Welcome to the PIPELINERS podcast, episode 227, sponsored by the American Petroleum Institute, driving safety, environmental protection, and sustainability across natural gas and oil industry through world-class standards and safety programs. Since its formation as a standard-setting organization in 1919, API has developed more than 700 standards to enhance industry operations worldwide. Find out more about API at api.org. The PIPELINERS podcast, where professionals, rubba keeps, and industry insiders share their knowledge and experience about technology, projects, and pipeline operations.
And now your host, Russell Treet. Thanks for listening to the PIPELINERS podcast. I appreciate you taking the time and to show that appreciation, we give away a customized Yeti Tumblr to one listener every episode. This week, our winner is Robert Jepel with Southeast Gas.
Congratulations, Robert. Your Yeti is on its way. To learn how you can win this signature prize, stick around until the end of the episode. This week, Stuart Salters, who hadn't been with us in a while, is coming back, and he's joining us to talk about the Billion Dollar FIMSA Grant Program for Utility Infrastructure Upgrade.
Hey, Stuart, welcome back to the PIPELINERS podcast. It's good to be back. It has been a while. It was 2019 the last time you were on the podcast.
So that's been good. It's almost three years now. Yeah, and a pandemic in between. So that makes it feel a little longer, even.
Yeah, it was, you know, if you think back, what was the reality we were living in in October of 2019? It's a very different reality than we find ourselves in now. Yeah. So what have you been up to since October of 2019?
Well, I have continued my role at the American Public Gas Association. Actually, when I last spoke to you, I was focused on appliance efficiency rule-making and helping the public gas utilities that are our members engage with the Department of Energy and the Federal Energy Regulatory Commission. And I've actually gotten a new role here. So I'm the Vice President of Government Relations and kind of help our government relations team, both the regulatory and the legislative side kind of sift through all the policies and challenges these days that we have to deal with.
Well, that's certainly, that will certainly keep you busy given what the current circumstances in our industry are just with all the changes and the rising fuel prices and the impact that's having on policy. It's very dynamic. We'll just say that. Yes.
No. I wish they talk about, here's you more. Well, that got my wish. Yeah.
You wish they talk about energy more but for different reasons, right? Right. Yeah. Right.
Yeah. That's so true. So true, man. You know, we get real well known and highly thought about when the prices get high.
Yep. No, absolutely. And people don't believe it, but we don't really want the prices this high. No.
Will you prefer the stable market kind of? Yes. Yes. Yes.
Yes. Yes. Yes. Yes.
Yes. Yes. Exactly. Well, listen, I asked you to come home to talk about the $1 billion, we'll say this in the Austin Powers way, right?
Maybe a good way to start is just tell us what is this program and where is it coming from and what's its purpose, all that stuff. Yeah. So as much as negative as maybe focusing in the news and hear from politicians about fossil fuels and natural gas in particular, we had some positive news from the policymakers last fall. We were fortunate and specifically public gas utilities.
So those utilities, their own vioceities and communities and co-ops, even there are a few of those around the country. We were given a grant program in legislation that was enacted and signed by the president last November. So the technical term for the bill was the Infrastructure Investment and Jobs Act or the BJA, some people call it the bipartisan infrastructure law or BIL. So those are all the terms that it's called.
But yeah, we were fortunate to get a billion dollars, so $200 million for the next five fiscal years and specifically the money is to be used for repair, rehabilitation or replacement of what they call or what's leak prone pipe is kind of the technical term cast iron pipe, bear steel, some early vintage plastics. And that seems to be the main focus, but there is also a provision in the legislation for buying equipment. And so I think your listeners probably well aware that PHMSA, the pipeline regulator is this PHMSA in particular is focused on leak detection and leak mitigation. And so that seems to be kind of the heart at what this money, this grant program is trying to get at is helping public utilities decrease their leaks.
