June 2023 Vol. 78 No. 6
Inside Infrastructure
DCA/AGA workshop provides forum on wide range of topics
EDITOR’S NOTE
Eben Wyman is a veteran advocate for key underground utility and pipeline associations. He can be contacted at eben@wymanassociates.net.
In late March, the Distribution Contractors Association (DCA) and the American Gas Association (AGA) held the 8th Annual DCA/AGA Workshop in Chicago, Ill. The event brought together some 150 gas distribution operators, contractors, manufacturers and other service providers to discuss and evaluate ways to communicate and collaborate effectively. The workshop also offered a forum to address the more impactful issues facing the industry and hear varying positions among participating stakeholders.
The 2023 workshop featured presentations and panel discussions on enduring challenges related to operator qualification requirements, workforce development in the gas distribution construction industry, pipeline safety management systems, and damage prevention. In addition, some new subjects gained national attention, such as increased use of hydrogen as a sustainable energy source, and promoting carbon capture, use and storage efforts.
At the conclusion of the workshop, the hope was that attendees had a better appreciation of current sentiments of these issues and related positions held by local distribution companies and the contractors who work for them.
Workshop roots
After introductions and opening remarks made by DCA and AGA executives, workshop participants heard from a panel of local distribution companies (LDCs) describing specific strategies employed by operators and contractors to improve productivity, safety and risk management, and facilitate regulatory compliance. By sharing information and promoting collaboration, these strategies can lead to more effective engagement of customers, project bidding and decisions about preferred construction methods.
The central message of the session was that better collaboration can result in higher levels of both safety and effectiveness. While always important, collaboration is especially important now as the nation begins to turn toward electrification of utilities and increased use of clean energy sources, such as hydrogen and captured carbon dioxide.
Of course, current challenges facing the industry, such as rising costs of fuel, materials and other supply chain issues, come into play. If contractors feel like they are considered an extension of the utility workforce, the more they will feel comfortable collaborating. A clear scope of work will also enhance collaboration – operators on this panel agreed that pre-construction meetings are a great way to begin enhancing trust and cooperation between operators and their contractors.
Compensation methods were also addressed in this discussion. Master Services Agreements (MSAs) were compared with other compensation approaches, and that sometimes the “back-and-forth” of service agreements can slow down the process. Haggling over specific job functions often wastes time unnecessarily, and panelists suggested that MSAs can be preferable because parties are able to lock in prices for the entire project and/or over a set period of time. Operators who bring in contractors early in these discussions will find these processes more beneficial.
Legislative issues
AGA provided an informative presentation on legislation facing the natural gas and pipeline industry. While there has been significant action within the federal government, much of the debate over the future of natural gas is happening at the state and local level. Some municipal and state policies are currently pushing to ban or restrict access to new natural gas connections, while others are doing what they can to prevent such restrictions from being enacted through preemptive measures that ensure “fuel choice” for consumers.
The discussion began with the “good news.” Natural gas remains popular with the American people, including in states pushing for mandatory electrification. For example, residents in the state of New York, where transporting natural gas recently has been next to impossible because of permit restrictions, strongly support natural gas.
Recent polling found that 87 percent of New Yorkers want access to natural gas, and 77 percent oppose efforts to move away from gas service. In addition, stakeholders who rely on natural gas services, such as restaurants, expressed even higher levels of support. The fact that the number of new gas customers continues to grow nationwide does not seem to pair with shortsighted efforts to restrict access to natural gas.
There are several other states that have taken significant action. In parts of Oregon, for example, there is a gas ban on the state ballot, giving consumers the opportunity to actually not to have it imposed on them by sometimes unelected officials.
The debut of the movie, “How to Blow Up a Pipeline,” is unfortunate and premiered in several states with big college towns. While the impacts of this film are not yet known, pipeline operators are paying special attention to some of the security measures taken to keep trespassers off of pipeline job sites, and associations are advising state and federal agencies about the film and possible criminal activities by misguided advocates.
The discussion then went on to some of the “bad news” coming out of federal agencies, such as the U.S. Department of Energy and the Consumer Product Safety Commission, that have proposed and implied the need for policy to either ban gas stoves and other appliances or set emission standards at levels that would essentially invalidate use of natural gas. In addition, the industry has seen negative actions from several other federal authorities, including the Environmental Protection Agency and Federal Energy Regulatory Commission.
Scrutiny of line extensions and even pipe replacement continues to increase. While 23 states have enacted some type of “fuel choice” legislation, with another six in play, efforts to quash consumer choice through mandatory electrification are expected to continue.
