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Improvements Needed in 

EPA Efforts to Address

Methane Emissions From

Natural Gas Distribution 

Pipelines

Report No. 14-P-0324 July 25, 2014

U.S. ENVIRONMENTAL PROTECTION AGENCY

OFFICE OF INSPECTOR GENERAL
This is one of the U.S. Environmental Protection Agency Office of Inspector General’s 

products associated with climate change. For details on our other reports on climate 

change, go to http://www.epa.gov/oig/climatechange. 

Report Contributors: Rick Beusse Erica Hauck 

Kevin Good Richard Jones

Abbreviations

CAA Clean Air Act

CO2e Carbon dioxide equivalent

EDF Environmental Defense Fund

EF Emission factor

EPA U.S. Environmental Protection Agency

GHG Greenhouse gas

GHGRP Greenhouse Gas Reporting Program

GRI Gas Research Institute

GTI Gas Technology Institute

LDC Local distribution company

MMT Million metric tons

NESHAP National Emission Standards for Hazardous Air Pollutants

NSPS New Source Performance Standards

OAR Office of Air and Radiation

OIG Office of Inspector General

PHMSA Pipeline and Hazardous Materials Safety Administration

PSD Prevention of Significant Deterioration

PUC Public utility commission

SCF Standard cubic feet

TPY Tons per year

Cover photo: Damaged natural gas distribution pipeline. (U.S. Department of Transportation photo) 

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EPA Inspector General 

1200 Pennsylvania Avenue, NW

Mailcode 2410T

Washington, DC 20460
 

 14-P-0324

July 25, 2014

Why We Did This Review

We conducted this evaluation 

to determine what actions the

U.S. Environmental Protection 

Agency (EPA) has taken to 

reduce methane emissions 

from leaking pipelines in the 

natural gas distribution sector.

Methane is a potent

greenhouse gas with a global 

warming potential 25 times that 

of carbon dioxide. In June 

2013, President Obama issued 

the Climate Action Plan, which

states that “curbing emissions 

of methane is critical to our 

overall effort to address global 

climate change.” In 2012, the 

EPA reported that methane 

leaks from pipelines in the 

natural gas distribution sector 

accounted for more than

13 million metric tons of carbon 

dioxide equivalent emissions.

These leaks are comprised of 

natural gas product, which is 

almost 100 percent methane,

and account for more than

10 percent of total methane 

emissions from natural gas 

systems.

This report addresses the 

following EPA goal or 

cross-agency strategy:

 Addressing climate change 

and improving air quality.

For further information, 

contact our public affairs office 

at (202) 566-2391.

The full report is at:

www.epa.gov/oig/reports/2014/ 

20140725-14-P-0324.pdf

 

Improvements Needed in EPA Efforts 

to Address Methane Emissions From 

Natural Gas Distribution Pipelines

 What We Found

The EPA has placed little focus and 

attention on reducing methane emissions 

from pipelines in the natural gas 

distribution sector. In 2012, the EPA stated 

its intent to continue to evaluate the 

appropriateness of regulating methane. 

The 2013 Climate Action Plan calls for the 

EPA, in conjunction with other federal 

agencies, to develop a comprehensive 

interagency strategy to address methane emissions. The EPA does not currently 

regulate methane emissions from the distribution sector and has not partnered 

with the Pipeline and Hazardous Materials Safety Administration, which regulates 

pipeline safety, to control methane leaks. The EPA has a voluntary program to

address methane leaks—Natural Gas STAR—but its efforts through this program 

have resulted in limited reductions of methane emissions from distribution 

pipelines. This is due largely to financial and policy barriers, including 

disincentives for distribution companies to repair nonhazardous leaks.

The agency needs to address additional issues to better assess progress from 

the voluntary program and determine if future regulations are warranted. The

EPA needs to set goals and track its progress in reducing emissions from 

distribution pipelines through its voluntary program. Also, the EPA needs to 

evaluate data from ongoing external studies to determine their usefulness for 

validating or updating its distribution pipeline emission factors. The emission 

factors that the EPA uses are based on a 1996 study, which has a high level of 

uncertainty. Two non-EPA groups are conducting studies that may be useful to 

the EPA. However, the EPA’s involvement in the design or protocols of these 

studies has been limited.