Yeah, that's no small thing, particularly for the older, smaller public utilities being able to have the capital for doing this kind of infrastructure lift is a really, really big deal. So what are the kinds of things that you're saying it can be used for leak mitigation? I would assume that'd be things like cast iron pipe replacement, investments in technologies, for leak location, just all of those kinds of things. Yep, no, absolutely.
We've had several conversations with PHMSA since the grant got enacted. And I think they really want to work with APGA's members, the public utilities to make this program a success. But in those conversations, we do get the sense that there is kind of a focus on pipe replacement. So like you mentioned, Russell, cast iron pipe getting that out of the ground, replacing it with PE pipe, composite pipes, something that's definitely more resilient, both from a damage prevention as well as just keeping stuff in the pipe normally perspective.
But it is interesting, though, and we want to remind them that there is that other caveat in the legislation that you can do stuff other than just replace pipe. And so no grant's been awarded, so the applications still have to go in. But one example that I kind of raised with our members is a lot of our members have small systems. And so when you think about leak, doing your leak, whatever, leak check, I can't think of the technical term, sorry about that, but walking your system, feeling it, doing your leaks, you can do that in a year.
And you can do that in the amount of time that PHMSA awards. And so some of this kind of new WISBANG technology that's out there, you may not think is worth investing in. And so with this grant program, perhaps that's the opportunity where you kind of take that plunge and look at a system that maybe you can put on top of a car or use a drone or whatever to detect leaks as opposed to having your guys walk in it. Does that make sense?
Right. Absolutely. Absolutely. Because I would, I'm trying to put myself in the mindset of a small public utility.
And what I know about it, which is not a lot, to be honest, is they don't have a lot of resources and they don't have a lot of budget. So they're rates, they make enough money on their rates to kind of maintain their systems, but they don't really make the money they need to do major lifts or major evaluations of their systems. And a lot of times they don't have the expertise. They'll have, I know it's not uncommon in some cities with these very small gas utilities.
There's one guy who's the gas engineer and he does it all. So they can use the help for sure. So kind of knowing that this is even out there, I mean, if I were one of those guys, I'd be like, how do I get to money, man? And what can I spend it on?
And I probably want to do a, I want to figure out how I can get a survey done. And then based on that survey, target the things I would like to come back with a grant or to get actually replaced and improved. Yep. No, absolutely.
And I'm hoping that folks listen to this podcast that may not be aware will come, you know, knock on my door or knock on APGA's door to learn more because we do want to get the word out about this opportunity because it is great. I mean, it's an awesome opportunity to really invest in your system because you're spot on, I mean, heck, the way these municipal are designed is to be not for profit. So they're not supposed to make money. They don't have, I'm not trying to throw anybody under the bus, but they don't have shareholders.
And so that part of their business is not, is not there. And they, if they make money, it goes back to the system because they have to operate as not for profits. And I think one of the things that you pointed out and I want to make sure to raise is, is you're absolutely right. They don't have the resources, specifically the engineering resources to do some of these complex replacement projects or to think through that.
And so that's one of the things we want to make sure FIMS considers is, is as these guys are going through these projects, even doing the grant applications that may cost money. And so all of that stuff needs to be considered as, you know, reimbursable through the grant program or making sure you're not doing a lot of upfront work and then lo and behold, that doesn't give you the money. I mean, I think, I think $200 million, there's, there are, there are a thousand public utilities. So the money's going to get spent.
But I think, you know, the way it's structured, there's probably enough to go around. But yeah, just things we're considering and monitoring. Yeah, a billion dollars doesn't go as far as it used to. Right.
Very much so. If I'm, if I'm with a public utility, how would I, how would I, how would I go about applying for this grant? Yeah. Yeah.
That's the billion dollar question right now. So, so the, the rumor we've heard is that mid May, FIMS will issue their notice of funding opportunity or no foe. And that really kickstart the process of people applying. We've also heard that it's going to be a pretty quick application deadline.
