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Both Upgraded and New Pipelines Needed, PG&E CEO Says

The U.S. shale gas boom has put pressure on the natural gas industry nationally to upgrade and build new pipeline capacity to service what are anticipated to be growing markets for gas-fired electric generation and use of gas as a transportation fuel, the CEO at Pacific Gas and Electric Co. (PG&E) Tony Earley said Monday in advance of the PG&E annual shareholders meeting in San Francisco.

As part of a press conference, Earley was asked about the national pipeline capacity situation in addition to his combination utility's ongoing efforts to resolve operating, legal and regulatory issues lingering in the wake of the September 2010 PG&E transmission pipeline rupture and explosion that killed eight people in the suburb of San Bruno south of San Francisco.

"Nationally we are seeing a great increase in gas reserves related to shale gas finds across the country," Earley said. "And one of the challenges is building the pipeline infrastructure to hook up those new resources with the markets that can use those resources."

He said the good news for the United States is that it suddenly has a "great energy resource," but at the same time the industry has to be focused on building more pipelines.

"We need to rebuild our existing pipeline infrastructure," Earley said. "PG&E is not alone in having to go back and look at investing more in its pipeline infrastructure. Virtually every large pipeline-related company whether a utility or pipeline-only, is having to do this." He cited the example of NiSource Transmission and Storage announcing plans for a $4 billion, multi-year modernization program to upgrade its entire Columbia transmission pipeline system.

"This is just the tip of the iceberg, we're going to see lots more of this," Earley said. "I think the dual challenge of new pipelines and enhancing existing pipeline systems will be on the agenda for the next decade or more."

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