 Recommendations and Planned Corrective Actions

We recommend that the EPA (1) work with the Pipeline and Hazardous Materials 

Safety Administration to address methane leaks from a combined environmental 

and safety standpoint, (2) develop a strategy to address the financial and policy 

barriers that hinder reductions from the distribution sector, (3) establish 

performance goals, (4) track distribution sector emissions and use that data to 

help determine if future regulation would be appropriate, and (5) assess whether 

data from ongoing studies should be used to update distribution sector emission 

factors. The agency agreed with recommendations 1 and 2 and provided 

corrective action plans that meet the intent of the recommendations. The agency 

partially agreed with recommendations 3, 4 and 5 and these three 

recommendations are considered unresolved.

U.S. Environmental Protection Agency

Office of Inspector General

At a Glance

Methane emissions impact climate 

change through leaks in natural 

gas distribution pipelines, and also 

have economic impacts. We

estimate that more than 

$192 million in natural gas was lost 

in 2011 due to such leaks, a cost 

that is borne by consumers.
July 25, 2014

MEMORANDUM

SUBJECT: Improvements Needed in EPA Efforts to Address Methane Emissions From

Natural Gas Distribution Pipelines

Report No. 14-P-0324

FROM: Arthur A. Elkins Jr.

TO: Janet McCabe, Acting Assistant Administrator

Office of Air and Radiation

This is our report on the subject evaluation conducted by the Office of Inspector General (OIG) of the 

U.S. Environmental Protection Agency (EPA). This report contains findings that describe the problems 

the OIG has identified and corrective actions the OIG recommends. This report represents the opinion of 

the OIG and does not necessarily represent the final EPA position. Final determinations on matters in 

this report will be made by EPA managers in accordance with established audit resolution procedures.

The EPA offices having primary responsibility over the issues evaluated in this report are the Office of 

Air and Radiation’s Office of Atmospheric Programs and Office of Air Quality Planning and Standards. 

Action Required

Recommendations 1 and 2 are resolved; therefore no further response is needed for these 

recommendations. In accordance with EPA Manual 2750, for recommendations 3, 4 and 5, for which the 

agency only partially concurred, you are required to provide a written response to this report within 

60 calendar days. You should include planned corrective actions and completion dates for these 

unresolved recommendations. Your complete response will be posted on the OIG’s public website, 

along with our memorandum commenting on your response. Your response should be provided as an 

Adobe PDF file that complies with the accessibility requirements of Section 508 of the Rehabilitation 

Act of 1973, as amended. The final response should not contain data that you do not want to be released 

to the public; if your response contains such data, you should identify the data for redaction or removal 

along with corresponding justification. 

We will post this report to our website at http://www.epa.gov/oig. 

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

WASHINGTON, D.C. 20460

THE INSPECTOR GENERAL
Improvements Needed in EPA Efforts to Address 14-P-0324

Methane Emissions From Natural Gas Distribution Pipelines

Table of Contents

Chapters

1 Introduction ...................................................................................................... 1

Purpose ..................................................................................................... 1

Background................................................................................................ 1

Scope and Methodology ............................................................................ 7

2 EPA Does Not Regulate Methane Emissions From Distribution

Pipelines and Voluntary Efforts Have Achieved Limited Reductions........... 9 

Methane Emissions From Natural Gas Distribution Pipelines 

 Not Currently Regulated by EPA ........................................................ 9

No Local Distribution Companies Have Obtained 

 GHG Permits From EPA ...................................................................... 10

EPA Has Not Partnered With PHMSA to Control Methane Leaks .............. 11

EPA’s Voluntary Program Has Achieved Limited Emission 

 Reductions From Natural Gas Distribution Pipelines ........................... 12

Financial and Policy Barriers Hinder Methane Emission

 Reductions From the Distribution Sector............................................. 13

Conclusions ............................................................................................... 14

Recommendations..................................................................................... 14

Agency Comments and OIG Evaluation..................................................... 15

3 EPA’s Methane Emissions Data for Natural Gas Distribution 

Pipelines Need to Be Improved ....................................................................... 17 

EPA Uses Emission Factors to Estimate Methane Emissions.................... 17

Validity of EPA’s Emission Factors for Distribution Pipelines Uncertain ..... 18

EPA Has Not Comprehensively Re-Evaluated Its

 Natural Gas Distribution Pipeline Emission Factors............................. 22

Conclusions ............................................................................................... 24

Recommendation....................................................................................... 24

Agency Comments and OIG Evaluation..................................................... 24

Status of Recommendations and Potential Monetary Benefits ............................. 26 

Appendices

A Agency Response to Draft Report................................................................... 27

B Distribution ....................................................................................................... 32
14-P-0324 1

Chapter 1

Introduction

Purpose 

We conducted this evaluation to determine what actions the U.S. Environmental 

Protection Agency (EPA) has taken to reduce methane emissions from leaking 

pipelines in the natural gas distribution sector.