So in the neighborhood of 45 days for folks to get in their application and they'll do that process through the normal channels, I think grants.gov is the website that you'll have to, you know, kind of put our application through. So, so with that kind of approaching time, with that approaching notice of funny opportunity date and then the quick turnaround, we're encouraging our members and folks listening for sure to do as much upfront where does you upfront work as you can. And so I encourage folks to look at their DIMP plan initially or make the first stop your DIMP plan. So is it up to snuff?
Can you look at your distribution tag and management plan and find that piece of pipe or find that segment of pipe that is going to be the most bang for your buck? Because that's what FIMS wants to see. They want to see risk reduced by them giving you this money. And, and so that could make you look at your DIMP plan and be like, man, I got to do that.
I can invest in my DIMP plan to get it up to speed or I've got to look to some consultant or vendor or whatever to help me kind of make sure I can paint that picture for FIMS of that. If they give me money, my system will reduce its risk. And again, so you also said, this is a five year program. So I would, I would expect that this whole application for grant would be an annual process.
So if I miss, if I missed this first day, well, there's another one rolling around in a year. Yep. Yep. So you, for the next fiscal year and then also to just to point out is, is operators have 10 years to spend the money.
So the most you can get as an operator is 125 million. You have 10 years to spend that amount of money. God, this gracious, that is, you know, I, you know, I, I just make this comment. I don't normally comment on politics because I, there's enough people doing that, I guess would be my comment there.
But this is one of those places where I think the government's doing something that's actually a service, right? It's actually a good, proper and reasonable expenditure of federal funds. Yep. Because what they're doing is they're augmenting communities ability to rehab and modernize infrastructure.
So it's, it's actually, it's one of those rare cases where the money being spent actually matches the name of the bill that justified the spending of the money. Yeah. We totally agree. We are excited and ready to spend the money.
I think one of the things that we like to point out too in all of our advocacy is, hey, you're not, you're not, you know, whatever it's worth, you're not necessarily prolonging fossil fuels. If that's the way, if that's the argument that people are raising, you're preserving a asset that's been invested in for years. You're allowing a workforce that's trained and knows that operate an asset that could transport, you know, newer fuels, lower carbon fuels in the future. I mean, it's folks are doing a ton of work to make sure natural gas is clean and if it's domestically produced as clean as possible, you know, no flaring and no leaks upstream and midstream.
Also, okay. I was just going to say that one of the biggest things that we can do in the United States to reduce methane emissions in the short term, like this year next year is rehab aging gas utility infrastructure. Yeah. Because we're not getting rid of natural gas going to homes in the next five or ten years.
You know, we may start to have other things going to homes. I have some hydrogen. We might be doing some other things. But as a overall infrastructure, we're not going to get that done in the next five years.
What we could do is make a massive change in methane emissions by rehabbing old gas-fired systems that are pretty full leaks. Yep. And that's exactly what this bill or what this grant program is aiming to do. And like I said, I mean, we were ecstatic that Congress agreed on this.
They don't agree on this, but they agree on this. And we're, yeah, right? It's been the money. Well, you know, the other thing too, and I don't know this, but I would expect that you'll actually see gas consumption go down and you might see rates come down in some of these public utilities because if I, you know, if I start getting rid of leaks, that savings goes back through the customer in a public utility because they're by statute, they can't make the money, they can't just make that money.
You do it with something else with it. Yeah. No, absolutely. And it's not just the tighter system, but more efficient appliances, people taking time to invest in insulation for their houses, houses being built better with thickest buds or whatever.
I mean, this is, yeah, to your point, the best way to decrease emissions is investing in the existing system and helping homeowners improve their houses to be more efficient. Right. I guess the, what might be helpful is to talk a little bit more in detail about how it does a dent plan might be used as a resource to help a operator or a public utility apply for the grant. So can you, can you break that down maybe in a bit more detail as to what you're, what you're recommended, what, what the APGA is recommending as an approach?
