Page 16 - Oil and Energy January 2013

16 • OIL

&

ENERGY

Natural Gas Leaks

“These types of pipelines

are referred to as “leak-prone”

because according to EPA data

and company-specific data, they

tend to have a higher leakage

rate.” Recent regulations from

EPA indicate that cast iron and

unprotected steel result in far

greater emissions than either

protected steel or plastic pipe.

As a result, distribution systems

with large amounts of such

leak-prone pipe are likely to

experience equally large fugitive

emissions.

7,000 MILES OF

LEAK-PRONE PIPE

In Massachusetts as of

December 31, 2010, these

leak-prone pipes accounted for

almost 7,000 miles, over 30% of

the entire distribution system,

the report states. Under current

regulations, decisions about

whether to repair or replace

leaking pipelines are prioritized

based on whether the particular

leak or segment of pipeline

poses an immediate risk to

public safety, and neither the

Department of Public Utilities

nor the utilities take into

account impacts on greenhouse

gas emissions or other environ-

mental factors.

The report notes that federal

and state regulations governing

pipeline safety simply require

that “hazardous” leaks be

repaired “promptly.” As a result,

leaks that persist for years may

be left unrepaired so long as

they remain “non-hazardous.”

In addition, although it may be

cost effective to repair or replace

a pipeline, the rate of return may

not be competitive with other

types of capital investments the

company could choose.

”Although utilities are

allowed to recover the costs

of replacing pipeline, under

traditional rate regulation that

recovery does not occur until

the filing of a rate case, which

can force the company to carry

the costs. This can also create a

disincentive for a utility to invest

aggressively in replacement of

pipes that may be leaking but

are not necessarily considered

hazardous,” the report states.

The report explains that

LDCs can pass costs for lost

gas onto consumers, essentially

eliminating “any incentive to

repair leaks unless the leak is

considered hazardous. As a

result, leaks that contribute to

climate change may remain on

the system indefinitely unless

circumstances change such that

the leak becomes considered

hazardous.”

CLIMATE CHANGE IMPACT

The report also explores the

potential effects of natural gas

(methane) on global climate

change.Methaneis“anextremely

potent greenhouse gas” whose

effects are understated in many

reports, according to CLF. The

report explains that the global

warming potential (GWP) of

methane emissions is “signifi-

cantly higher” than is widely

reported. Groups like the EPA

use the estimate that methane

has only 21 times the GWP of

carbon dioxide, when the real

impact is actually three to five

times that high over 20 years.

Not only is methane more

damaging than reported, but

natural gas distribution systems

in Massachusetts lose more

gas than the official estimates

suggest, according to the CLF

report. Reports filedwith the state

Department of Environmental

Protection (DEP) indicate that

2012 fugitive emissions from

distribution pipelines amounted

to roughly 700,000 tons of CO

2

equivalent (CO

2

e). “However,

this number is dwarfed if esti-

mates are based insteadon the lost

and unaccounted for gas (LAUF)

reports filed by the LDCs,”

the report states. “The fugitive

emissions reported under that

methodology amount to almost

3.6 million tons of CO

2

e—over

five times the emissions, and

4.2% of the Massachusetts total

greenhouse gas inventory.” From

a pure cost analysis, using an

average of $4.30/Mcf, these losses

cost ratepayers $38.8 million

annually, the report states.

Artwork created by KyricAvery ofAvery Designs