Background

Methane is a potent greenhouse gas (GHG). It has a global warming potential 

25 times that of carbon dioxide. In addition to contributing to global climate 

change, methane emissions also worsen ground-level ozone problems and can kill 

trees and other vegetation. Emissions from leaks in natural gas distribution 

pipelines are comprised almost entirely of methane.

In June 2013, President Obama issued the Climate Action Plan, a broad-based 

plan to cut GHG pollution that causes climate change and affects public health. 

Among other things, the Climate Action Plan emphasizes that:

Curbing emissions of methane is critical to our overall effort to 

address global climate change. Methane currently accounts for 

roughly 9 percent of domestic greenhouse gas emissions and has a 

global warming potential that is more than 20 times1greater than 

carbon dioxide.

The Climate Action Plan calls for the EPA, in conjunction with several other 

agencies, to develop a comprehensive interagency methane strategy. This strategy 

(hereafter referred to as the 2014 interagency methane strategy) was issued in 

March 2014.

2 The strategy focuses on cutting methane emissions primarily from 

landfills, coal mines, agriculture, and the oil and natural gas industry. It calls for 

the EPA to:

 Develop a series of white papers on significant sources of methane 

emissions in the oil and natural gas industry, and solicit input from 

independent experts.

 Based on information from the white papers, determine what, if any,

regulatory authorities the agency will apply to selected emission sources in 

the oil and natural gas industry.

 

1

In November 2013, the EPA amended its global warming potential for methane from 21 to 25 times that of carbon 

dioxide. The EPA made this change to align with the global warming potential for methane that was included in the 

Intergovernmental Panel on Climate Change’s Fourth Assessment Report, which was issued in 2007.

2 Climate Action Plan: Strategy to Reduce Methane Emissions, March 2014.
14-P-0324 2

 Bolster its Natural Gas STAR program—a voluntary program to reduce 

methane emissions from the natural gas industry—by eliciting more robust 

industry commitments and enhancing transparency and accountability.

 Continue to enhance its inventory of GHG emissions, particularly for the 

natural gas industry.

Our evaluation focused on methane emissions from pipelines in the distribution 

sector of the natural gas industry. This includes distribution mains3and service 

lines that transmit natural gas from the city gate4to the end customer. Figure 1 

shows how natural gas moves from production wells through transmission lines to 

the city gate and, ultimately, to residential and commercial customers. By the time 

natural gas reaches the distribution sector, almost all pollutants and impurities 

have been removed. At this point it is almost 100-percent methane.

Figure 1: Natural gas industry, from production through distribution

 

Source: The EPA.

a Service lines are the lines from the distribution mains to the residential, commercial and industrial customers.

 

3 A main is a major pipeline conveying gas to smaller pipes, known as service lines or services, for distribution to 

residential, commercial and industrial consumers.

4 A city gate is the delivery point where the natural gas is transferred from a transmission pipeline to the local gas 

utility (called the local distribution company).
14-P-0324 3

Methane Emissions From Distribution Pipelines

In 2012, the EPA reported that the total methane emissions from natural gas systems 

were 129.9 million metric tons (MMT) of carbon dioxide equivalent (CO2e)

emissions. Of this, more than 13 MMT CO2e were attributed to emissions from 

distribution pipelines. This represents more than 10 percent of total methane 

emissions from natural gas systems.

Emissions from distribution pipelines occur due to leaks. Leaks are most likely to 

occur from older pipelines made of cast iron and unprotected steel. These leaks 

are caused by disturbances resulting from earth movement, the breakdown of 

joints, and corrosion of unprotected steel pipelines; and from the natural process 

of “graphitization” of iron pipelines. Graphitization is the process of iron 

degrading over time to softer elements. This process makes iron pipelines more 

prone to cracking. Leaks are much less likely to occur from plastic and protected 

steel pipelines.

In 2012, there were more than 1.2 million miles of distribution mains in the 

United States. Of this, more than 32,000 miles of mains were cast iron or wrought 

iron, and more than 61,000 miles were unprotected steel.

