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R&D Funding for Natural Gas Transmission & Distribution Sector
Washington, D.C. – A study recently released by the American Gas Foundation shows that funding for research and development of the natural gas transmission and distribution sectors (T&D) has dropped nearly 50 percent from three years ago. The report, titled “Research and Development in Natural Gas Transmission and Distribution,” which was co-sponsored by the INGAA Foundation, Inc., shows that R&D funding for the T&D sectors has declined about $25 million and is roughly half of what it was in 2003. Since then, two significant programs have ceased to exist: a cross-industry R&D program managed by the Gas Research Institute and funded through a surcharge approved by the Federal Energy Regulatory Commission (FERC) and a program funded by the Department of Energy’s National Energy Technology Lab which was focused on pipeline reliability R&D. “A troubling outcome of the recent funding cuts is the virtual elimination of long-term basic research,” said Robert W. Best, chairman of the American Gas Foundation. Best is also chairman, president and CEO of Atmos Energy Corporation, which is headquartered in Dallas, TX.
The study tracks the historical trends and current status of R&D in the T&D industry, examines how research funding aligns with current industry objectives, compares it to similar industries, and reviews current R&D structures and strategies. Best noted, “With few exceptions, the gas industry’s R&D funds are focused on near-term developments, while in contrast, the electric and water industries each maintain basic research programs oriented at longer-term industry goals through their primary industry R&D collaboratives and their government funding agencies,” Best said. And while R&D spending in U.S. industry as a whole has been increasing, R&D spending in the energy industry, which includes gas transmission and distribution, has been declining since the 1990s. This is due primarily to a drop in federal funding and the discontinuation of an R&D surcharge approved by FERC.
“Today, gas distribution R&D programs are conducted in a more decentralized environment that creates a greater demand for the industry to coordinate R&D activities and it creates a greater need for communications,” Gary Gardner, executive director of the American Gas Foundation said. “Since the industry continues to face such challenges as aging infrastructure, growing demand, and the constant need to maintain a high level of reliability and safety, a closer look may need to be taken to make sure this downward trend in R&D investment does not point to future problems in bringing products and services to market that address the challenges and satisfy customer expectations.”
The executive summary and full text of can be downloaded from www.gasfoundation.org. For a hard copy, call Kelly Batte at 202-824-7026.
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The American Gas Association, founded in 1918, represents 202 local energy companies that deliver clean natural gas throughout the United States. There are more than 70 million residential, commercial and industrial natural gas customers in the U.S., of which almost 93 percent — more than 65 million customers — receive their gas from AGA members. Today, natural gas meets almost one-fourth of the United States' energy needs. For more information, please visit www.aga.org.
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