Understanding the gas system with Joe Dammel

Minnesota’s natural gas utilities are planning to grow their gas distribution systems and the volume of natural gas they deliver over the coming decades. This poses a significant challenge for Minnesota as we strive to rapidly reduce emissions from the buildings sector to meet state emission goals. But in order to understand the problem, Minnesotans must first learn how the gas system beneath our feet works and how utilities invest in it. Fresh Energy shared a new report about Minnesota’s gas system in November and in this webinar, we unpack some of the report’s key findings and answer questions.

Listeners can stay up to date on Fresh Energy's work via our once-monthly email list, blog at www.fresh-energy.org, or by following us on Facebook, LinkedIn, Instagram, and Twitter. You can support Fresh Energy’s work for a clean energy Minnesota by making a donation today!

Thank you to the band Palms Psalm for providing our theme song, "DGAF" off of their album Otuhaka. Get the latest from the band at palmspsalm.com.

Fresh Energy’s mission is to shape and drive bold policy solutions to achieve equitable carbon-neutral economies. Together we are working toward a vision of a just, prosperous, and resilient future powered by a shared commitment to a carbon-neutral economy. Learn about Fresh Energy's work and our bold "Vision 2030: Fresh Energy's Strategic Framework" at our website fresh-energy.org.


Follow us on Social Media!
Instagram: https://www.instagram.com/freshenergytoday/
Bluesky: https://bsky.app/profile/freshenergy.bsky.social
Facebook: https://www.facebook.com/freshenergytoday
LinkedIn: https://www.linkedin.com/company/fresh-energy/

Transcript

Jo Olson: [00:00:12] Hello and welcome to Decarbonize the Clean Energy Podcast from Fresh Energy. Fresh energy is a Minnesota nonprofit working to speed our state's transition to a clean energy economy. My name is Jo Olsen. I'm the lead director of communications and engagement with Fresh Energy. And today, I'm here to share a recording of our recent webinar called Understanding the Gas System. I recorded this webinar with Joe Dammel on December 14th. Joe Dammel is Fresh Energy's Managing Director of Buildings, and thank you to the band Parm Som for providing our theme song, It's Gaff, off of their album oh two Hakka. Get the latest from the band at Palm som com. All right, let's jump into the recording. Uh, welcome. This is Fresh Energy's webinar, and we're calling it Understanding the Gas System. My name is Jo Olson, and my pronouns are she her. I'm the lead director of communications and engagement at Fresh Energy. And if you've attended any of our webinars before, I'm probably a pretty familiar face, but thank you for joining us. Um, before we dive into the introductions, I want to do a bit of housekeeping with how today's webinar is going to roll. Um, first, yes, we will absolutely be sharing a webinar of this recording with everyone who registered. So if you registered, you will get an email either today or tomorrow with a link to the recording. Um, and we'll also be posting it to our podcast. We have a podcast if you don't already subscribe. It's called Decarbonize the Clean Energy Podcast, and you can find it on your favorite podcasting app.

Jo Olson: [00:01:56] Um, and second, many of you actually a lot of you submitted questions in advance when you registered for today's webinar, which was really awesome. Thank you so much for doing that. We'll be taking questions at the end of the webinar and you can submit them in real time. Um, so if you have questions while we're talking, there should be like a little button on the bottom of your zoom called Q&A. If you click that, you can type in your questions and we will see them. We will do our best to get through as many questions as we can. Although I think we've got a lot of content to get through before we roll into the Q&A. Um, so before we get going, those of you who are new to Fresh Energy, welcome, uh, Fresh Energy has been working on clean energy and climate policy issues here in Minnesota and throughout the Midwest over about actually, 31 years. Uh, we're changing the world through bold policy solutions that move us to a just, carbon free future. And we're helping everyone who lives here and their dependence on fossil fuel electrify their lives and build a healthy, clean energy economy where all can thrive. Okay, now on to the introductions. You know me, I introduced myself, Jo Olsen. I'm the lead director of communications and engagement at Fresh Energy. Uh, Isaac, why don't you introduce yourself next, and then we'll go on to the other Joe, the star of the show.

Isak Kvam: [00:03:19] All right. Hello, everyone. My name is Isak Kvam. I am the senior communications associate and writer at Fresh Energy. You won't hear from me a whole lot during the course of this webinar, but I will be leading the Q&A session at the end. So please remember to submit your questions. Okay. Joe, over to you. Thanks, Isaac. And hey everyone. So happy that you all are joining us today.

Joe Dammel: [00:03:40] I'm Joe Dammel. Use he him pronouns. I'm the managing director of our buildings department. Uh, a little bit about me and why I'm talking about gas to you all today. Uh, I have a background in environmental engineering, uh, and also law and policy. And I've spent about, uh, the past decade, uh, working in the energy world. Actually started out at, uh, the largest gas utility in Minnesota, Center point, uh, before entering the public sector, uh, where I worked at the attorney general's office, uh, the pollution control agency, which is our environmental agency. Uh, and before coming to Fresh Energy about two and a half years ago. So, yeah, I guess you could say I was a fossil fuel guy before, uh, becoming a de carb, bro.

Jo Olson: [00:04:27] So I think I put that in the notes for us. Um, and I'm delighted that you actually said it. So I'll read whatever you.

Joe Dammel: [00:04:34] Put in front of me.

Jo Olson: [00:04:35] That's why I love doing webinars with you, Joe. Uh, thank you both. I really appreciate the introductions. So now let's zoom out for just one moment and talk about why we're here today. So Fresh Energy is hosting this webinar, um, to discuss the blog slash report that we released a few weeks ago about the gas system. Uh, so to summarize in a nutshell, we know that Minnesota's natural gas utilities are planning to grow their gas distribution systems and the volume of natural gas they deliver over the coming decades. Why does that matter? Well, Minnesota needs to rapidly reduce emissions from its building sector to meet state emissions goals in a way that's affordable, equitable and provides family sustaining jobs for Minnesotans. So in order to do that, we first need to understand how our gas system works, how our utilities invest in it, and how that affects Minnesotans, which is why we're here today. Um, so I don't know if the folks on this webinar had a chance to look at the report slash blog that we put together. There's no need to. That's fine. There was no homework at all needed to understand the discussion we'll be having today. Um, but if you do find that you want to do some reading after, uh, good news, bad news. Qr codes are back. Everyone scan the QR code on your screen or visit that short URL to view the full report. Um, I'll also send it out in the post event email too, so you'll get a link to it there. Um. So like I said, no homework needed to understand the discussion. We're starting at the beginning, right, Joe? The very beginning.

