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CWJJ Episode 46: Stuart Saulters

coffee with jim and james

Thursday, Feb 25- Take a peek into the government affairs side of the Oil & Gas industry with Stuart Saulters from APGA.

Quick Links:

Stuart Saulters LinkedIn

Episode Transcript:

 [0:00] [music]

Jim Schauer:  [0:24] Good morning, everyone to this week’s chilly edition of “Coffee with Jim & James.” James before we get started this week and last week had been unprecedented and it reminds me of a time. Let me tell you a quick story.

[0:39] I traveled the world to and from all over and I remember going through the Rocky Mountains one time on my way to the Grand Teton. OK, I was at about 13,000 feet. I had my pack mule that was going along blizzard. I could barely see.

[0:56] All of a sudden this image appeared to me and it was cold. Just like last week in Texas. I mean cold and I’m like is that Sasquatch and I’m trudging forward and all of a sudden I see an entity riding that yak and I get closer and I said, hello there and this person opens up the pelts and who is it but Stuart.

[1:17] I said Stuart. What are you doing up here? It’s like I just got done with a government meeting. I have to meet immunity and this is the best way to get there in the APGA will do anything to see our members. I may have embellished that whole. Story a little bit, but you know what? It was a little entertaining wasn’t it?

James Cross:  [1:34] I can’t believe we are guest put up put up with it Stuart Stuart was a total setup to because we did the pre‑show and Jim had a plan but he had an idea and said I’m just going to run with it and we trusted him and that’s what he came up with.

Stuart Saulters:  [1:52] He was pretty accurate. We do have a few members in Colorado and some of that, you know hinterlands.

James:  [1:59] Jim you were speaking my language. I thought it was going to be me on the yak. Because this past week here in Texas has been something special and by the time this airs I can imagine how many more folks will be impacted by it.

[2:18] I know we put something out this week, but man we see you, Texas because we are you you know, we’re our headquarters is here. We have a lot of clients and young folks in the industry that called Texas home and Oklahoma and everybody impacted here in the South. So it’s been a very humbling week.

[2:37] You have to boil snow to flush your toilet. It makes you appreciate some of that infrastructure. And so, you know, what a fitting time to have Stuart join us today from the APGA. Stuart, good morning. I always let the guests do their own intros because that’s the most awkward thing we can do for a guest.

Stuart:  [3:01] Thank you. I’ll see how awkward awkward I can be and I’ll say this so my background actually started in the engineering world. I worked for a Chevron. It’s a little company in California.

James:  [3:14] Heard of them.

Stuart:  [3:15] [laughs] Yeah, so I worked at a refinery in south Mississippi as an engineer facility engineer and then have the opportunity to do some upstream work. So so my kind of production story related to cold weather is the assets that I was working on for Chevron. We’re in Western Pennsylvania, and they had actually bought these from an independent producer up there.

[3:42] No offense to my good friends at Chevron that I still have but somehow they were convinced the due diligence team was convinced that whales didn’t freeze and Western PA like you folks are experiencing down there in Texas and I’ll admit it probably doesn’t happen in West Texas until this week.

[3:58] It does happen in Western PA. I know the challenges that those producers are going through definitely heart goes out to them and heck man. You can’t even get on the road to get out there and get the gas flowing. So so yeah, so first‑hand experience with well freeze‑ins and frozen dump lines and all that fun stuff on production sites.

James:  [4:19] Man, Stuart your I’m from West, Texas and I can tell you my entire life growing up there. I never seen anything like you know what we’re seeing that over this past week and you know, we’re just simply not built for it.

[4:32] I’ve had some friends from up North that laugh and say, [laughs] you know, it’s minus whatever look we’re built to be cool down here. We’re hot, you know, so we don’t we don’t have a lot of those niceties and manage showed this week.

[4:47] The good thing about Texas were you get to work we talked about that a little bit in the pre‑show is that’s one thing we do well and and I know the South does really well, so we’re excited to get started.

[4:58] Stuart, the VP Government Relations at APGA, tell us about that a little bit and a little bit about APGA maybe for those that maybe don’t even know they’re a member, right?

Stuart:  [5:08] Yeah. No, that’s good. Yeah, and so yeah, so from Chevron at took a right turn or maybe a wrong turn into government affairs and and that’s where I am now for APGA. So the American Public Gas Association we’ve represent we like to represent all public utilities, but not all public gas utilities are our members. We have about 700 members in 38 States.

