Page 15 - Oil and Energy January 2013

January 2013 • 15
CLF recommends a number of policy
options be pursued to increase public
safety while cost-effectively and expedi-
tiously reducing greenhouse gas emissions
from natural gas distribution pipelines.
In the paper, CLF outlines five policy
options: establishing leak classifica-
tion and repair timelines; limiting cost
recovery for lost and unaccounted for gas;
expanding targeted infrastructure replace-
ment programs; changing service quality
standards; and enhancing monitoring
and reporting requirements. With these
policies, Massachusetts can foster the
repairs and pipe replacement necessary to
eliminate this threat to public safety and
the environment.
KEY FINDINGS
The report makes a number of key
findings, including:
• Massachusetts has programs that
aggressively promote energy efficiency,
but the losses of natural gas from the
distribution system are larger than the
savings from increased efficiency.
• The costs of these leaks – about $38.8
million a year – are passed on to gas
customers in Massachusetts.
• More reliable tools are needed for
accurately calculating the amount of
fugitive emissions.
• Current state and federal policies
provide disincentives for pipeline
owners to aggressively find and fix
leaks unless they are considered
hazardous.
• Building new transmission lines
and new gas generation promises to
be a costly endeavor; by contrast,
reducing leaks while increasing the
efficiency of existing infrastructure,
including gas storage, could provide
a more cost-effective, environmentally
beneficial means of meeting energy
needs.
• There are a number of policy solutions
that can be pursued cost-effectively and
expeditiously.
MORE FOCUS ON METHANE
The report states that the issue of
methane leakage from natural gas systems
is gaining more widespread attention
in the U.S. now that the Environmental
Protection Agency (EPA) has begun to
require mandatory reporting and regula-
tion of these emissions. It has been a
concern since at least 1993, however,
and voluntary and market mechanisms
have been developed on a national and
international scale. For example, the
Global Methane Initiative, which evolved
from the Methane to Markets Partnership,
and the EPA’s Natural Gas Star Program,
have been working cooperatively with the
U.S. oil and gas industry for two decades
to develop cost-effective technologies for
reducing methane emissions from every
stage of oil and gas development.
These programs have been primarily
focused on production and processing
stages and overlooked distribution, because
existing cost recovery mechanisms for
distribution companies negate the profit
incentives that exist for operators at the
production and processing level.
Massachusetts has no gas drilling, so the
state’s primary jurisdiction over methane
leaks lies with the intrastate distribution
pipelines that deliver natural gas from
transmission lines into homes, businesses
and institutions. The CLF study focuses
on opportunities to reduce emissions from
these distribution pipelines, which are
subject to oversight by the Massachusetts
Department of Public Utilities (DPU)
and the Massachusetts Department of
Environmental Protection (DEP).
LOSSES OFFSET EFFICIENCY GAINS
Massachusetts already has in place
aggressive energy efficiency programs. For
example, in 2010, Massachusetts natural
gas efficiency programs saved 1,097 million
cubic feet (MMcf) of natural gas. But in the
same time period, Massachusetts lost, at a
minimum, 1,725 MMcf through leaks on the
system. “We are losing more on the distribu-
tion than we are saving, and customers are
still paying for those losses,” the report states.
“Before we invest in costly new transmission
lines and other natural gas infrastructure, we
must address these avoidable system losses,
and we must increase the efficiency of the
existing system. Otherwise, we will continue
sending a valuable resource into thin air.”
The report includes an overview of
natural gas distribution in Massachusetts.
“There are eight investor owned and four
municipal gas distribution utilities also
known as local distribution companies
(LDCs), operating in Massachusetts. These
companies own over 21,000 miles of gas
main and 1 million services. Almost one-
third of the mains in Massachusetts are cast
iron or unprotected steel, materials that are
often referred to as “leak-prone” pipe.
Continued …
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