Joe Dammel: [00:06:10] Yep. We wanted to start at the beginning. This is really just the first, uh, kind of entree into talking and thinking about the gas system. Um, so no homework needed. I will be assigning a very short but hopefully fun homework assignment to to folks at the end. But, uh, yeah, looking forward to talking about it.

Jo Olson: [00:06:30] All right. Well, now let's zoom out. I stopped sharing my screen. We'll pop it back up in a little bit here. Um, but, Joe, you set the strategy for fresh energies. Entire buildings department, which encompasses Fresh Energy's work on building energy performance, building electrification and gas system decarbonization. So you've got a lot on your plate. Why dig into all this foundational work around the gas system itself?

Joe Dammel: [00:06:59] Yeah. So, you know, the, the work that the buildings Department does is really focused on policies to decarbonise the sector. Um, in Minnesota, about two thirds of of homes and businesses use gas for, for heating. Uh, and so we thought that in addition to gas getting a lot of attention, uh, recently, uh, in the news that it was really important to have a back to basics discussion, uh, to help ground the policy discussion that we're going to that we are having and that we're going to be having over the coming years. Um, you know, we think that similar to the electric system that I think folks might be a little bit more familiar with. Uh, the gas system is going to go through a really significant change over the coming decades. But in order to really understand those changes, we we need to understand the system itself.

Jo Olson: [00:07:49] All right. So let's talk about this blog post. So there's a lot of information in the blog. How long did it take start to finish noting that okay, this isn't the finish. You just said this is part of a longer Tum strategy. But like this blog itself, phase one, part one how long did it take?

Joe Dammel: [00:08:06] Yeah, so we added an expert to our ranks with Doctor Curt Norgaard this spring. So he, along with my Buildings Department colleague Caitlin Eichten, uh, spent the spring and summer and fall gathering utility data, uh, from federal and state agencies, uh, and from filings, uh, at the Public Utilities Commission. There's a lot of data out there, and it takes a while to really figure it out and make sense of it. So we gather the data, and we wanted to piece it all together and really understand how to pull some of the signal from, from the noise. So our again, our blog post is, is kind of the result of, uh, a summer and falls worth of, of, uh, investigation and analysis by the team. Uh, but there's a lot more from that to come.

Jo Olson: [00:08:56] And to be clear, you weren't in a vacuum. You and the team working on this were not working in a vacuum. You got some feedback from our big gas utilities here in Minnesota. So what exactly did that look like? And did you get any pushback when you started digging in?

Joe Dammel: [00:09:11] Yeah. So we, you know, we try to operate under a no surprises policy when it comes to our counterparts at utilities. So we we did share some of the uh, the figures in ahead of time, um, that are in the blog post with utilities and got some really good feedback. Um, one, for example, was uh, a suggestion to, to whether normalize our data. So, uh, the weather changes year over year, and that has a direct impact on the amount of gas that that's used. So, uh, you can kind of normalize that data to, to make, uh, to kind of equalize some of the, the, or take out the impact of, of weather on sales data. Um, so it was a good suggestion. We did it. Um, you know, I think fresh energy and utilities have a shared interest in getting accurate information out to the public. And so, uh, the more we can do that, I think the better the conversation will be in the future.

Jo Olson: [00:10:11] Great. Thank you. Joe. Um, so I did a word count on the blog, and it's about 2000 words, which it's a lot, but it's also pretty concise when you consider the level of information we had to share. And there's even more coming. So I know there's a white paper underway. Um, but let's talk about the really big collaborative group effort that made this blog post what it is, who is involved, what roles did they play? Joe, I know you kind of like Co did all the master coordination behind things.

Joe Dammel: [00:10:48] Yeah. And I previewed a little bit of the work that the buildings team with Kurt and Caitlin, uh, that they did. But again, you know, if anyone who's gone through, uh, the docket system, which is where everything, uh, that is filed at the Public Utilities Commission lives, it can be really difficult to find your way around that and understand what you're looking at. Uh, but there's a treasure trove of information out there if you know where to look. So, um. Yeah, a lot of effort in thinking about, uh, you know, pulling the data and then actually understanding what the data was telling us. Uh, was it through, uh, Kurt and Caitlin's work and thought, uh, and then a big shout out to the the communications team. Isaac said, in a lot of very technical meetings where we're talking about like, uh, you know, what customer classes to include, what how to weather normalized data, how to display the data, uh, and, and I think Isaac did a wonderful job absorbing all of that information and, and doing a lot of the writing in the piece. Uh, and then Christine McCormick, who is also in the communications team, did did a wonderful job working with Caitlin to look at some of the maps that are going to be coming, uh, a little bit, uh, in the future, we'll get a preview of some of them here, uh, in, in this presentation. But, uh, you know, there are no utility system, uh, service territory maps for, uh, for a number of reasons. And so pulling them together and creating that was a no small feat on Christine's part.

Jo Olson: [00:12:27] Yeah, it was a lift. And I'm excited for when we get to the maps part, because they're actually pretty fun. Um, so let's if you don't mind, let's shift our focus, uh, back to the information that's in the blog post itself, as you always like to say. And, and I think the Star Tribune quoted you once on this, and I'll never let you forget the proof is in the pudding. Right. So we promised the folks joining us today that we're going to unpack some of the key points from the blog itself. So let's start with what you and Isaac, the blog post author, have been calling the hidden natural gas system beneath our feet. Uh, it just so happened that when a lot of this research you all were doing was underway, there were actually gas main and line replacements happening, like right in my neighborhood. So in the blog post, the I actually, I think, like all of the photos from the blog were taken from my blog, but let's start at the very beginning and just have like a quick primer. What is natural gas?

Joe Dammel: [00:13:21] Yes, natural gas is an odorless, colorless fossil fuel that it's primarily made up of methane. And so, for the chemistry enthusiasts out there, that's the chemical, uh, equation of CH4. So there's one carbon molecule and four hydrogen molecules. Uh, natural gas is found underground in deposits, sometimes with other fossil fuels like oil and gas and sometimes locked in shale deposits. Uh, that can be tapped using horizontal drilling and hydraulic fracturing. So we've heard a lot about frack hydraulic fracturing or fracking in the news the past 15 years or so. And so that's how you get gas from the ground. Um, like other fossil fuels, natural gas stores energy in the form of the chemical bonds that make up the molecule. Uh, and when that molecule is combusted and the presence of oxygen, it releases that energy in the form of water vapor and carbon dioxide. So we use that heat in a variety of sectors, uh, from electricity generation, industrial processes, heating, buildings, cooking or food, heating water. So we're going to talk a lot more today about the really the buildings sector.

