How important is Customer Service to Natural Gas Pipelines?

Pipeline companies don’t care about customer service – unless it can make them a buck. That’s a bold statement any way you look at it. I would hasten to say that any pipeline company worth its salt would strongly disagree with it. Yet how many people could say that they’ve never heard that before? In my opinion, it depends on your definition of customer service. It’s one thing to complain about a pipeline just because they don’t do things your way – or resolve an issue to your complete satisfaction. However, do those people who complain try to look at the other side of the issue? Pipeline companies spend a lot of time trying to make sure they treat everyone consistently. Now, the amount of time and energy each pipeline spends is another matter.

Customer satisfaction surveys show that different types of pipelines value customer service at different levels. It seems that interstate pipelines care more about keeping their customers happy than do midstream and intrastate pipelines. At least that’s what the customer satisfaction surveys show. Certain interstate pipelines take great pride in touting their rankings that come out each year. However, midstream companies seem to still have a lot of work to do. EnergyPoint Research’s latest Customer Satisfaction Survey of the midstream sector shows that the overall rankings of the industry as it relates to customer satisfaction leaves something to be desired. On a scale of one to ten, the mean rating of the sector stands at 6.46. That’s right around the rating of the Internal Revenue Service. Doug Sheridan, founder and managing director of EnergyPoint Research, the Houston-based firm states “Providers of unregulated gas gathering and intrastate transportation services clearly have plenty of room for improvement when it comes to customer satisfaction. The group’s aggregate ratings are some of the lowest EnergyPoint has collected since we began conducting our surveys in the oil patch in 2003.”

The question remains as to why these ratings are so low. Compared to interstate pipelines, could it be that the big interstates are backed by rate bases that allow for the expense of keeping customers happy? After all, with a guaranteed margin and the ability to recover these costs in rates, wouldn’t it be wise to make sure that business systems and processes took the extra step to develop more bend-over-backward functionality? The midstream sector doesn’t have that luxury. The money they spend on improving systems for the benefit of their customers is a direct expense. Now that doesn’t justify a non-caring attitude, but it could certainly figure into the equation when coming up with a budget. Disregarding customer service will come back to haunt you in the end, but can a company be faulted for dividing the budget pie a little unevenly – and allocating more to immediate revenue generating projects?

Secondly, could it maybe be the perception of the customers themselves? I would venture a guess and say that an average producer or marketer views interstate pipelines as a basic requirement, much like interstate highways. They are necessary to move product, and a producer or marketer certainly would not think of building a pipeline to a major downstream market on their own. However, when it comes to the midstream sector, they are often viewed as necessary evils standing between the wellhead production and the mainline pipes. In fact, many assume that if they did not have more important designations for their dollars – like drilling for production, they would build their own midstream facilities.

With that type of attitude on behalf of many of their customers, can midstream pipelines ever catch a break when it comes to customer satisfaction? Maybe not. But focusing a little more on efficient business systems, business processes, and giving consistent and detailed data to their customers could only help. Certainly enough to be thought of in a kinder sense than the IRS.

Robert W. Young