[5:31] There’s about a thousand total across the US. But yeah, our job is to represent them in the halls of Congress or within conversations with the regulators both PHMSA, Pipeline and Hazardous Materials Safety Administration, who you folks and your listeners probably know a little bit more than maybe some of the folks at DOE the folks at EPA, you know, the alphabet soup of regulatory agencies.

[5:55] So so yeah, so I’m supposed to be in charge of that. We’ll see. That goes sometimes some days are better than others. But but no doubt. I mean this week has definitely been a challenge for a lot of our members just recognizing that you know, we like to take pride and that we feel like natural gas has flowed to the homes.

[6:14] This just been just the crazy supply chain and just the way things are connected just as made it hard on everybody that is a part of this natural gas process. So this has been a crazy week for me and I’m not quite as bad as you down there James, but I do have some white stuff. On the ground. It is snowing here in DC where I’m located.

James:  [6:32] Awesome.

Jim:  [6:35] I do have a little bit of sand flurries outside.

Stuart:  [6:40] [laughs]

Jim:  [6:41] Well, wait a minute hurricane season. I will be shriveled up in the corner in the fetal position screaming. Let’s stay on track with the government relations Stuart, the topic of Section 5 has come up seen it in the in the news and such like that.

[6:57] I think that pertains a lot to what James and I call the MUNIs the public gas systems. Can you elaborate a little bit on Section 5 for us please?

Stuart:  [7:09] Keep me from getting too wonky here. This is my world and I recognize a lot of your listeners don’t don’t understand all these, you know acronyms and terms you guys are used to.

James:  [7:19] We are big fans of passionate tangents.

Stuart:  [7:22] [laughs]

James:  [7:24] You have the floor, sir.

Stuart:  [7:26] I’ll start I’ll start here and say that. I’m not trying to pit us against the investor owned utilities or maybe some of the bigger utilities the names you’re more familiar with Xcel Energy CenterPoint, you know ONE Gas, but we are unique in that our utilities members are community‑owned.

[7:45] They are not for profits. So every dollar they make goes back to the community in some way and obviously that’s usually that’s almost 99% through the utility. There’s typically a kind of a wall between how other areas of the city spend money in the utility.

[8:03] Anyway, Section 5 is a very important issue for us because it does really impact that cost structure. So when you look at the two big laws governing electric kind of electric transmission electric distribution and natural gas transmission and distribution, they’re pretty much the exact same except for one provision, and that’s what’s in Section 5.

[8:30] Basically our members the natural gas distribution utilities can’t go to the regulator which is in this case the Federal Energy Regulatory Commission, or FERC, and ask for refunds if they felt like they were overcharged.

[8:46] Things happen price of gas fluctuates things like that. And so they want to have the ability to go to FERC and say hey, you know, we feel like the pipeline may have overcharged us in this situation at least hear us out. At least let’s have a discussion about is there an opportunity to collect some of that overcharge for one reason or another?

James:  [9:08] You’re saying that there is it’s like overcharge protection and you’re saying electric is had this and you’re just looking for parity when it comes to that.

Stuart:  [9:18] Yep. That’s correct. And again just harping back on that not‑for‑profit that customer‑owned aspect of our member is we’re not trying to pad anybody’s pockets. Like this is purely going back to the customer through, you know, capital projects replacing pipe whatever the utility thinks is good for that system.

James:  [9:38] Awesome. So so that leads great into really another portion and I’m glad you kind of bring that up because I know you know, a lot of your members are looking for ways to get people back to work too at the end of the day.

[9:58] Do you ever take off your government relations hat? Is that your permanent hat? Well just say, you know where that hat now and let’s talk about American Infrastructure Bonds and can you explain that really to our audience in our industry? And you know, how is that going to affect our industry in the people involved in it?

Stuart:  [10:18] Yeah. So our we’re unique in that we have access to our members have access to public financing and so, you know with that comes different bonds different investment types and so American Infrastructure Bonds are what we feel is a very timely way to put people back to work.

[10:38] Right now, you know, and I was joking with you guys earlier then I’m going to forget and I forgot again, but we may get it right. So right now we are municipalities can currently issue tax‑exempt bonds. These American Infrastructure Bonds are taxable bonds.