Jo Olson: [00:14:39] Yeah, and I think that's a good point. Um, at Fresh Energy, we talk a lot about like, the consumer side of natural gas, like the appliances we use in our homes, that kind of thing. But that's not the focus today. The focus is like the system. Um, and so now that you've given us that little chemistry lesson, tell us where the gas actually comes from.

Joe Dammel: [00:15:00] Yeah. So if you look at a, at a map of these deposits or plays, you'll notice that Minnesota is really in a doughnut hole where we don't have any gas. Uh, in Minnesota itself. So we import 100% of the gas that we use. Uh, we import it from places like Texas and Oklahoma, uh, Canada, North Dakota. Uh, it gets to us via Interstate pipeline and the interstate pipelines, uh, deliver the gas to our utilities door. Uh, which is more technically known as a city gate, uh, or town border station. Uh, and then from there, the gas travels through the the utility distribution system until it reaches the meter affixed to the side of your home. And we'll dive a little bit more into the distribution system itself here in a minute. But.

Jo Olson: [00:15:54] So it's actually quite the journey. Um, and this natural gas comes to us from utilities. And now to refresh our memories about the biggest utilities here in Minnesota, I think I think I have a Christine map for that. So I'm going to share my screen yet again. Right. There we go.

Joe Dammel: [00:16:12] Yeah we have a map for that. Um, so yeah, this is uh, a view of the investor owned gas utilities. Uh, so starting with, in order of, of size, uh, CenterPoint energy, which CPE, uh, Excel. Minnesota Energy Resources Corporation, or Merc, Great Plains Natural Gas, and then Greater Minnesota Natural Gas. Centerpoint, Excel, and Merc are by far the largest, uh, of the of the five utilities. And you can look at the map. And I think what's striking to me is that, you know, it doesn't cover a huge portion of the state from a, uh, geographic perspective. Um, and so I think we'll we'll you might ask, well, what is the rest of the state use for, uh, for heating? And we also have a map for that. For that. There we go. There it is. Uh, so you can see and, and, you know, the, um. But the legend is a little bit small, maybe, and hard to read. Um, but you can see here that utility gas is in red, and that corresponds again to the, uh, primarily to the investor owned gas utilities. Um, like I said before, about two thirds of of homes get, uh, natural gas in Minnesota. Uh, some folks use electricity for heating at this point, primarily. That's electric resistance heating. Uh, and then the the rest of, of, uh, folks use, uh, delivered fuels like propane. Um, and some even use wood for, for heating. So the state is really diverse in terms of the heating fuels that, that we use. Uh, and you can see too, that, you know, the utility gas is primarily focused in areas that are more densely populated. Um, and that's a byproduct of of how gas utilities grow. Uh, they grow to reach population centers. They grow around interstate pipelines. Uh, and it's really the growth is is really determined on what's economical for them to, to grow. So the gas system, you know, serves the majority of, uh, Minnesotans. But as you can see here, it's really concentrated in, uh, primarily where there's population centers.

Jo Olson: [00:18:33] And actually, since this is such like a complex map, I think I'm going to leave it up just for this next section before we go into the next slide. So as you had just thanks for that background, but can you talk about how our utilities get this gas where it needs to be. So folks in our neighborhoods can turn on their gas stove or other gas appliances.

Joe Dammel: [00:18:53] Yeah, absolutely. Uh, so the gas utilities that we all know are basically just distribution systems or networks, uh, that are made up of a variety of different things like gas mains, uh, regulator stations, service lines, meters, uh, and their job is to deliver the gas and the and really just to deliver heat, uh, to people. So one way and it is helpful to have the map up here, the one way to think about the distribution system and how that interacts with the interstate pipeline system is to think about roads. And I think it's timely because of the holiday season. Many of us might be traveling on those roads to different, different states. So, uh, you can think about interstate pipelines as kind of the freeways, interstate freeways. So maybe 35, uh, could be an interstate pipeline that goes in and out of, of Minnesota. Uh, and it enters the distribution system at utilities. Uh. Let's call that like, uh, Interstate 494. So it gets off the interstate pipeline, gets into, uh, still high pressure, uh, high flow lines that the distribution utility owns. Um. It travels to your house, eventually going through a regulator station.

Joe Dammel: [00:20:18] Uh, and that's where it goes from a higher pressure to a lower pressure, smaller diameter pipes. Uh, you could think of a regulator station, kind of like a freeway exit. Uh, it's where you go from, like, a higher speed freeway to lower speed city streets. Uh, gas mains. Can be thought of like as the city streets that ultimately reach your neighborhood. Uh, and then turning off of those city streets is a driveway. Uh, and that can be thought of as a service line, which is the line that goes from the gas main to your house. And then finally, I if I can extend this analogy anymore. Uh, your garage can kind of be seen as your meter. Uh, and that's where the gas, uh, you know, enters your home and then runs through piping, uh, to get to things like your furnace or boiler, your stove. Uh, kind of the things that you're, you're everyone's familiar with. So it's a long journey and I. Yeah, if you think if you're traveling over the holidays, you can think of yourself as a gas molecule traveling from, uh, the, the field to, uh, your home.

Jo Olson: [00:21:24] That's both the nerdiest and coolest thing you've ever said. So. Yeah. Um, so I'm going to move on to the next picture. So this is part of the journey. So this distribution network is hard to picture. Uh, and what you're seeing here on this slide takes a really technical approach. So it's a cross-section image that was shared by the city of Minneapolis a few years back on their Twitter. And um, our colleague Margaret Cherny Hendrik shared it with me. And then I kind of got hooked on it because it was a really helpful. You can see the gas mains there denoted as yellow. And while obviously it's really important to see all the infrastructure under our feet, it doesn't really tell the story of the gas system itself. And like Joe said, it's a line that brings fossil fuels right into our home. Um, so for this ongoing gas series that we're doing, uh, because I couldn't resist, we worked with a local artist to make things feel a little more personal. So obviously this is a super simplified image, but it shows how kind of like what Joe was saying, how where we live and work are connected to the natural gas system. Full credit to our artist, Michael Jacobson for taking this one on. He did a really fabulous job of showing how that complex system, in a very simplified way, connects to where we live and work. So, Joe, have you found that? Oh gosh. Like helping people understand the scope of our gas system to be a challenge, like your highways analogy feels like it's well practiced. Like, have you tested that out with people or are people grasping it?

