Inergy, which had its start in the propane industry, diversified into the midstream business with its 2005 purchase of the Stagecoach natural gas storage facility in Tioga County, New York. Since the Stagecoach acquisition, Inergy has grown both organically and through additional acquisitions to become the largest independent natural gas storage operator in the U.S.

Heading up operations for Inergy's midstream business is William Moler, who joined Inergy in July 2004. Prior to Inergy, Moler was general manager of marketing and transportation services for Westport Resources Corp. and general manager for Westport Field Services LLC, based in Denver, Colorado.

Before those positions, Moler held various leadership positions at Kinder Morgan Inc. including director of business development and business unit operations in KMEP's gathering and processing segment, director of engineering, project management, technical services and facility planning (for all natural gas related assets). In addition, he spent two years working for Natural Gas Pipeline Co.'s regulatory group in strategic planning.

He has been a member of the Interstate Natural Gas Association, the Gas Processors Association, the Independent Petroleum Association of Mountain States and the American Society of Mechanical Engineers. Bill holds a bachelor's of science degree in mechanical engineering from Texas Tech University.

MIDSTREAM: How would you define the state of northeastern infrastructure?

MOLER As evidenced by all of the planned and ongoing expansion projects, such as our own Marc I and North-South Project, and El Paso-Tennessee Gas Pipeline's 300-Line Expansion, Equitable Midstream's transmission line expansion, and William Cos.-Transco's Millennium expansion, it's clear that the Marcellus shale play has altered the way the Northeast gas dynamic functions. People are investing time, capital and labor into improving infrastructure to handle this new gas supply.

MIDSTREAM: How does the Marcellus affect Inergy's operations?

MOLER: When we started in the Northeast in 2005 with the Stagecoach storage facility acquisition, it was a 13 billion cubic feet working gas storage facility. At the time, no one knew the Marcellus would be as productive as it has proven to be. As much as I would like to say that we knew we were directly on top of the Marcellus—we didn't. It was fortunate happenstance. But since the Marcellus has become so prolific, we have expanded the Stagecoach facility to 26 billion cubic feet and connected it to the Millennium pipeline. We acquired the pipeline going south to the Tennessee Gas pipeline, and have announced several other transportation-related projects. Instead of being a singular storage-asset operator, we have worked very hard to become a natural gas transportation and storage midstream player.

MIDSTREAM: Does the Northeast market continue to need flexibility?

MOLER: Yes. Inergy owns and operates the single closest storage assets to the Northeast market, which is one of the largest demand centers in the world. Because we are independent, and not a long-haul pipeline from Texas to the Northeast, we have the ability to interconnect to all of the key pipes going through the Northeast, and provide services that a long-haul integrated player can't. For example, Stagecoach is a multi-cycle, highdeliverability storage facility, so our shippers can inject on Monday and withdraw on Tuesday. There is no seasonality to our storage services. In fact, it is not uncommon for us to be on withdrawal during peak load periods from 8:00 am to 4:00 pm, and that evening be on injection. We can turn the facility around almost instantaneously. Our customers, including the major local distribution companies in the Northeast as well as gas marketers, need and want that flexibility.

MIDSTREAM: What is the status of the Marc I project?

MOLER: The project plans are for the Marc I, a 39-mile, 30-inch diameter pipeline, to connect the Tennessee Gas Pipeline Station 319 down to Transco's Leidy line in Lycoming County, Pennsylvania. That pipeline is expected to connect to our North-South Project terminating at Stagecoach. Ultimately, Marc I will provide a diversity of supply for our local distribution clients and allow integration of their transportation positions on Transco, Tennessee and Millennium pipelines. Marc I also creates a hub through what has yet been untapped reserves of Marcellus production. That pipeline is designed for a maximum capacity of 550,000 dekatherms per day.

MIDSTREAM: Are there challenges to getting all that built?

MOLER: There always are. The Federal Energy Regulatory Commission (FERC) has been permitting pipelineAprojects for a long time through what is a very rigid and structured process that incorporates other regulatory agencies like the Department of Transportation and the state agencies like Fish and Wildlife, Corps of Engineers, Pennsylvania Department of Environmental Protection and the Fish and Boat Game Commission, among others. Like other companies, we put our plans in front of and comply with every agency for review, comments and alterations, so we end up with the most environmentally sensitive and mitigative project possible.

MIDSTREAM: But the public doesn't always know that.

MOLER: Right. There are some people in the Northeast who don't care to see any infrastructure development. So our project can be targeted as a venue of opportunity to get their statements out into the public eye. We've had to deal with that, and we have done so fairly and judiciously. We've met with them to assuage their concerns, but some folks will always be strongly and squarely against fossilfuel and related infrastructure development.

MIDSTREAM: That must be frustrating.

MOLER: It is. Shale opportunities should give the country an ability to become more energy independent. If the industry does it properly and works with the environmental groups to ensure we do tap this resource in the most sensitive manner possible, it shouldn't be an issue. Educating people about infrastructure development requires knowledgeable teachers and willing learners. In some instances, it can be hard to find the willing learners. But supporters are out there and they are generally the directly impacted landowners. Most of the organized opposition comes from groups without a direct interest. They can help improve the process and we as an industry should always listen and be willing to reform where it makes sense.

MIDSTREAM: Do you think the Utica shale will be a good fit for your assets?

MOLER: Our NGL business, which operates as Inergy Services, sees some real opportunities in the Utica. The Utica development is just beginning in Ohio. There is Utica shale under the Marcellus or incorporated with it, which has not yet been tested. We are in a wait-and-see position relative to that. We think there may be some opportunities for Inergy Services to participate in the natural gas liquids activity that could come out of the Utica shale.

MIDSTREAM What kind of natural gas liquids opportunities are there?

MOLER: Inergy Services provides producer services for liquids transportation, storage, fractionation and marketing. In some instances Inergy Services enters into 'keepdry' agreements with operators of gas processing plants whereby Inergy agrees to take 100% of the liquids from a plant and markets them. Inergy Services participates in this type of business in the Marcellus production area and we expect to duplicate that in the Utica shale footprint.

MIDSTREAM Do you think the U.S. will export liquefied natural gas (LNG)?

MOLER: Through technological improvements, producers have provided access to these brand new sources of very large gas reserves and are making gas more of a global commodity. Similar to crude oil, the technology is now at a point where natural gas can be exported via liquefaction and ship transport. I know there have been discussions in South Texas about the Eagle Ford shale, and that Freeport, Sabine and other LNG import facilities are considering export licenses. It could happen where there is a large supply basin, such as the Eagle Ford, without a large market to take it. I think liquefaction and export of abundant supply would happen in the South first.

MIDSTREAM: What about in the Northeast?

MOLER: For the Northeast, I think it would be a shame if we exported it. I'd rather see New York City switch from fuel oil to gas, and see coal-fired power plants convert to natural gas. A demand market in the Northeast could be created to consume the Marcellus production and I think that would be much more beneficial from job-creation, economy-growing and environmental perspectives. There are few things that would improve the environment more than changing out coal plants and reducing the use of fuel oil.

MIDSTREAM: Do you think the U.S. could become a gas storage provider for Europe?

MOLER: I don't know that we would get into the development of LNG facilities. However, we could become involved due to the locations of our assets, their proximity to the markets, and the potential to use Inergy storage facilities for swinging LNG. That is especially true for our Tres Palacios facility in Matagorda County, Texas, which is right in the middle of several LNG import facilities that could become export facilities.