The amount of cast and wrought iron, and unprotected steel, pipeline varies 

substantially by state. For example, in 2012, New Jersey had at least 5,000 miles 

of cast and wrought iron mains while 16 other states had none. Table 1 shows the 

miles of cast and wrought iron pipelines (specifically, distribution mains) in the 

10 states with the highest levels of these pipelines. These 10 states accounted for 

about 82 percent of the cast and wrought iron mains in 2012. 

Table 1: Ten states with highest miles of cast and wrought iron natural gas 

distribution mains, 2012

State

Miles of 

distribution mains 

Percentage of 

distribution mains

in state

Miles of 

distribution mains 

as a percentage of 

nationwide total

New Jersey 5,044 15% 15.6%

New York 4,417 9% 13.6%

Massachusetts 3,792 18% 11.7%

Pennsylvania 3,221 7% 9.9%

Michigan 3,101 5% 9.6%

Illinois 1,744 3% 5.4%

Connecticut 1,467 19% 4.5%

Maryland 1,399 10% 4.3%

Alabama 1,383 5% 4.3%

Missouri 1,113 4% 3.4%

Total 26,681 82.3%

Source: Office of Inspector General (OIG) analysis of Pipeline and Hazardous Materials 

Safety Administration (PHMSA) data.
14-P-0324 4

In 2012, the miles of distribution mains made of unprotected steel ranged from a 

high of 9,044 miles in Ohio to zero miles in five states. Table 2 shows the miles 

of unprotected steel pipelines (specifically, distribution mains) in the 10 states 

with highest levels of unprotected steel pipelines. As shown in table 2, these 

10 states accounted for about 77 percent of the unprotected steel mains in 2012.

Table 2: Ten states with highest miles of unprotected steel natural gas distribution 

mains, 2012

State

Miles of 

distribution mains

Percentage of 

distribution mains

in state

Miles of 

distribution mains 

as a percentage of 

nationwide total

Ohio 9,044 16% 14.7%

Pennsylvania 8,086 17% 13.2%

New York 6,900 14% 11.3%

Texas 6,100 6% 9.9%

California 5,269 5% 8.6%

Kansas 3,487 16% 5.7%

West Virginia 2,963 28% 4.8%

Oklahoma 1,857 7% 3.0%

Massachusetts 1,780 8% 2.9%

New Jersey 1,708 5% 2.8%

Total 47,194 76.9%

Source: OIG analysis of PHMSA data.

As shown in tables 1 and 2, four states are among the 10 highest for both miles 

of cast and wrought iron as well as unprotected steel pipelines (Massachusetts, 

New Jersey, New York and Pennsylvania).

Aging Infrastructure Associated With Large Number of 

Methane Leaks From Urban Pipelines

A 2013 study identified more than 3,000 methane leaks believed to be from 

distribution pipelines in the city of Boston.5In the study, researchers used mobile 

detection equipment to identify leaks, determine the concentration of the leaks,

and map the leaks according to a specific location. The study concluded that the 

leaks were primarily from cast iron distribution mains, some of which were more 

than 100 years old. While the study was able to identify leaks and measure their 

concentration at a certain point in time, it did not measure the total amount of 

methane that was being emitted from the leaks. Therefore, the actual amount of 

methane released from these leaks is unknown. Figure 2 shows the leaks that were 

detected by the researchers in Boston, along with their corresponding 

concentrations.

 

5

"Mapping Urban Pipeline Leaks: Methane Leaks Across Boston," Environmental Pollution, 173 (2013) 1-4.
14-P-0324 5

Figure 2: Methane leaks in the city of Boston, shown as concentrations

(in parts per million)

Source: Reprinted from Environmental Pollution, Vol 173, Nathan G. Phillips et al., 

Mapping urban pipeline leaks: Methane leaks across Boston, 1-4, Copyright (2013), 

with permission from Elsevier.

Note: Methane leaks (3356 yellow spikes > 2.5 ppm) mapped on Boston’s 785 road 

miles (red) surveyed in this study. 

In a second study published in 2014 and conducted in Washington, D.C., 

researchers found results similar to the Boston study.

6 They identified more than

5,800 methane leaks in Washington. Like Boston, the researchers associated the 

high level of leaks in Washington with an aging cast iron pipeline infrastructure. 

Figure 3 shows detected leaks in a section of Washington, along with their 

corresponding concentrations.