Joe Dammel: [00:23:02] Yeah. I mean, I think about the electric system and folks kind of know, oh, there's a power plant, there's a wind farm, there's a solar, the solar field. Uh, there's solar panels on our house, and there's power lines that go into it. And I think, uh, yeah, people don't have the same connection to the gas system, even though I think it's like a similar place, a similar role. Um, so having visuals that I think is has been really helpful to, uh, really demystify, uh, the system itself.

Jo Olson: [00:23:32] Well, and so speaking of this gas system that we've seen complex and simplified illustrations and maybe have a slightly better grasp on it, um, but this gas system is growing and expected to continue growing, and that's a problem. So Joe does this is kind of a loaded question, but does Minnesota have a big gas system currently? What you described sounded pretty big.

Joe Dammel: [00:23:54] Yeah. Yeah. And so we we crunched the, the numbers, uh, on how many miles of gas mains. Again, those are kind of like the, the, uh, the city streets that deliver the gas to folks. Uh, and Minnesota currently has over 34,000 miles of gas mains installed. Uh, and another way to think about that, because we don't often think about things in, in thousands of miles, is that it's, uh, enough to circumvent the Earth about one and a half times. Uh, so 90% of those 34,000 miles of mains are owned by the investor owned utilities, uh, with the rest owned by municipally owned gas utilities that are generally smaller than the IOUs.

Jo Olson: [00:24:39] And just to be clear. So those are gas mains, not like the lines that go up to our house. Right. That's not included in the mileage okay. Correct. All right. Well I'm going to pull up a chart here that accentuates the point you're making. Um, so while I get this pulled up, is there anything on it that you want to call special attention to? It should be showing up here in just a second. There we go.

Joe Dammel: [00:25:05] Yeah, that can help folks orient themselves. So again we have the investor owned gas utilities color coordinated uh, in fresh energy colors, uh, because of course, uh, and you can see here that. Yeah, the, the miles of mains are, are, are gradually growing year over year. And we've taken about the last dozen years of data. Um, so this just means that the system is, uh, exhibiting an upward trend, uh, year over year.

Jo Olson: [00:25:37] Thank you. I'm not really sure what I was thinking with all these, like, I'm going to share. I'm going to stop sharing. Um, there's a lot of back and forth, but I think it's good because I wanted people to, like, see your face, um, and, like, hear you talking instead of having you just be, like, a tiny picture behind a slide. Um, okay, so who makes the rules for these utilities? How are they regulated? How does that happen?

Joe Dammel: [00:25:58] Yeah, like electric utilities, gas utilities are regulated by the Public Utilities Commission. And they set the rates that the utilities can charge.

Jo Olson: [00:26:10] Okay. All right. So and you work at the Public Utilities Commission sometimes. Right. I'm actually shocked. We Thursday's a big day for them. So I'm surprised that we're having this event on a Thursday.

Joe Dammel: [00:26:20] I hope I'm not missing anything.

Jo Olson: [00:26:23] Um, okay. Well, now indulge me and give us all a history lesson. So how did we get to where we are on the regulatory front, which you mentioned earlier? If there's a problem with building out the gas system, why historically have we built it out so much?

Joe Dammel: [00:26:39] Yeah. So this is, I think, going to be fun. There's like a little bit of math, but hopefully not too much. Um, but if you, if you wanted to start a gas utility from scratch, uh, you would first have to install the first pipe. And that pipe. Should connect new customers to the system, and those customers will use that that gas that flows through the pipe, uh, and pay you the utility rates. So I think there's really two simple equations to explain utility rate making. And the first one is kind of what I explained is that the more pipes and therefore like, the more assets. A utility puts in the ground, the more customers you get, and then the more revenue you can make as a utility. Uh, and that. Relationship, I think helps to explain why utilities, electric and gas any utility that gets its rates set based on how much, uh, how many assets they have in the ground, uh, have an incentive to then grow. Um. I think the second equation that I'm about to present will help to explain how rates are set, and also help to explain why that kind of growth mindset was ultimately a good public benefit. Uh, at least in the past. So we're going to talk a little bit about fractions.

Joe Dammel: [00:28:10] Uh, so remember fractions have a numerator on top and a denominator on the bottom. So at its most simple basic level uh, a rate is the revenue requirement divided by the units of energy the utility expects to sell. Uh, a revenue requirement again that's at the top is comprised of utilities costs over a certain period of time called a test year. And those costs include, uh, O&M expenses, salaries, uh, and also, importantly, a return of and on the assets that the utility has installed in the ground. And that gets to kind of, uh, the fundamental premise of a utility is that you, uh, are granted this legal monopoly to, uh, provide service to customers in exchange for. A return on your investment, uh, by those customers. So, um, you have utility revenue requirement on top, and then on the bottom, the number of energy units sold. And that equation equals a rate. All else equal. Um, it can be very complex when you actually get into it. You can there's taxes. There's, uh, deferred, uh, deferred taxes, there's accelerated depreciation. There's like a alphabet soup of acronyms like Quip or Quip, uh, and uh, it can get complex, but the thing you have to remember is just the revenue requirement on top, and then the number of energy units sold on the bottom numerator denominator.

Joe Dammel: [00:29:47] So when gas utilities are growing or when any utility is growing its system, it's growing the numerator, but presumably also growing the number of customers and the number of uh, energy units that it's selling. So as long as those two can grow kind of in tandem, uh, proportionally to each other, it results in a steady rate. So, you know, one, uh, say two divided by one is the same as 50 divided by 25, for example, that same relationship. Um, and so I think the, the benefit of having utilities over time has been that, uh, because of the economies of scale, uh, the more they grew, the more customers grew. And then the rates, uh, could, you know, stay steady, uh, with, you know, pretty infrequent rate increases and more and more people could get connected to electricity and gas. And that was a good thing, um, for, uh, a number of reasons. So that that hopefully helps explain why utilities operate the way they do and why it's been a good thing over time to have utilities grow, because that growth ultimately helped consumers, um, be a part of the economy.

Jo Olson: [00:31:02] But things have changed, right? What's changed?

Joe Dammel: [00:31:07] Yeah, I think there's three big drivers of of change that we're looking at on the gas side. Uh, and those three drivers are, are cost, climate and health. Um, and we're going to talk about cost first. Um, because today and you referenced all the pictures in the, in your, in your, in the blog or from, uh, a replacement project, um, in your neighborhood. And that's true that gas utilities and the infrastructure is being replaced. Uh. Currently on that. And they're being replaced in an accelerated fashion compared to kind of the historical right. And we'll talk a little bit about that, uh, in a minute here. But I think the key is that getting back to that equation, uh, the numerator is growing faster than the denominator now because of that replacement. And that means higher rates, more frequent rate increases. Uh, and it's also increasing the risk of stranded assets into the future. Uh, so we can talk a little bit more about that as well.

