GTI continues to redefine itself: Q&A profile—Carroll replaces Riordan

Pipeline & Gas Journal, July, 2006 by Jeff Share

Few organizations have undergone as much change in recent years as has Gas Technology Institute (GTI), the hybrid product of the combination of Gas Research Institute and the Institute of Gas Technology in 2000. Once supported by fees collected under the Federal Energy Regulatory Commission (FERC) as a surcharge on interstate natural gas sales, GTI's revenue model has changed, and the organization has worked hard to win new business and expand its customer base in the competitive marketplace.

Is GTI going to be an entity that is driven by engineering, marketing, or some combination of the two? More importantly, what is in store for its future? Long-time energy executive John Riordan recently retired as CEO after leading GTI's restructuring. He has been replaced by Acting President David C. Carroll, who discussed GTI's prospects in an interview with P&GJ.

Carroll joined GTI in 2001 as vice president of business development, in charge of expanding the customer base and increasing revenues from product and service offerings. He helped to triple GTI's rate of new business acquisitions over a three-year period, doubling market share in the core natural gas segment as well as penetrating new markets. He has a BS degree in chemical engineering from the University of Pittsburgh and an MBA from Lehigh University.

P&GJ: How would you describe GTI today, including its mission? Is it one of being a marketer vs. engineering?

Carroll: GTI is a professional services provider, and our primary service is technology development. We offer contract research, technical services, collaborative RD&D programs, and industry training and education.

We focus on key issues of the North American natural gas market:

* Supply adequacy and independence

* Safety, pipeline integrity, cost and efficiency of operations

* End-use application affordability and efficiency Since 1941, research by expert GTI staff in state-of-the-art laboratories has led to nearly 500 products and more than 1,000 patents--results with bottomline impact. GTI has also trained more than 55,000 energy professionals. Our main facility, located in Des Plaines, IL, is on an 18-acre campus with 28 specialized laboratories and facilities and more than 200,000 square feet of laboratory space.

We market (sell) our services to a variety of customers in the natural gas industry, federal and state governments, and private industry. As a not-for-profit research institution, much of our research effort is designed to provide public benefits to energy consumers.

P&GJ: Do you foresee any alteration in GTI's mission?

Carroll: Moving forward, we will remain committed to providing solutions that address the needs of the energy industry and its consumers. GTI programs will continue to highlight four principal goals: expanded energy supply, reduced energy delivery costs, efficient energy use, and clean energy systems.

Overall, we will shift our focus from doing good R&D to effecting positive outcomes in the marketplace. That means that our research results in products and processes that are being put to use every day, creating value for companies and consumers.

P&GJ: Who are GTI's customers? Several years ago, R&D on gas utility operations was a major part of the portfolio. Is this still true?

Carroll: Gas distribution utilities remain a very important part of GTI's business portfolio. We provide research and education services to more than 40 utilities among the 200 customers that we serve annually. While our business changes from year to year, depending on customers' requirements and our ability to capture the business, our portfolio is approximately 1/3 gas industry, primarily LDCs; 1/3 U.S. Department of Energy; and 1/3 other clients, including private industry, state and federal governments.

P&GJ: What is GTI's biggest challenge in securing a permanent future for itself?

Carroll: GTI's biggest challenge is keeping our finger on the pulse of the marketplace and constantly calibrating our portfolio to meet market needs. Technology, by nature, is fundamentally uncertain and risky, and a business case must be made to highlight potential rewards and justify the cost of R&D.

Stakeholders are often primarily interested in near-term results, which makes it difficult to sustain long-term support. GTI strives to provide visionary thinking to fund the research and development of tomorrow's cost-saving technologies. An investment in long-term R&D will help secure an economic, sustainable, reliable, and clean energy future for our nation.

As with most companies, both for-profit and not-for-profit, GTI must compete in the marketplace for the opportunity to provide technology services to clients. Leveraging our industry expertise, relationships, and past results will help to position us as an unparalleled resource. A critical contributor to our success will be making productive investments in resources--the people and facilities--that can deliver value to clients in a sustainable way.

P&GJ: Is the funding mechanism resolved, and how will it work?