[10:56] That’s all I can say about the differences. I’ll let you figure that out from your CPA are your investment folks but but basically it’s valuable because it’s another tool to used for capital projects. So if you want to put in new pipelines new assets, here’s another way you can get financing for that.

[11:15] And so to your point about putting people back to work, you know that this is it right here is another opportunity for folks to get money for big projects and it’s you know, like obviously we’re pushing it from the pipeline aspect, but these bonds can be used for broadband they can be used for water infrastructure.

[11:32] We’ve got a lot of friends helping us out push this through Congress because it you know, it can be huge for public utilities all aspects of it.

James:  [11:43] We’re all for putting people back to work, aren’t we Jimmy?

Jim:  [11:46] Amen brother. I tell you what and that’s that’s a great opportunity of people understand and learn a little bit about that and google it and do some research and like you said talk to the accounting folks as to which way we should go.

[11:58] What a better way to To one make our infrastructure better more reliable continue on the safety aspect and get people back to work. That to me is a not even a trifecta. It’s a quadfecta.

James:  [12:11] We know a guy that if you have questions about it that we can point you to he’s right here.

Jim:  [12:18] Yeah. Absolutely. Absolutely Stuart. Let me let me get back to what James is talking about a little bit earlier before we’ve all been talking about especially on the pre‑show we’ve had some unbelievable weather phenomenons lately and a lot of chatter in the news about. Oh, we should be doing this or we should be doing that.

[12:38] The topic of energy choice has definitely come up and what’s some of the thoughts that you have about that as far as energy choice and what that means to the APGA?

Stuart:  [12:49] Yep. Yeah, and I mean, you will never find an APGA member that says we don’t need all of the above. I mean, obviously they deliver gas that’s their mission as their goal their passionate about that, but they recognize it’s you know, it’s a big world right?

[13:04] As far as I can tell this TV behind me. It doesn’t run off natural gas at least not directly, right? Not yet. Maybe one day but but yeah, not directly. Right and so our guys focus on that direct use, you know, the gas to your furnace the gas to your range the gas your water heater.

[13:23] When we think about energy choice. We want that option to be available for everybody, right? We don’t want people to have to buy heat pumps because they can only get electricity. And so that’s that’s our hope is that direct use of natural gas remains an option for folks around the country.

[13:41] It was unfortunate. It’s been gosh a couple of years ago. Now at this point that the city of Berkeley in California banned the use of natural gas and so is you know, we hated to see that got to be honest probably wasn’t as big as surprised. We hated to see it for those folks there in California.

[14:00] This energy choice language that we’ve been throwing around is really directly connected to kind of a state effort. We have going we’re working with a lot of different stakeholders recognize. This is you know, you guys talked we talked about jobs like the labor folks are all over this because they recognize the value for them and for their labor their union employees, especially to have the ability to you know, still be pipe fitters and still be that type of jobs.

[14:27] Anyway, there’s a group of states. That’s we’re trying to help legislators understand. You know, how important energy choice is then once they understand get them to pass legislation the basic at the state level prohibits a municipality or a little city from make from banning natural gas or banning propane even.

[14:50] That’s really kind of the gist of energy choice by all means we’re watching what’s happening at the federal level. So what’s happening at the US Senate, House of Representatives. When it comes to energy choice.

[15:01] We don’t want any policies that similarly do that at the federal level. It means a little harder to prohibited a utility but still I mean there could be laws kind of put out there that make it harder to get natural gas your home or harder to use natural gas or home.

[15:18] That’s kind of the overarching broad view of it, you know, and I’d like to say that we, you know energy choices. Like I said just broad term but we want to make sure that folks that customers have that opportunity to use natural gas for for a host of reasons.

[15:38] You know, it’s efficient directly using it versus sending it to a power plant converted to electron and then get into your house. You know, it’s cheap. It’s affordable. It’s clean. Yeah, all that stuff. I’ll get off my soapbox and let you guys…

[15:52] [crosstalk]

Jim:  [15:54] soapbox and I really think the spirit of it. I mean when you say the word choice, I think this week of it would have been sunny and Texas and James had the choice of having some solar panels or if it had been windy to have a little wind turbine helping him out during this time.

