No Real Problems Seen in Gas Industry's Y2K Transition
One of the "biggest issues" facing the natural gas industry in
the upcoming year with respect to Y2K will be the readiness of "key
providers and dependent players," namely the electricity and
telecommunications industries, said pipeline and LDC officials last
The majority of gas companies, including pipelines, LDCs and
producers, report they expect to be Y2K ready by June 1999, and
electric utilities are said to be following a similarly aggressive
path. "I think that for electric and gas we're on very similar
tracks as far as being ready. The electric side is going to be
doing some full industry-type testing in April that the gas
components hope to get involved with," noted Gary Gardner, chief
information officer for the American Gas Association (AGA).
As for telecommunications companies, "I think the big players
are probably going to be there. And the concern is [over] those
local carriers out there because there's thousands of them. We
haven't seen any warning signals or big problems so far," he told
NGI following a press briefing in Washington D.C. on the challenges
that the oil and gas industries face with computer and electronic
software and hardware when the clock strikes Jan. 1, 2000.
"We're pretty much all in the same stage of readiness, which is
where we want to be - about half way at this point" through testing
and correcting the problems, said Skip Horvath, executive vice
president for the Interstate Natural Gas Association of America
(INGAA), a major pipeline group. "The reason for all of us to be
together is if any one sector or any one industry is behind, then
all the others are behind because they rely on that one. So we're
all pretty much making sure we go lockstep together..."
In 1999, "we're going to be contacting and working with the
electric and telecommunications industries to make sure our...plans
make sense with where they are in their plans," Horvath said.
Toward that aim, the Natural Gas Council is scheduled to host a
meeting in Houston on Jan. 27 for gas, electricity and
telecommunications to provide updates on their Y2K preparedness.
The entire gas industry presently is surveying companies about
their Y2K readiness. The results of an LDC survey will be presented
at a FERC technical conference scheduled for Feb. 18th, AGA's
Gardner said. "So far, from the initial responses that we've gotten
progress is still being shown. The majority of people are moving
into what we call the later stages of remediation and validation,"
and they see "no major challenges" ahead. "That's a good sign," he
The news also is encouraging from the quarterly statements on
Y2K readiness that publicly traded investor-owned utilities (IOUs)
have filed with the Securities and Exchange Commission. Both
Merrill Lynch and Moody's Investor Service have reviewed these
statements and "feel pretty confident that based on what they've
seen that the energy industry, and specifically the LDCs, should
not be at risk," Gardner noted.
"I think the general feeling we're getting is there could be
some little nuisances here and there" come Jan. 1, 2000. "But from
those working close to the issue, we don't see a big problem" on
the horizon, he said. Gardner noted that Montgomery County in
Maryland conducted a "dry run" of emergency-response capabilities
last week by "pushing the clock forward" on its systems, and
"apparently everything ran smoothly."
Pipelines and LDCs have similar Y2K "vulnerable" areas. The
first is the SCADA (Supervisory Control and Data Acquisition)
system, which "basically is our communications system," said
INGAA's Horvath. "It's a bunch of pieces of equipment scattered
around - some at the control area and some at the customer sites."
The other area of vulnerability is the control panel of compressor
stations, he added.
The vulnerability stems from the fact that some systems or
electronic devices contain embedded chips or processors that may be
date-sensitive, Gardner said. The chip "may have some kind of clock
to it," which could cause it to reach the "wrong assumption" that
it's 1900 rather than 2000 when Jan. 1 dawns. So far, LDCs are
finding that chips used in their operations basically "don't have
that date type of sensitivity."
The Y2K issue has gone from being "a software traditional
information systems type of problem" to more of a hardware concern,
where "anything that has a chip in it may have a vulnerability,"
Gardner noted. He conceded it's been a "laborious process" to
locate these chips and test them. But "right now I think the
consensus is that they're feeling pretty good across the board at
what they're finding. They're not finding that much of a problem."
He said the chips in some cases can be replaced, but he cautioned
that companies that wait too long could be "shut out."