Jo Olson: [00:32:16] Great. So before we talk more about cost and stranded assets, let's focus in on these accelerated replacements. So that terme that you used, what is driving utilities to accelerate the speed of these replacements.

Joe Dammel: [00:32:34] Yeah.

Joe Dammel: [00:32:36] Well so I'm going to talk about another history lesson. And I learned very recently that CenterPoint and its predecessors have actually been around since the 1800s. And that's really hard to believe. Uh, gas utilities across the country really got their start providing, uh, street lighting services. So a lot of, uh, utilities have like, light and gas in, in their names. And that's a vestige of them building out a network of pipes to deliver light instead of heat, uh, for places. And, uh, those pipes are, are long gone. Um, but there are a lot of pipes from the 50s, 60s, 70s, 80s that are now reaching the end of their useful life and need to be replaced if they haven't already. Um, so, for example, cast iron gas mains of were primarily installed in between, like the turn of the century and in the 1950s. Uh, and we've learned today that or recently that those have an elevated risk of, of leaks. Um, so utilities like CenterPoint have made a concerted effort to replace that pipe material over the past decade. It's now out of the system. Um, and that's and that's a good thing. It's decreased the risk on the system. Um, so if you think about a really old, uh, system like that replacement of old assets is is normal. Uh, there's every year there's assets that are being retired and assets that are being added or replaced. Um, I think the change, though, is that over the past decade, um, utilities have accelerated the pace of those replacements, in part due to, uh, new federal regulations that, at their very highest level, require utilities to identify and address risks on their system. Uh, and one of the way they one of the ways that they've done that is to accelerate the replacement of those pipes. Uh, so again, we've we're now over a decade into that kind of accelerated push, uh, where utilities have shown results and replacing the riskiest pipe materials like cast iron in their system, uh, and have now moved on to the kind of the next, uh, materials in their system, uh, like bare steel, some legacy plastic.

Jo Olson: [00:35:00] Got it. Okay, well, so now that we know what you mean by accelerated replacement, let's backtrack and talk about cost and stranded assets.

Joe Dammel: [00:35:11] Yeah. So, uh, to put a number on the cost. Part of that utilities today are spending hundreds of millions of dollars every year to, to do those replacement programs, along with a number of other, uh, reasons that they invest in, in their system. Um, so recalling kind of that, uh, the formula, the fraction where, uh, the numerator or the, the gas system assets are growing faster than, uh, than the, the, um, units of energy that are going through it. Uh, that means you have higher rates and more frequent rate case requests or rate increase requests. Uh, that's what we're seeing. Um. I think another historical fact about the last decade or so is that gas prices have been unusually low, or natural gas spot prices have been unusually low and steady, and that's in part due to the hydraulic fracturing revolution, the shale gas revolution that, uh, that I mentioned at the at the top here. Um, so consumers haven't felt the brunt of those rate increases, uh, in part because gas prices have been low and not super volatile. I think that we've seen in the past few years that dynamic is changing, and it's not something low, low natural gas prices that we can bank on for the future. And that's going to have an impact on pocketbooks. Um, so. That's kind of the problem right now. And I think as we look to the future, uh, which we're going to talk about here in a minute. Uh. We don't, we can no longer assume that we're going to be using the gas system, uh, in 50 years, the same way as we've used it in the past 50 years. Uh, so some of the drivers of that change is that we're changing the way we heat our homes and buildings and, uh, that evolution, the energy transition that we talk a lot about, uh, runs right into like, a 40, 50, 60 year old, uh, expected useful life of a pipe. Um, so that's going to be causing additional, uh, stress on the system that, that we're going to be focused on finding policies to address.

Jo Olson: [00:37:32] So, Joe, I'm just just backtracking for like two seconds on the equation that you went over. I'm thinking ahead to like, the white paper that I think will probably come out in in January or February. Do you think that's something that we could, like, illustrate a little bit in, in the white paper? Like I'm realizing I didn't put a slide for it in the deck. You know, we're describing it really well, but it would be like maybe a good visual aid. So maybe that's something we can work on because you did such a good job describing it. I want to like help that with an image. So anyway. Future problem. Yeah. Uh, so you mentioned three drivers for gas utility change. So let's talk about gas consumption and Minnesota's state climate goals.

Joe Dammel: [00:38:15] Yeah. So remember when we burn gas we release carbon dioxide. And methane itself uh, is also really potent greenhouse gas as well. So the thousands of miles that it takes to get from the field to your home, uh, some of that is, is leaking out, um, as well. And that's a driver for, for climate change, um, a good proxy to, to think about the climate impact of, of gas is to, to look at how much gas consumers are using year over year. And it turns out that, uh, it's increasing in buildings on a year over year basis, and it's projected to increase, uh, into the future in terms of gas sales.

Jo Olson: [00:39:03] There we go I was muted sorry about that. We have a slide for that. We have a chart. I can't share a screen talk and unmute myself at the same time apparently. So tell us what we should be seeing with this chart.

Joe Dammel: [00:39:13] Yeah. So uh, first and foremost, uh, is I want to talk a little bit about energy efficiency and conservation. Uh, so Minnesota has one of, I think, the premier, uh, energy conservation and efficiency and now fuel switching programs in the country. And those those are operated by utilities. And we've made tremendous inroads in increasing the availability and, uh, market adoption of a number of really efficient, um, products in folks homes and businesses. Uh, and, you know, we say at Fresh Energy that the best energy resource we can use is the energy that we don't have to use. Uh, and so energy efficiency and conservation throughout this time and really since the 80s and 90s, have been, I think, a hallmark of, uh, making sure that what we're seeing here on the graph isn't a much steeper, uh, increase in terms of gas use over time. So I want to give, uh, kudos to everyone, including utilities who work in that in that area. Uh, they've done a great job over time in delivering those energy savings to customers. Um, but I think you can see here on the graph, and this is a combination of both historical and future projections directly from utilities, uh, regarding their gas sales, uh, and so you can see again, that's divided by gas utility. And then, uh, the y axis is dekatherms. And I do want to go on a slight detour. If you haven't heard of a dekatherms, that's okay. That's probably normal for for most folks. Uh, and what I'm about to say might not make that much sense either, but, uh, dekatherms is ten therms of gas or 1 million BTU of gas.

