If we could have every pipeline we wanted in the country to move around the
natural gas. How many pipelines are we need?
What would that look like? Yeah.
Well, first of all, the main issue that you think about when you're gas is
connecting the lowest cost supplies to the vast and demanding markets.
So that's that dictate. It's not we don't have a monolithic
pipeline. We have all these different basins that
we serve. Williams serves about 15 different
basins. But the Marcellus in the Utica is the
one that has been stopped over and over and over.
And this is really important because the Marcellus and Utica.
If we if if there were if it was its own nation, that region would be the third
largest gas producer in the world behind the U.S.
and Russia. It's an enormous gas resource and it's
the lowest cost that we have in the U.S. And it's now had three major pipelines
stop on it after spending 11 billion dollars that have been stopped trying to
get that gas to market. So where you get that gas out in the
Marcellus and Utica? How many what how many pipelines would
we need? What would be the couple gave?
So, you know. So in terms of constrained markets,
certainly New England, you know, in January, we were 30 percent of the power
generation was coming from fuel oil, which is six times more expensive than
Pennsylvania gas. And two and a half times more carbon
permits, CO2 emissions off of that gas. So there's all kinds of little loads
like that. But just thinking about the big
incremental markets. Coal generation here in the U.S., we
still have 230 operating coal plants here in the U.S.
and that's equivalent of about 11 to 12 B.C.
F a day. So a typical pipeline project is two to
two and a half. B.C.
FDA is kind of a typical large scale pipeline project.
So there's a lot of load. In addition to that,
we have the LNG market that is we have a six B.C.
FDA that is now under an F Haidi Lun under construction.
We're expecting about another 20 DCF a day.
And so just put that in perspective. Today we have about 14 RTS a day.
So it's a lot of pipeline infrastructure that we've got to get built to build to
serve that. The good news is we have plenty of
supplies between the Permian and the Haynesville and the Marcellus and Utica.
We have plenty of gas supplies to meet the demand, but we are not going to we
are not going to get it done if we can't unlock some of those bigger resource.
So you're a pipeline guy. So clearly one pipeline.
Right. But like, what would be the number one
game changer? I understand promoting a farm needs to
happen. It feels like that's becoming more of a
zakk. I see things.
But what is it? What's the one permitting reform you'd
wish for? Yeah.
So you know the boy talk about going nerdy on you.
Here it is. The Clean Water Act, which is the states
have politicized several of states like the state of New York, politicized the
installation of pipelines going through the state.
And the original Natural Gas Act, which are Federal Energy Regulatory Commission
was based on and was was held accountable for carrying out, have been
very much neutralized by things like the Clean Water Act, which gave the states
rights to stop projects. So you need states to get out of the
way. So the state, what they can be involved
through the NEPA process, but the NEPA process all comes under the firm for as
the lead agency comes under their review.
So we're not we're not suggesting at all that the state shouldn't have an ability
to come in, but they shouldn't shouldn't have their own separate veto.
Right. They ought to have to come through that
process. And if they have legitimate issues, let
the firm decide if those issues are legitimate or not relevant to the
overall good of the project for our nation.
So the IRA in theory is gonna pump a lot of money into many different things.
The energy transition in the US. Can any of it actually get done without
more transmission? You know, this this is one of the things
that gives me a lot of hope right now about permitting reform, because both
sides of the aisle are recognizing that permitting reform is holding us back on.
On infrastructure, on electric transmission that needs to be connect to
be able to connect in new renewables for hydrogen and hydrogen pipelines.
And so everybody is recognizing that our permitting issues in the US are holding
us back. Whether you're talking about utilizing
natural gas to reduce emissions around the world or whether you're talking
about adding more renewables. So I think that's a really positive
thing that there's really good alignment on that issue.
So in terms of your network, is there a way to get more flow in your existing
pipes? Can you make little expansions?
Can you make little things that you can do to increase the volume?
Yeah, sure. So, you know, we're at work.
We're doing a few of those projects right now.
I think we've got about twelve total projects now.
Six in. Instructions six that are that are in
very advanced stages of development, that are along, are existing right away,
where we'll do things like go in and either add new compression, we will pick
up pipeline and replace it with higher pressure pipeline or pipeline that was
previously degraded for population reasons.
We'll go in and solve those. So yes, we are definitely expanding our
systems, but we don't have that. That isn't going to solve 30 B.C.
FDA of incremental demand that we're looking at from these opportunities.
So we're looking at 30 B.C. FDA demands.
Yeah. Think about it.
You know, we talked about the coal demand that we should be taking out as
both economic and it allows us to reduce emissions in the same amount.
This is what really surprises people. Think about all the incredible effort
we're going into installing these. If we just replace the coal, the
remaining coal plants with gas fired plants and converting those plants, that
would be the same as taking all of the passenger vehicles off the road today,
not converting them to Eevee, which we didn't have to provide fossil fuels to
provide the power for literally taking them off the road.
So it's an enormous opportunity for coal.
So. So there's you know, as I talked about
earlier, and then in addition to that, you have the remaining LNG market, which
has got it six coming up and another 20 on top of that.
So, OK. So then let's move forward 10, 20 years.