Yeah. So let me, Kavi, I first, but I have an engineering degree, but it's been a long time since I've done engineering. So I'm going to speak in anecdotes here and apologize, but we do get a pretty good feeling from them so that they won't quantitative numbers in their applications. So, you know, if you look through the legislation, there are some parameters that are, like, themes that will weigh whenever they consider awarding grants.
Like they're looking at, you know, kind of the motherhood and apple pie stuff, right? How many jobs you're going to create economic impact for your community? Are you helping rural low income rural and urban communities? But they also have a very significant focus on the amount of risk reduced.
And so we, most people have a DIMP, but it's, and again, apologize to them speaking of generalities. So Russell, you may, you may know more about this than me. So feel free to chime in, but, but most people have a DIMP, but it's system wide. So what you're going to have to think about is, okay, my system wide dump cannot carve it down into where it's, you know, Smith Street.
What's the pipe along Smith Street that is cast iron? And if I replace that, how is my risk going to be reduced? And then kind of step back a little bit and look at it holistically. Okay, if I replace Smith Street, you know, how's that look from a system wide standpoint?
So it's really kind of taking it segment by segment, your DIMP segment by segment versus, you know, versus holistic. And then also too, I think maybe a little outside of your DIMP plan. But one of the things I've encouraged people to talk about is because there is a focus on this administration and because like you said, it's appropriate to reduce leaks, can you quantify the amount of missions reduced by replacing a pipe? So obviously easier said than done, but is there some kind of like rough number?
You know, if you look at your, you know, you're lost in kind of for gas, like, I'm not saying that's possible, but just the thought, if you look at lost in unaccounted for gas, like, you say, you know, okay, if I replace this pipe, then my lost in unaccounted for drops down. And so just things like that that I think it's important for people to think about. Well, yeah, you know, so I'm, again, I'm a little out of my depth as well, right? We're talking about things we're not experts in, but you know, I think what I would do, if I were a small public utility, one of the first thing I would do is I'd look at my trunk lines, you know, I'd look at the larger dynamic or higher pressure lines that are feeding gas around the city, anything that I'm owning and operating.
And I probably focus there first. And then I do, and I'm thinking about what's an easy evaluation, right? Well, I think the next thing I would do is if I can get to lost in an accounted for on those systems, well, that's a pretty easy evaluation. And I could say, well, look, you know, I ought to be able to reduce my lost in an accounted for from X to Y that represents this reduction in emissions.
And here's my basis for that analysis. That's pretty easy to get to, right? I think the next thing I could do is I could do a leak survey, right? And say that, you know, well, we're finding X number of leaks and we want to mitigate rather than repairing those leaks, which will cost X, what we want to do is replace the line, which will cost Y.
And then we get all the leaks, including those leaks we couldn't sniff, right? Yeah. So that'd be a couple of ways to go after this. That's relatively short, you know, and then I think the next thing, I think the whole idea of doing a leak survey as a basis for replacement is pretty good approach, right?
And I would think most operators are going to know this is the area of my system where I have the most issues and I ought to be able to, you know, find the things I need to do to, you know, to justify, you know, an application and get some grant money. Yep. No, absolutely. The one thing I've also tried to encourage folks to look to do is to look at your GIS.I.S.
And so is your GIS up to snuff? Because, because like I said, there isn't, there is an element of trying to support low income communities, rural communities, urban communities. And so can you help get through your GIS? Can you kind of help paint that picture for FIMSA as well?
And so that may, it may mean a little bit upfront money, but at the same time, I think it pays off not only for this grant program, but just for overall safety. Yeah. No, I think that's a really good point. That's a really good point.
I guess the point that's really key here is that in your package to FIMSA, the more specific you can be about, I'm looking at this piece of pipe or this pipe network. And these are the problems I'm currently having that by replacing them, I'm going to resolve those problems. And here's the quantification of, you know, emission and risk improvement that I'm getting based on this project. Yep.
I would be surprised if most small operators didn't know that already. They're familiar enough with their systems. They're going to know that, right? The challenge is getting it into a piece of package of stuff that you can submit to FIMSA.