Joe Dammel: [00:41:08] Uh, all of these units describe the energy content of natural gas, which can also be converted to a volumetric measure such as cubic feet, provided that you have a conversion factor which can change depending on the energy content of the gas itself. Uh, all very complicated and esoteric and not designed to make it easy to understand how much gas you're using. But, uh, you can look at the graph and see that there's a line, a trend. And I think that's that's really the important thing here. And, uh, there's a lot of ways to slice and dice this, this data as well. So you can think about number of customers over these years. Uh, you can derive from that use per customer to see if that's increasing, decreasing or staying the same. And then you can also consider factors like the size of buildings over time. So if we, uh, grow the size of buildings, that's more, you know, uh, of bigger volume of air that we need to condition. Uh, and so that does have an impact on, on these numbers as well. So there's a lot of moving parts that go into this. But I think the main thing is that, you know, it's still steadily increasing. And the gas use and then emissions, uh, over time. And that's running into, into our state, uh, climate goals.

Jo Olson: [00:42:24] Well, exactly. So yeah, Minnesota state climate goals should hopefully address this consumption issue. But how does this figure to square with economy wide reduction goals?

Joe Dammel: [00:42:38] Yeah. So Minnesota has economy wide greenhouse gas reduction goals that are now enshrined in statute. And there's an interim goal of 50% reduction by 2030. And then a 2050 goal, which is to get to net zero using a 2005 baseline year. And again, yes, these are economy wide goals, unlike, say, the 100% clean electricity standard or mandate. Um, so there's no gas version of the 100% electricity bill or law. Um, so their economy, every part of the economy. Um, buildings are obviously a significant chunk of that electricity generation, transportation, land use and agriculture. Uh, all of all of those are are the sectors that we think about when we talk about the economy. Um, so, you know, it's accurate to say that gas utilities don't have a mandate to reduce their greenhouse gas emissions by law. Um, but I think it's also accurate to say that, uh, without any reductions to greenhouse gas emissions from the building sector, we won't reach our interim or our final state economy wide greenhouse gas reduction goals. So we need the building sector to really pull its weight and contribute to these reductions. Gas utilities are, uh, one really significant way to do that and that fresh energy. We're also looking at things like building codes and the impact of incentives.

Jo Olson: [00:44:09] And we have another chart to share too. So what? What should people be noticing here?

Joe Dammel: [00:44:14] Yeah, this is, I think, an evocative chart, uh, that shows in red, uh, the, the trend or the expected trend of, uh, greenhouse gas emissions both. And again, this is combining some historical data with those future forward looking projections. Uh, and the blue line is the, uh, green, the economy wide greenhouse gas emissions reduction target. Uh, and so if all that is to say, if the gas, uh. If the gas sector of the building sector was moving in lockstep with those goals, uh, there would be one line. It would be the blue line. But we can see here there's a divergence in in terms of the, uh, expected, uh, and historic greenhouse gas emissions from, from the sector.

Jo Olson: [00:45:02] Um, exactly. So I guess all of this that we've talked about today, does this mean that the gas system needs to go away?

Joe Dammel: [00:45:12] Yeah. No, I want to be pretty clear about that. Um, in my mind, there's really no reasonable argument that we would just up and leave from the gas system, uh, and mass overnight. You know, that's not just how. That's not how systems like this change. Uh, or but I think on the. Same side. There's no reasonable argument that we'll be using the gas system the same way as we have in the past into the future. Like I've mentioned before, how we heat our buildings will change. There's going to be more effective and innovative solutions that come to market. A lot of those bolstered by state and federal programs. Uh, so I also struggle seeing having a fully functioning, fully built out gas system existing only as a backup system as well. Um, and that's a math problem to me. So recall our earlier, uh, conversation about the numerator and the denominator. Uh, it's a rate design problem. So if you have the denominator, which is the energy units sold, uh, go much lower than it is, then rates will go much higher, even if you keep everything else the same. Uh, and using a gas system only as backup for, for heating, I think really, uh, puts a circle around the math problem that that presents. Uh, and so, you know, that there's a long way to get to that problem. And I think, encouragingly, a lot of ways that we can, uh, make sure that that doesn't happen. Um, but, you know, it, I think it it's pretty clear that if you just if you drastically reduce the amount of gas that you're selling, something needs to change in terms of rate design.

Joe Dammel: [00:47:05] Um, we really see the future as being somewhere in between, uh, the two future unlikely futures that I talked about. Um, again, one where we don't use the gas system anymore and the other where we use it just like we have in the past. Uh, and understanding, I think the pathways available to us to get to that future, uh, that sweet spot, uh, is a key challenge that we face at Fresh energy. Uh, and in Minnesota, you know, constantly we, uh, luckily, it's something that other folks around the country are also grappling with. Uh, and I'll just highlight a recent decision from the Massachusetts Department of Public Utilities, where they filed a sweeping order and a and a what's known as their Future of gas docket, uh, that looked at slowing the expansion of the gas system, uh, determining that the gas system as a backup heating option isn't feasible. I think for some of the reasons I just mentioned, uh, and that certain alternative gases like renewable natural gas may not be viable for Massachusetts. Now, that's a Massachusetts decision for Massachusetts residents and Massachusetts utilities. Uh, and, you know, we have a different landscape in Minnesota. So we're really committed to finding a Minnesota based approach to decarbonizing this sector. Some of the ideas we have are going to be, uh. Covered in greater detail, I think, in future posts, but we really want to focus on a Minnesota based solution.

Jo Olson: [00:48:37] Well, and as we mentioned earlier on this webinar, Joe, your team's work is really just beginning on this. So you kind of touched on this, but what what do you see briefly? I know we're coming up on time as what's next.

Joe Dammel: [00:48:49] Yeah.

Joe Dammel: [00:48:49] Well, the Public Utilities Commission here is engaged in a long Terme system planning docket, uh, that we're involved with, along with a number of our partners. Uh, and I think that that kind of gets to shining a light into the different pathways and understanding both what, how gas utilities function today, but also the different paths that are available to them into the future.

Jo Olson: [00:49:15] So you're saying that this kind of thinking and long terme planning for the guest system is not unique at all to Minnesota?

Joe Dammel: [00:49:23] No, I think, uh, I mentioned Massachusetts. Uh, they're doing a lot of work on on things like gas planning. Uh, Colorado has also been engaged in a lot of the same discussions that that we were having here in Minnesota. Um, and I think one of the benefits and quirks of Colorado is that, uh, Xcel Energy has a gas utility in Minnesota and a gas utility in Colorado. And I know they have a lot of folks involved, uh, in both states. And so I think, uh, insofar as, you know, Minnesota can be, uh, a place where we can take kind of the best approaches from across the country and deploy them here. And it makes us, uh, I think it sets us up in a, in a really good position.

