved in the gas system, plus the trove of utility customer billing information linked to their systems made it critical to standardize best practices along the entire supply chain. “We would still love to have the support of regulators when it comes to information sharing,” he said.

Entergy looks to fortify grid in storm country

Cybersecurity is one part of the discussion on grid reliance, and Leroy Nix of Entergy urged policymakers and regulators not to lose focus on another emerging threat to the grid, the increase in severe weather that is becoming uncomfortably common in the Deep South where New Orleans-based Entergy serves some 3 million customers.

Nix, who was named vice president of Strategic Policy and Stakeholder Engagement last fall, said Entergy’s customers in Texas, Louisiana, Arkansas, and Mississippi might not be able to do much about the region’s wild weather, but they still demand reliable service like any other state. “What our customers expect is that we remain reliable and that we show up for them.”

“Sometimes you can’t anticipate events, but you can mitigate them,” he added. “So it probably makes sense for us to put some additional emphasis on hardening the grid.”