Right. Everyone's going to be to everyone's
already talking to me about how natural gas pipelines can move hydrogen.
Super easy. No retrofitting, anything like that.
We can just get hydrogen. It's all good.
So true, there are a lot of issues to be dealt with.
Not all pipe is created equal. Depends on the age of the pipeline.
Depends on the carbon content of the pipeline.
So there are a lot of issues that the base pipeline material, though, which is
really the expensive part we think for the most part can be managed.
And it's been done in Europe. Europe's done plenty of this already
where they plant in hydrogen. So it's not like it can't be done.
There are places where you would have to replace sections of lines when the right
material. But a lot of it is just kind of smaller
stuff like the last hammers in the bowels.
If those get dried out by hydrogen, your valve.
So that's pretty small money, though. So you can.
Yes. So you say you have to do some kind of.
Yeah. I just say it's like, you know, we'll
just snap our fingers and make it happen.
There is effort to be done and there's work to be done to make sure that you're
still as compatible with the issue. What about blending hydrogen natural gas
together? Does that alleviate some of the
problems? Yes, and I'm sorry, I was answering the
question in the concept of blending, blending, just adjustment hydrogen.
So if you think about the market, though, could just just 2 percent
blending here in the U.S. would be more than the entire world
produces hydrogen today. So the market for blending is enormous.
And a lot of people will say, well, no, no, no, we're gonna have to we have to
have separate hydrogen systems into that.
I say, well, one good luck getting that infrastructure built, you know, from
somebody that's been up against that, number one.
Number two, that is really not a very fast path to make the
building those markets for hydrogen. And we've got it ready and available and
people will say, well, yeah, but not isolated and you don't want to combine
it with fossil fuels. The atmosphere does not know
whether that energy that was consumed was blended with an actual gas or part
of hydrogen. It has all it knows is that emissions
got reduced and it could care less whether the atmosphere could care less,
whether there was hydrogen singularly or blended.
And I think I think this is a great example of all the labeling that we do
that stands in our way of reducing emissions in the U.S.
is that we want to label things well, we don't want to mix that with those dirty
molecules. IT environment doesn't know any better.
So it's a fair point. Yes.
A couple more questions. Just it just becomes a macro point.
What are your highest costs right now and what is it like to try and hire
people? You know, one area that we've struggled
with initially was in the cybersecurity area, obviously is a very important
thing for pipelines. And so really getting really good
company. Been putting a lot of effort into our
cybersecurity. So that's been an area that's been tight
for us. We pay really good wages in the field.
And so we've retained our workforce very well.
And so we're not really terribly challenged on what input costs, input
costs. You know, for us,
it's steel for for building new projects and so forth.
And that really hasn't moved all that much on us.
Things like like lube oil and glycol and things like that that you know, that we
consume. Prices have gone up on that, but not
dramatically. So our prices have not gone up.
Certainly. The cost to capital is going up.
Obviously with interest rates coming up. But but I think that's healthy and to be
expected. Couple more questions.
Storage is gonna be huge in the energy transition.
How are you guys building out your storage network?
Like what does that look like for Williams?
Yeah. Well, we really think towards who's
gonna be critical. You know, one of the things that's
really fascinating is on both Northwest Pipeline, which serves all of the
northwest part of the country. And on Transco, which is the nation's
largest pipeline, we've seen 85 and 86 percent growth in the last three years
in renewables in those markets. So.
Eighty five percent growth of renewables power has been added into those markets
at the same time. Our peak demands on those two pipelines
have gone up and these are big, large scale pipelines and they've gone up by
14 percent and 9 percent. So as renewables keep getting added, our
actual incremental peak load continues to go up.
Now, that doesn't mean that doesn't mean that the total demand for gas, but we
sell capacity. Right.
So we don't care if it moved one day or 365 days.
We we self opacity. And so and so we've seen this kind of
volatility and demand continuing to increase.
And LNG is bringing that home in a big way, obviously in the mega.
That becomes a market. The more we're going to need when ships
can't get out of market, when the market's soft externally, there's not
storage like this around the rest of the world, you get a little bit.
So. So we are very much investing in
storage. And and we we bought some storage in
Texas last year that was critical to state staying off the winter storm that
happened this year. Our sorry, in December of last year.
And so were we really think storage as renewables get added more
electrification or electric heat loads and LNG loads?
We think storage is going to be very valuable, as is our pipeline capacity.
Last question, I ask all our guests what is going to power my car in 10 years?
And that's going to be what's going to flip my switch on to charge my Eevee.
It can be any of those things. Yeah.
Well, I mean, clearly, I think, you know, there's a big push for these and I
think that'll that that's going to occur.
I don't see that there's a whole lot of challenge to that,
that it will be a lot of BBDO. It's moving very it takes a long time to
change as many cars. And ISE obviously depends on, you know,
where you stand and your and how much you want to spend on a car, obviously.
But. But I think Phoebe's will be out there.
But I definitely think that gas is going to be an incredibly important fuel to
continue to power those cars. And so we're we'll be reducing emissions
as we if we can replace that coal fired generation with natural gas.
We'll be reducing a lot of emissions and we'll be partnering with renewables.
DEBELLE To back those up to power UVB. So.