Jo Olson: [00:50:06] Mhm. Well, and today we've talked a lot about what makes the gas system, the gas system, the parts and pieces of it as well as the regulations. There's just so much that we haven't really dug into, including, uh, the health impacts of burning fossil fuels in our homes. Um, so I'm going to share my screen really quick. There's more to come on this. But in the meantime, Fresh Energy did put out a blog post that Isaac wrote a blog post with um, Doctor Norgaard, who's on our team. So, um, for some interim reading, this might be a good thing to check out. Um, so I wonder, we have a whole plan for what next year looks like and the communication side of talking about gas. And, uh, in fact, this blog and webinar, as I alluded to earlier, was really just part one. So what's next, Joe?

Joe Dammel: [00:50:56] Yeah. So hopefully today we've we've been able to describe the challenges that gas utilities uh, and, and we are facing uh, to come in the future, as you mentioned, as a white paper that's going to dive even deeper into some of the themes that we covered in, in the post. And, uh, we're also planning to a series of, uh, posts about some of the tools that we can deploy to meet these challenges. So I'm really excited to, uh, for 2024 and, and sharing a lot of that, uh, new information with folks.

Jo Olson: [00:51:32] Absolutely. And, um, we're going to dive into the Q&A here in just a second. But first I have I have some action items for our guests. Um, so, uh, if you're able to join us here today, you're probably feeling more informed, but also probably pretty motivated. I hope, uh, to take action on what's next. Um, so first, we can say nothing but awesome good things about this coalition. Clean heat, Minnesota Fresh Energy is part of the coalition. It's a joint coalition led by Koppel, cube, Minnesota and Fresh Energy. Uh, it's made up of individuals, but also organizations. And in fact, there are already 30 organizations in the coalition. So learn more about signing up as an individual or group at Clean Heat mn.org. And second, if you feel motivated, I know we talked about like the system today, but if you feel motivated to start working on the gas system, getting it out of your life at home, First Energy created a nifty high level resource to help you figure out some of the federal and state tax incentives and rebates, uh, related to electrification. So check out electrification and youth org. And then third, our development team. I'd be in big trouble with our development team if I didn't remind you that Fresh Energy is a nonprofit. We rely on individual donors to help make our work happen, and you can support our work like what you saw today by making a year end donation. Today, details and QR code are on the screen, and we'll include all these links as well in the post event email. Uh, and of course, Joe and his team will continue our bread and butter policy work, uh, continuing to engage in the Minnesota Public Utilities Commission on gas dockets. Um, but I guess that's kind of a whole other webinar. Anything to add, Joe, before Isaac takes it away with the Q&A?

Joe Dammel: [00:53:20] Yeah. Well, I mentioned at the outset that I was going to assign some homework, but it's not going to be too much of a drag, I hope. But, uh, and if you've heard me talk about the gas system before, you might have heard this homework assignment before as well. But, uh, I'd ask everyone to go outside and take a walk around your neighborhood. Um, so if you're in an area that's served by gas utilities, if you pay a gas bill, if your landlord pays a gas bill, uh, there's actually a lot you can spot in just a walk around. And I know that here in Minnesota, it's going to be a pretty nice, unseasonably warm day today. So, uh, if you want to walk around, uh, imagine, you know, on your neighborhood street that there's a gas line running alongside of that, uh, if you see, like, a yellow marking, uh, marked, you know, spray paint, that's a utility locating its service lines. Uh, so if you're going to dig, call before you dig, obviously, uh, and someone will come out and paint those on the street. Um, so if you see a yellow line that's indicating a gas service line, um, if you walk to the corner, a lot of street corners have regulator stations. And I mentioned that's kind of like the exit, uh, where a higher pressure pipe becomes a lower pressure pipe. They look like a jumble of of pipes sticking out of the ground. And, uh, if you're normal, you have probably never noticed them before. But if you're like me, uh, you notice them whenever you see them. So I just encourage folks to, to take a walk around, uh, their neighborhood and really, uh, explore, uh, and try to find some of these elements of this energy system that's, uh, kind of everywhere. And I think it's really instructive to to just get a grounding in a sense of, of, uh, how we interact with, with the gas system.

Jo Olson: [00:55:05] I feel like homework to go for a walk and keep your eyes open is pretty good. So I'm going to pass the mic over to Isaac. This is the last you all are going to hear from me. Isaac wins the best background award. Uh, and I'm going to let him take it away with the Q&A.

Isak Kvam: [00:55:19] Perfect. Thanks, Joe. Okay, um, I've been digging into all your questions, and I'm going to lead with one that a lot of folks have been asking in some form. Um, but I'm going to read it from Kate R, who is asking what energy alternatives are there to natural gas for Minnesota winters?

Joe Dammel: [00:55:35] Yeah, that's a great question. I think one of the things that one of the technologies that we see as the most promising, uh, is electrifying heating. I think that that, uh, is primarily thought of as using a heat pump. There's a lot of different types of heat pumps. I think the two primary ones that that you should know about are cold climate air source heat pumps are using, uh, heat energy stored in the air and and pulling that out and bringing it into the home. Um, another one is a ground source heat pump. Um, some people call them geothermal. It's really ground source. It's using heat energy stored in the ground. So if you think about digging below the frost line, it's a pretty constant temperature, uh, down to a few hundred, uh, down to a certain point. And we can use that heat stored in the ground to deliver, uh, heat inside buildings. There's another concept called network geothermal or network ground source heat pumps that operates under the same principles but allows the sharing of heat and different heating needs, uh, across the system. Um. But I think that it's going to be, uh, you know, the journey to electrifying your home is really predicated on having a solid plan to electrify. Uh, and, and there's a growing number of professionals out there who can help folks navigate, you know, the variety of state and local and federal programs available and utility programs that are available. Um, and so they can help identify potential roadblocks, such as, uh, electric panels that, uh, might need to be upgraded. Um, it's just great to have a plan for this because like I said before, it's not going to happen overnight for folks. But there's a lot of promising, uh, technologies, some newer, some older, uh, and we also think that, you know, focusing on weatherization, uh, and increasing the efficiency of your home, uh, is just a really great no regrets option as well.

Isak Kvam: [00:57:34] Perfect. I see another question that kind of builds on talking about heat pumps and district heating a little bit. So Ryan Kay is wondering if we can build a networked air or ground source heat pump district heating system in Minneapolis and its surrounding residential and commercial spaces to reduce reliance on natural gas furnaces.