[16:09] I’m in Florida and we get a little bit of sunshine down here. But you know, there’s also efficiencies there’s comfort there’s you know cooking with natural gas and such like that that you know, I may not want to mix but I don’t want to be prohibited from anything. I might want to be just like a 401k. OK, I would like a portfolio. That’s pretty widespread. So I like I like what I’m hearing with that.

James:  [16:36] I think the excited part too is Stuart for those of us that are not, you know fighting the good fight out there like you are that are right in the in the heart of it. It it gives me peace of mind to know that people are out there working on this stuff for our industry, right?

[16:56] We’ve been one of our goals this year with this show. Is also highlighting the need for people to get involved to understand that the things that are going on in our industry people have been working on this knew it was coming are continuing to work on it and we’ll continue to work on it.

[17:15] We have a seat at the table a lot of seats at the table, you know to really work on these these opportunities even and a lot of people just I don’t know. It’s a black box. Box behind a certain point right behind the curtain they don’t know how it functions.

[17:32] Saying and knowing that we have Stuart in DC working for us and and people like Erin and and we have committees and task force and other associations working on making sure we have a future and a seat at the table I think is refreshing. So thank you for that Stuart. Did you have one more thing?

Stuart:  [18:00] Yeah, actually if I can say two things sorry, I got you guys are triggering all these things. I’ll keep it to two. [laughs]

Jim:  [18:05] Do it.

Stuart:  [18:07] So so one thing I always take advantage always try to take the opportunity to do is talk about the clean aspect of natural gas and just how we get kind of written off as though you’re a fossil fuel your got to be dirty, right?

[18:20] There’s huge environmental benefits of using natural gas and its and it and actually you know, while I remember is don’t do the big transmission deliver natural gas to power. I mean, that’s the best. That’s the best example, right you look at the natural gas generation and how that has been huge from environmental standpoint just decreasing emissions.

[18:39] One of the things I like to talk about with our members and our aspect of the supply chain is that we operate infrastructure like our expertise is not anything related to the molecule. Its the pipeline is the valves is the meters.

[18:56] For these folks kind of pushing natural gas out of equation you’re taking away that expertise and so how many ever years from now. I don’t know for sure. I mean, it’s somebody smarter than he’s going to figure this out. But that those pipelines may not deliver, you know, methane CH4.

[19:14] They’re going to deliver renewable natural gas, right biogas gas from a landfill or gas from an agriculture production. That would have been emitted into the air and causes, you know, global warming or climate change or whatever.

[19:27] That’s the aspect that I really like the harp own is like, you know, you guys like natural gas now but the future hydrogen, you know renewable natural gas. And so, you know, I think that’s the element that’s so important for folks to realize.

[19:41] The other thing I was going to mention too is, you know, don’t put me on a pedestal like sure I know the wonky details behind GR, which is government relations, but but that’s because you know for some reason or other I thought it was cool. [laughs] Now that I’m now that I’m living it I don’t agree so much.

[19:57] [laughter]

Stuart:  [19:59] But anyway, but you you know, the your listeners, you know, by all means that guy turning the wrench out in West Texas. That’s listen to us right now. Like you got you can call your Congressman just as easy as I can.

[20:11] I’ll be honest like he wants to hear from you a lot more than I do. So, you know, I’ll tell some resources here in a minute. But if you see a bill or you hear one of these American Infrastructure Bonds, and it’s your Senator that’s sponsoring it now.

[20:25] There’s nothing to stop you from calling him and his office and saying And you know, hey, I heard some wackadoo talk about this bond issue if it’s going to put people back to work. You better be voting for it, you know. That’s my two cents for that right there.

James:  [20:40] Stuart just called himself a wackadoo. I think it’s so I feel like we bonded instantly.

[20:47] [crosstalk]

Stuart:  [20:47] wackadoo.

James:  [20:54] That’s the teaser right there.

Stuart:  [20:56] [laughs]

James:  [20:57] Stuart, we ask one question to wrap the show every time and I don’t know maybe we’ll change it one day but today is not that day. So if you watched one before you probably already know what’s coming, but Stuart do you love what you do?

Stuart:  [21:13] I do. Yes very much.

James:  [21:16] Why?

[21:17] [laughter]

James:  [21:19] You can’t get away with that. It’s fine.