Although the majority of states have indicated they want fuel choice and the untenable goals of some overzealous activists are becoming more transparent, this is no reason for the industry to rest on its laurels. The need to continue efforts to rebut unwarranted and sometimes blatantly false claims, relating to post-meter gas emissions with harmful health impacts, remains.
Hydrogen pipelines
Hydrogen is obviously gaining additional attention, as utilities consider carbon reduction initiatives. A session led by an AGA member company described how hydrogen pipeline systems and blending higher levels of hydrogen in existing natural gas pipeline infrastructure can efficiently and effectively create, capture, transport and utilize hydrogen at much higher levels in the future.
On the “path to net-zero,” hydrogen offers a range of benefits. Considered by some as the “Swiss Army Knife” of energy, hydrogen can essentially provide the same service as natural gas, but without emissions. Some operators are conducting pilot projects to test different blending approaches in states like Utah, Ohio and North Carolina.
Blending percentages are being tested to gauge reliability, sustainability and affordability. The main push is to reach 20-percent blending of hydrogen everywhere there is interest. The task force conducting these pilots establishes standard operating procedures, operator qualifications, training and safety procedures as part of these tests.
Hydrogen hubs are also being formed and expanded to see if they may minimize the cost of infrastructure. Hubs are getting major press in several parts of the country, including Appalachia, Northeast, Midwest, Southeast and West. Bringing in academia, operators, contractors, and other stakeholders, 20-percent hydrogen blending is the most common level, although some are already talking about 40 percent.
Effects on steel lines are getting an increasingly hard look, both in possible percentage levels and possible impacts on welding procedures. Much is still unknown, but increased attention on hydrogen is expected to lead to more opportunities. Questions remain about future hubs and whether states will “go it alone” or band together to create regional hubs.
OQIP
The OQ Integrity Coalition continues to pilot test the Operator Qualification Integrity Process (OQIP) approach and raise the bar on operator qualification. Pilot Programs in the Southwest, Northwest and Michigan are ongoing. Representatives from the OQIP pilots provided a panel discussion on the status of their programs, initiatives and contents identified in their recently released “White Papers” about each pilot. Panelists discussed their implementation processes, lessons learned, and other points discovered during their pilot execution and deployment.
The OQIP effort joined together operators, contractors, service providers and government representatives to improve the integrity of the OQ process through increased consistency. By doing so, the hope is that contractor OQ programs will be more acceptable to a wider range of operators and bolster OQ integrity at the same time.
Cyber/Security initiatives
Cybersecurity of pipeline infrastructure and general security issues carry national and regional concerns that LDCs, engineers and contractors all must understand. Workshop attendees heard from an LDC operator about how known cybersecurity threats are addressed, the importance of cyber hygiene, pending regulation and tools to help mitigate rising security threats.
The Transportation Safety Administration (TSA) is strongly interested in pipeline cybersecurity following the Colonial Pipeline ransomware incident. Directives are intended to provide for quick and effective mitigative measures that address both cyber and physical security threats. Meanwhile, AGA and other pipeline groups are holding roundtables and in-person meetings with government entities to share information and provide authorities with material about their security programs (cyber and physical).
Right now, the scope of these efforts may be too broad and narrowing dependence on IT networks should be considered. Onsite compliance audits are always a good idea, and many stakeholders hold Junely meetings with regulators.
There are legislative efforts to increase criminal penalties for physical attacks on pipelines. Congressional offices are asking for evidence that this is still a problem in the industry. AGA indicated it has supporting data and agreed to share it with DCA, when available.
Workforce efforts include leadership
Workforce capacity challenges continue to threaten all stakeholders in the gas distribution industry. A panel of contractors, operators and service providers provided a discussion of how they are applying innovative solutions associated with recruiting, developing, retaining and rewarding a new-age workforce.
With the COVID-19 pandemic driving many into early retirement, industry is trying to create attractive opportunities for potential candidates. Managers are dedicated, but working too many hours without enough support. When asked how many companies in the room maintained leadership development programs, not many hands were raised. While influence can equate to leadership, it’s important to be careful when transitioning technical workers to managerial positions, as they carry different skill sets.
Panelists described a leadership development program that distinguishes between management and leadership, considers emotional intelligence, provides feedback and coaching, and responds to worker needs and inquiries. On-the-job training videos and other ways to grow leadership skills need to be continually refined and improved in order to explain leadership opportunities for all interested.
Recognizing that most personnel are located on construction sites, leadership programs must be set up to identify who is excelling in the field.