That's a challenge. Yeah. Do you know if there's anybody out there that's a consultant in this domain or that are going around and helping these small utilities put these packages together? Yeah.
So we've got some great associate members with APGA. So associate members are kind of our classification for vendors and consultants and service providers for our distribution members, the operators. And then we've got a website kind of own all things FIMSA grant program and those associate members are listed on that page. So I'm happy to share that website with you Russell and you can get it up on the show notes for this episode.
But there are a handful that recognize the value in making this program a success. So obviously we want to protect people, protect the environment. And so safer infrastructure does that. But then, you know, kind of, you know, government relations, I'm advocacy, public affairs.
So for me, it makes our industry look better, right? If we're able to invest in our system, have a safer system, have a tighter system, we as an industry look better to the public and, yeah, our associate members want to be a part of that mission. Yeah. Interesting.
Well, what else should we visit about in regards to this in terms of the grant programs or any other, just kind of, hey, here's some other things you need to be aware of or by attention to? That's a good question. So the point's on raise is there actually was some breaking news. It was kind of a little quiet there for a few months after the legislation passed, but there was some breaking news last week.
Thems sent a letter to all of the public utilities, you know, the ones that have their op ID and are kind of regulated by Thems. They sent a letter to that list. They laid out some things you needed to do if you were planning to apply for the grant. And so, again, I'll share our website has all that information up there for folks to look at.
But that's kind of the first step you need to do. You know, obviously first of many, we talked about a bunch, but that's one that you definitely need to do is to, they ask you to register at a couple places, grants.gov, a couple other government websites that are kind of help with the funding process. And then in that letter, they also ask for feedback. So, you know, again, you don't have to provide feedback on the grant program to make sure you get a grant.
Thems is very clear about that, but they are looking for feedback. And so if you have some time, you want to provide some input to Thems. We're obviously APJs talking to them regularly, but by all means, if they hear it more than once, that'll make sense and that'll help resonate the message. So yeah, they're looking for feedback for that.
And then, so that's kind of the first or that's kind of the most near the nearest thing that folks need to do. And then like I said, really that May 15th date is what we're all are the may, I say May 15th because it's sometime middle May, I've heard May 15th, but that's, you know, that's not pretty damn quick. So as we're recording this, it's right around the end of March and it'll take us a couple of weeks to get this put out. So by the time it gets out, I'm sure people are going to be, they're not going to be a lot of time left, maybe a month.
So one of the things we'll certainly do is for the listeners that don't know this, I don't mention this all the time, but probably in this case, it's very worthwhile to mention it. At the pipeline podcast network website, we have a page for every episode and every episode in addition to having the sound file also has a full transcript and it'll also have a show notes which are links to resources. So we'll make sure to work with Stewart and we'll get all these things linked up so that you can just go to the pipeline or podcast website and it'll be a handful of links there to take your right to where you need to go to kind of get started on and learn more about this process. So hopefully that'll be a help to the industry.
Yeah. No, we appreciate it. So trying to get the message out, trying to make sure people know that this opportunity is out there. One of the things, I guess one more thing I'll mention is that we are doing some webinars, APGA staff is doing webinars for folks trying to educate them, let them know, and so I can let you know kind of the website for where folks can access the recordings of those.
If by the time this goes out, they've already happened or we've actually already had some. Cool. Awesome. Well, look, hey, Stewart, good to catch up again.
Great to have you back and we'll try not to wait three years before we have you come again. That's right. Yeah. Three years in a pandemic.
I'm happy to be back sooner than that. Oh, no, we're not having another one of those. No, absolutely. Thanks, Russell.
Appreciate your time and letting us do this. Yeah, it's great to have you. I hope you enjoyed this week's episode of the Five Planner's Podcast and our conversation with Stewart. Just a reminder before you go, you should register to win our customized Five Planner's Podcast Yeti Tumblr.
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Thanks for listening. I'll talk to you next week.