Stuart:  [21:23] I’m an engineering guy. It’s black and white. No, long story short or maybe long story long. I had the opportunity to run for kind of student body president or whatever when I was in college, it wasn’t president. It was another kind of student government position and actually lost that run campaign.

[21:48] It gave me the opportunity because I lost to take a semester off and go to DC and intern for a senator. I’m from Mississippi. So Senator Cochran, he’s no longer with us but you know, I had the opportunity to interview or work with him as an intern.

[22:04] It just like just flipped my world on its head to know like, you know here I am and I can make an impact, right? You know, I can be involved in public policy be involved in government relations.

[22:18] My dad would have killed me because I was eight hours from graduating with a civil engineering degree. So if I was to like change my major and be Poli‑Sci or whatever go to law school in my like heck no like you’re getting an engineering degree.

[22:31] That was the best thing too because I was it man. I was out in the field. I was at the refinery for four years. I was out in the you know oil fields of West PA for four years or yeah for years and so, you know, I had had the experience.

[22:46] I loved taking that experience in to where I am now and really recognizing like I go to the Hill or I go talk to PHMSA or, you know some DOE I’m like look guys like this is bad. You know, this is bad. Policy and this is what it’s going to do. I saw it.

[23:05] Like I said long story long, I love what I do and it’s because I can kind of really see that impact and you know kind of see the change, I guess sometimes sooner rather than later. I mean if folks watch, you know, your news channel of choice, you probably realize Congress doesn’t do a lot but but there is some some instances where they actually do stuff and that’s that’s cool to see.

Jim:  [23:30] It’s interesting because I in my mind by you talking that way, I think for a lot of the viewers and MUNIs will call them and such like that might have the idea now that you know, the politicians aren’t just over there. They’re actually part of us in APGA is a conduit for us. Maybe we could even go directly.

[23:51] You’ve given some strong words to say. Hey call that person, you know, I don’t know how you feel and a lot of people might think oh, I can’t call a congressman or a senator you can. That’s really important to take away.

[24:05] We’re all people right and we all really you know, when you think about it, we want the best for everybody, you know, we as an industry and as a country and as a world too. Yeah good words of advice. I really like that.

[24:18] Stuart let’s bring before we wrap it up if somebody wants to learn a little bit more about the APGA and they might be computer savvy like I’m trying to be how would do that. What would what would be my what would be my path to finding that?

Stuart:  [24:34] Yeah now so it’s we try to make it easy. So apga.org, org, is our website and I’m more partial to the Advocacy tab because that’s where my world is. So that’s where you can find all the information if you do want a little bit more about Section 5, you do want a little bit more about the infrastructure bonds.

[24:56] Energy choice is a term. We also use the term direct use of natural gas, so kind of like I said, we’re not we’re not at really in the business of getting gas to a power generation. We’re getting gas your home or business. And so we call that direct use and so find out all kinds of fun facts about, you know, the importance of the direct use of natural gas in energy choice on apga.org.

Jim:  [25:17] I like it that’s good on behalf of James and I we thank you. It was absolutely great and I will share that with the week going Stuart was more than accommodating we had to do a couple reschedules.

James:  [25:33] I don’t think anybody wanted to see me in the state. I was yesterday or Wednesday, that’s for sure. [laughs]

[25:40] [crosstalk]

Jim:  [25:42] tucked into boots.

James:  [25:43] Tucked into boots, you know three days waiting. Yeah, I so accommodating. We appreciate that Stuart.

Jim:  [25:51] I’m going to say that this is probably the best APGA episode we have had with the exception of Erin.

[25:59] [laughter]

James:  [25:59] Erin killed it. Tell Erin we said hello and all our friends at APGA. We’ve had, like I said, long membership, there are lots of involvement a lot of overlap that we’ve had initiatives that worked together on and I’m sure we’ll continue to.

Stuart:  [26:19] Absolutely.

Jim:  [26:20] Again, folks. Thanks for joining us for this special edition of Coffee with Jim & James, please reach out to the APGA reach out to Stuart. You can also find him on LinkedIn as well make your voice known ask questions learn. That’s a big thing. The most important thing, always stay safe.

[26:38] Until the next episode of Coffee with Jim & James. We will see you next time. Take care.

James:  [26:52] Bye‑bye, everybody.

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