Barriers to effective leadership development include costs to initiate, maintain and improve leadership opportunities; time needed to fully advance opportunities; and budget cuts, where leadership development is an easy target. Remote work is doable, but virtual learning is different and effective leadership programs will reflect that.
The panelists encouraged stakeholders to consider developing leadership development programs as a way to retain the best-of-the-best in pipeline and gas distribution industries.
Implementation of SMS
The cyclical, top-to-bottom approach offered by pipeline safety management systems (SMS) continues to be embraced and promoted by all sectors of the industry. LDCs continue to integrate SMS into their operations and are increasingly working with their contractors to provide a cohesive transition to safety management.
DCA established a task force in 2018 to support SMS efforts from a contractor perspective and developed an SMS template for contractors to consider. Working with several industry associations, the task force has made a variety of tools available to contractors.
A panel of task force members provided an update on contractor efforts to implement SMS in the gas distribution construction industry. The discussion began with describing some of the misperceptions of SMS, starting with concerns of being overly prescriptive.
SMS is fundamentally about instilling and maintaining a culture of safety and striving for continuous improvement – not just another safety requirement to comply with. Contractors need to know that it’s alright to recognize that they are not fully engaged in SMS. “Just learn that and act on it,” according to one panelist.
Gap analyses are imperative, and contractors need to take a hard look at the “plan-do-check-act” process that is central to initiating any management system. SMS starts with the safety department and then must spread throughout the organization. All personnel must be engaged, including large companies operating in multiple areas.
An important distinction was raised about SMS and operator qualification requirements. OQ is much more prescriptive, with specific requirements regarding covered tasks and acceptable methods, while SMS is all about creating a safety culture as a “way of doing business.”
When it comes to the best available resources, panelists suggested that contractors start with their LDC customers, who are increasingly bringing contract personnel in to discuss and even help advance their SMS programs. The SMS Industry Team, which DCA is a member of, maintains a wide range of resources (contractor guidance, assessment tools) and the DCA SMS template is available to all contractors.
The template was based on API 1173, API 1177 on quality management systems (QMS), and an AGA white paper on QMS. There is also an industry team on LinkedIn that provides several virtual roundtables featuring SMS experts that both operators and contractors would benefit from.
The panel also discussed safety culture surveys, which provide gap analyses by which a company can gauge where it is on its SMS journey. Quality management is critical to a contractor’s SMS. QMS factors address construction operations, as much as (or even more than) API 1173, which obviously focuses on pipeline operations.
Mutual aid
Mutual aid performs a significant role in providing supplies, personnel, materials and equipment when a disaster hits a region. An AGA member provided a thorough presentation about mutual-aid coordination and lessons learned from recent events, specifically regarding a case study.
In the midst of wildfires, there was an incident in Boulder County (Colorado) where 6,000 acres burned in less than 24 hours, destroying 1,100 structures and cutting gas service for 13,000 customers. The operator was able to respond very quickly, providing 10,000 free space heaters and a dedicated ‘hot line’ to communicate with customers. Main and service lines were replaced, and door-to-door relights were provided with ample support from utility partners and a wide range of contractors.
The mutual-aid process worked very well, with details of needed resources, logistics and clear descriptions of protocols/procedures provided to all involved. One key point made is the need to infuse emergency management into the fabric of the effort, with attention paid to environmental protections, strong preparation (educate, train, drill), and a concerted effort to drive collaboration. Solid procedures must be developed and checked regularly.
Damage Prevention Institute (DPI)
The second day of the workshop began with a presentation on the Common Ground Alliance’s (CGA) Damage Prevention Institute (DPI), which was designed to merge the efforts of CGA and the Gold Shovel Association (GSA) into a metrics-focused, peer-reviewed model of shared accountability that serves all stakeholders. DPI is looking to provide systematic approaches to damage prevention, using CGA best practices, data from CGA’s DIRT program, root causes of damages and some previous work of GSA.
According to DPI, the majority of damages (75 percent) are attributed to six root causes. These have been consolidated into a few critical issues that are now the primary focus at CGA, including effective use of 811, problems with responses to locate requests (failure to mark/mismarks), failure to pothole, etc. Excavators say that locating issues are the leading challenges and report downtime regularly because of these problems.
DPI believes there are opportunities in areas such as electronic white lining and increased utilization of geographic information systems (GIS). GIS offers one of the best mapping technologies available, and security/privacy concerns can and are being addressed in certain parts of the country.
CGA’s Next Practices effort is taking a hard look at a pilot program in Minnesota, where GIS data is stored by the 811 center and stakeholders (contractors, locators) are allowed access to that information for only a limited amount of time (life of the 811 ticket). Who is provided access to what GIS data and for how long is completely controlled by the facility operator.
