The head of Tulsa-based Williams Companies, Inc. maintains demand for natural gas is strong despite the growth in renewable energy in the U.S. He also believes New York will reverse its opposition to a pipeline to bring natural gas to New York City.
Speaking this week at the JP Morgan Virtual Energy, Power and Renewables conference, Chief Executive Officer Alan Armstrong told potential investors, ” business continues to click away on a very stable basis….everything is going extremely well across the business and our financials are showing.”
He said the company has not had any liability issues related to the COVID-19 pandemic, adding that for the most part, the systems and even production by Williams “has been better—held up better than we would have expected.”
The big driver for the company is demand for natural gas, something Armstrong doesn’t see weakening in the future.
“And you can see here still very healthy growth on natural gas demand higher than coming in three times higher than oil. So there is a reason we remain focused on that even with the low oil prices, gas remains much lower on a Btu basis. And obviously, it’s cleaner and we are going to continue to see a strong demand for natural gas.”
Armstrong says natural gas continues to make huge inroads into the electric market space and it has come at the expense of coal.
“—despite tremendous investment and very sizeable subsidies being invested in wind and solar business, you can see it really isn’t making that much of a difference on an absolute basis. And that it really is natural gas that is continuing to gain market share on power generation,” he added.
Armstrong told the conference natural gas continues to grab by far the largest portion of the market share despite reports that renewables had overtaken coal.
“But the notion that they are somehow taking market share away from natural gas right now it’s really just not accurate when you look at facts and we think that gas is going to continue to enjoy that,” he said.
“And it will continue and we’re certainly not opposed to renewables continuing to come in fact, we’re very supportive of renewables continuing to come into market and we’ll take advantage of those where they make sense for ourselves.”
As for the operational side of things, Williams’ three pipelines are 100% contracted, according to Armstrong. The company also reduced its workforce by 8% in the past year which reduced costs by $100 million and helped drive profits.
Despite being rejected by New York State on a pipeline expansion to transport natural gas to New York City, Armstrong predicts there will eventually be a turnaround in the effort.
“So things are going well, really no hiccups, obviously, NESE (Northeast Supply Enhancement) was a disappointment to us. And frankly, we think that’s a very serious mistake by both the city and state there. But we have a feeling that may come back around but I can tell you as far as we’re concerned right now, we have shut down efforts on that project.”
Click here for entire transcript of presentation.
Source: Seeking Alpha