Guidelines for clockspeed acceleration in the US natural gas transmission industry

Abstract

This study presents the clockspeed analysis of a peer group comprising six major integrated US energy companies with substantial US interstate natural gas pipeline business activities: El Paso, Williams, NiSource, Kinder Morgan, MidAmerican and CMS Energy. For this peer group, the three clockspeed accelerators have been benchmarked at both corporate level and gas transmission business level, using time-series analysis and cross-sectional analysis over a 6-year period (2002–2007). The results are visualized in so-called clockspeed radargraphs. Overall corporate clockspeed winners – over the performance period studied – are: Williams, El Paso and Kinder Morgan; MidAmerican is a close follower. Corporate clockspeed laggards are: CMS Energy and NiSource. The peer group ranking for the natural gas transmission business segment shows similar clockspeed winners, but with different ranking in the following order: Kinder Morgan, MidAmerican and El Paso; Williams is a close follower. Clockspeed laggards for the natural gas transmission segments coincide with the corporate clockspeed laggards of the peer group: CMS Energy and NiSource (over the performance period studied); laggards of the past may become clockspeed leaders of the future if adjustments are made. Practical recommendations are formulated for achieving competitive clockspeed optimization in the US gas transmission industry as a whole. Recommendations for clockspeed acceleration at individual companies are also given. Although the US natural gas market is subject to specific regulations and its own geographical dynamics, this study also provides hints for improving the competitive clockspeed performance of gas transmission companies elsewhere, in other world regions.