Participation in DPI is completely voluntary, but participants will have to demonstrate accreditation and transparency. Importantly, DPI is not punitive, and success will depend on the data provided and participation by a balanced number of key stakeholders. Initial metrics being evaluated include mapping quality, time taken to update maps and damages per certain number of manhours (for both contractors and locators). Peer reviews, while still under development, will be a critical part of measuring performance.
Leadership, innovation in damage prevention
Workshop participants heard from the city of Chicago, which operates a separate 811 system from the state of Illinois with unique characteristics that have resulted in superior operation and successful damage prevention. This presentation explored how GIS and global positioning system tools factor into the city’s system management and how data tracking and monitoring efforts drive both management and damage prevention performance of the 811 system.
Chicago has an enormous public right-of-way (ROW), and there is significant construction going on right now. Information was presented on locate requests, hit ratios and data transmissions, and issues related to workflow, project coordination and excavation review. Interaction with project owners and other stakeholders is critical because city permits are not given a green light in a public ROW without a plan approved by the city.
Approved excavators have access to all needed data. This seems rudimentary, but lack of accurate mapping and facility location information is an enduring problem for the excavation community. Chicago oversees an evaluation panel that reviews damage investigations, where success is based on technologies, resources, stakeholder participation and the damage prevention statute.
Worker retention
Retention of talent is an issue facing the entire industry. A panel discussion was provided about building a high-performance, “people first,” collaborative culture among LDCs and contractors.
A key factor is a focus on corporate culture, and frontline leaders are usually the ones driving this. Every company has a workplace culture, whether intentional or not. Workplace culture includes community, leadership and personal elements. Values, communication and accountability (or lack thereof) contribute to those elements. The point was made that diversity is a good thing, but not at the expense of values.
The best frontline leaders “are able to take people where they want to go but wouldn’t without you.” Instilling an effective workplace culture can carry positive impacts on company budgets, diversity and staying up to date with multiple areas of a given industry. The panel encouraged the audience to define a culture to create healthy habits, implement the vision of the culture through pilot programs, and identify and benchmark actions of those responsible for driving the culture.
Market crystal ball
The final session of the workshop was provided by Continuum Capital, which believes the industry stands on the precipice of the largest wave of underground utility construction activity in all markets over the next three-to-seven years. The potential for the integration of hydrogen, carbon capture/use/storage, and renewable natural gas pipeline activity is opening up a new era.
Opportunity is created out of disruption, not stability, and the anticipated growth and new market development will be uneven and bumpy, rather than smooth. This disruption originates from the pandemic aftermath with a concept of VUCA – Volatility, Uncertainty, Complexity and Ambiguity.
VUCA qualities make a situation or condition difficult to analyze, respond to, or plan for. Understanding how to mitigate them can greatly improve strategic abilities of a leader and can lead to better outcomes.
VUCA can also provide a checklist of the key factors an organization should consider when making decisions. It provides clarity about relevant issues and helps to focus on the “knowns and unknowns” in the context of business challenges (both internally and externally).
COVID-19 and the subsequent lockdown, supply chain challenges (rising costs of fuel and materials), geopolitical conflicts, political instability, cascading inflation, potential recession, etc. have defined this VUCA period.
Some of the considerations encouraged during this presentation include:
- Immigration is an issue that has been a contributing factor of all construction booms in the past and will continue to be.
- Non-construction spending in gas distribution is rising faster than capital expenditures.
- Contractors are currently being squeezed by expenses that are not included in unit pricing.
- New construction is likely to flatten over the next 5–10 years.
- Distribution replacement programs will grow and then flatten over 10-20 years, as replacement of cast iron and bare steel lines continues.
- As the influence of hydrogen grows, contractors will have to be prepared to work where the hydrogen hubs exist and where future hubs are established.
- Renewable natural gas and the potential offered by landfills, agricultural sources and wastewater treatment plants will create new opportunities.
Importantly, none of this will be accomplished without pipelines, and extensive construction will be needed.
WYMAN ASSOCIATES offers strategic consulting with its clients and direct advocacy before the United States Congress and executive branch agencies. Working with several allies in Washington and around the country, provides clients a constant voice in the national debate.
One of the panels discussing critical issues for the gas distribution industry. Pictured, left to right, are: Kevin Parker, Mears Group – panel moderator; Stu Buhrendorf, Hallen Construction; Steve Allen, Energy Worldnet; Kevin Miller, Miller Pipeline; John Bentley, Infrasource; and Nate Healy, Michels
Christina Sames, senior vice president for safety, operations and security at AGA.
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