Joe Dammel: [00:57:53] Yeah. And this is something that, that we're really excited about. Um, I think the short answer is yes. Uh, and the longer answer is that the, uh. That the utilities here and across the country, gas utilities are starting to think about how to do this. Um, so there's, uh, a law called the Natural Gas Innovation Act, or Nia, and gas utilities can propose, uh, innovative resources or pilot projects that can help decarbonize the sector. Um, we're currently reviewing center points. Uh, Nia plan filing at the Public Utilities Commission. That includes a provision for networked ground source heat pump systems. Um, and we think that and there's also some utilities out east, like in Massachusetts that have actually, uh, started to pilot these, um, these types of systems. I think there's a great, uh, opportunity. Again, gas utilities are just, uh, a distribution system to deliver heat. And we think that, uh, if they can create distribution systems that deliver heat, that's, uh, produced using electricity from a heat pump, uh, that there's, you know, they're experts in, in running networks. They're experts in installing systems. Um, and they're experts in, uh, communicating with customers. So I think there's a great, a great potential for that to be another evolution of their business model. And again, just remembering that gas utilities really started out as like street lighting companies and then became town gas companies. And now they're distribution companies for, for natural gas. So there's, uh, if you really pull back, there's a natural evolution. Um, that's always been present in this industry.

Isak Kvam: [00:59:46] Okay. So it is 12:30. So that's time. But we're going to hold it open. So I can ask you a few more questions Joe if that's okay. So if you need to go right now thank you so much for joining us. But I'm just going to keep going since we have a lot of questions that are still in the chat. Uh, Chrissy W is curious about understanding the infrastructure development and status of delivering renewable sources of natural gas or biogas supplies to Minnesota. Is that a feasible energy source, and are there plans to invest in renewable sources of natural gas within Minnesota?

Joe Dammel: [01:00:19] Yeah, so I mentioned earlier the utility Nia, uh, Natural Gas Innovation Act, uh, and that that contains provisions for things like renewable natural gas or RNG and also green hydrogen, which is created, uh, using renewable or carbon free sources of electricity. Um, still pretty early in terms of projects on the ground, there's several that are being proposed by utilities right now. Um, our approach to things like RNG is to make sure that, uh, we're using them and to their best and highest use cases. Uh, now, that doesn't mean that it can only be used in one specific scenario. It just means that for industries that are really hard to decarbonize or electrify, uh, that we can consider using resources like RNG there. So for industrial processes that have a really high heat requirement for their process, uh, I think the dream scenario would be to have, uh, a source of RNG, uh, co-located really close to that facility. Um, RNG itself can come from a variety of resources, uh, like food waste, uh, animal waste, waste water. Uh, so it's and it's really important to understand the different characteristics of those sources as well, because that has an impact on the carbon footprint of those resources. So, uh, hopefully that is a helpful but maybe long winded way of saying, uh, yeah, that there's not, um. We don't see, and there's no really projections out there that would show that, uh, 100% of the gas that we use today is flowing through our distribution systems could be replaced by something like RNG or hydrogen, uh, even under like, the most optimistic, like, take every feedstock available, uh, across the country and deliver it here. It's going to be a tough bet. They're also facing a lot of market pressures, uh, like in the transportation sector, for example, uh, where there's more established markets for those fuels. Um, so what we what we think is that for, for the gas produced here that gets delivered here, that we're really using it and deploying it to their best and highest use cases, which, uh, we're really looking forward to helping develop.

Isak Kvam: [01:02:44] I'll ask another one here from Charles H. He is wondering if we are planning to address the extent of and mapping of Minnesota's gas distribution network, including where the gas comes from, how it's processed, and what sort of pressure maintenance and regulation systems are involved.

Joe Dammel: [01:03:00] Yeah.

Joe Dammel: [01:03:01] Well, hopefully we got, uh, a head start in, in this presentation and kind of giving an overview of what that looks like and where utilities operate. Um, I mentioned the gas planning docket that we're involved in at the Public Utilities Commission. Um, one of the things that the commission will be considering is, uh, we hope, like distribution system planning, uh, and that often includes maps. Um, so I think, uh, it's going to be something that will develop, uh, over time and that it started to roll out in, in other states where there's some mapping. Um, I think that looking. Jumping ahead to, uh, the impact on the electric system that these changes on the gas system and heating, uh, will have, uh, it's going to be really important to have maps about both our electric distribution system and our natural gas distribution system. Uh, and, and really use those layers to identify, for example, like an, uh, a feeder on the electric side that has a lot of capacity, uh, available. Uh, and then, you know, if that neighborhood, if the neighborhood where that feeder exists also is due for a pipe replacement, for example, that maybe that would be a great place to start electrifying, uh, in a managed kind of clustered way. Um, some I think maps are going to become, uh, more and more important as we, as we go along this, uh, energy transition journey.

Isak Kvam: [01:04:39] Makes sense. I think we have one time for one more question here. This one I anticipate will be a little shorter, but, uh, Mark H. Is wondering where Minnesota's gas comes from and specifically which states we tend to import the most from and where those interstate pipelines run that bring them into Minnesota.

Joe Dammel: [01:04:57] Yeah, that is a great question. I mentioned kind of the I think the big states, uh, Texas, Texas and Oklahoma, uh, uh, North Dakota, parts of Canada, um, and those, the pipelines, uh, naturally flow from the production areas to, uh, the delivery areas, like, like, like Minnesota. Um, so we and I should also note that the, you know, the, a gas utility, uh, is a customer on those interstate pipeline systems. They're buying gas from the producers. And the interstate pipeline system is just the kind of the tollway that is used to deliver that gas. Um, so it comes from a variety of states and even different countries. Um, and the path to get here is over the interstate pipeline system.

Isak Kvam: [01:05:49] Gotcha. Okay, well, I think it's 12:36. I think we still have questions, but I think for now we should maybe wrap it up. I want to thank everyone for joining us today. As Jo mentioned at the beginning of the webinar, we will be sending out a recording of today's webinar so you can watch it again later. There's a lot to dig into, so I know I will be rewatching it again. Um, and I'd like to thank you, Joe, for leading us through all of this and helping us understand a lot more about the gas system.

Jo Olson: [01:06:16] Thank you for tuning in to the audio recording of our webinar. You can stay up to date on Fresh Energy's work at Fresh-Energy.org or follow us on social media. Thank you to everyone listening for subscribing to our podcast. And you can support Fresh Energy's work by making a donation today. Head to our website, which once again is Fresh-Energy.org and click donate in the upper right corner. And now our new closing theme music credit to Palm Psalm. Thanks for tuning in.