 

6

"Natural Gas Pipelines Leaks Across Washington, D.C.," Environmental Science & Technology, 48(3), 2051-2058.
14-P-0324 6

Figure 3: Methane leaks in Washington, D.C., shown as concentrations 

(in parts per million)

Source: Reprinted with permission from Robert B. Jackson, et al., Natural Gas Pipeline 

Leaks Across Washington, DC, Environmental Science and Technology, 48(3), 2051–2058, 

Copyright (2014) American Chemical Society.

Note: A close-up of leaks near the U.S. Capitol Building showing high leak densities east of

the building but few leaks over the National Mall, where very few natural gas pipelines exist.

EPA Authority to Regulate Methane

The Supreme Court ruled in Massachusetts v. EPA (2007)7that GHGs are pollutants 

covered by the Clean Air Act (CAA), and that the EPA has the authority to regulate 

GHG emissions from new motor vehicles under Section 202(a)(1) of the Act. The 

court also instructed the EPA to determine, in accordance with provisions in the Act,

whether emissions of GHGs from new motor vehicles cause or contribute to air 

pollution, which may reasonably be anticipated to endanger public health or welfare, 

or provide a reasonable explanation why it could not reach a decision.

In 2009, the EPA issued the Endangerment and Cause or Contribute Findings for 

Greenhouse Gases under Section 202(a) of the CAA (often referred to as the 

Endangerment Finding). Specifically, the EPA Administrator determined that: 

 Six GHGs,

8

including methane, taken in combination, endanger both the 

public health and the public welfare of current and future generations.

 GHGs from new motor vehicles and new motor vehicle engines contribute 

to the GHG air pollution that endangers public health and welfare under 

CAA Section 202(a).

 

7 549 U.S. 497 (2007).

8 Carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride.
14-P-0324 7

After the agency began regulating GHGs from motor vehicles, it issued proposed

regulations of GHG emissions from the largest stationary sources.

9

EPA’s Natural Gas STAR is a Voluntary Program to Reduce 

Methane Emissions

The EPA works with industry partners to voluntarily reduce methane emissions 

from all sectors of the natural gas industry, from production through distribution,

through its Natural Gas STAR program. This program, established in 1993, 

provides a framework to encourage partner companies to implement methane 

emission-reducing technologies and practices. It also calls for them to document 

their voluntary emission-reduction activities and report emission reductions to the 

EPA. The EPA tracks these reported emission reductions to determine the 

effectiveness of the voluntary efforts under the Natural Gas STAR program.

Federal Regulations for Safety of Natural Gas Distribution Pipelines

The Department of Transportation’s PHMSA regulates natural gas distribution 

pipelines. The emphasis of PHMSA’s regulations in this sector is almost 

exclusively on safety and the prevention of lost life and property. PHMSA 

regulations require distribution pipeline operators to conduct periodic leakage 

surveys and promptly repair any hazardous (i.e., potentially explosive) leaks. In 

December 2009, PHMSA amended its pipeline safety regulations to require 

distribution sector operators to develop and implement integrity management 

programs. Such programs were aimed at improving leak management and damage 

prevention. 

Responsible Offices 

The EPA offices having primary responsibility over the issues discussed in this 

report are the Office of Air and Radiation’s (OAR’s) Office of Atmospheric 

Programs and Office of Air Quality Planning and Standards. The Office of 

Atmospheric Programs is responsible for efforts under the voluntary Natural Gas 

STAR program, while the Office of Air Quality Planning and Standards is 

responsible for developing regulations for air pollutants.

Scope and Methodology

We conducted our review from June 2013 through April 2014. We conducted this 

performance audit in accordance with generally accepted government auditing 

standards. Those standards require that we obtain sufficient, appropriate evidence 

to provide a reasonable basis for our findings and conclusions based on our 

 

9 A stationary source is a place or object from which pollutants are released that do not result from an internal 

combustion engine for transportation purposes, a nonroad engine, or a nonroad vehicle. Stationary sources include 

power plants, gas stations, incinerators, houses, pipelines, etc.
14-P-0324 8

objective. We believe the evidence obtained provides a reasonable basis for our 

findings and conclusions based on our objective.

To determine what actions the EPA has taken to reduce methane emissions from 

leaking pipelines in the distribution sector, we reviewed relevant laws and 

regulations, including the:

 1990 CAA, as amended.

 Oil and Natural Gas Sector: New Source Performance Standards (NSPS) and 

National Emission Standards for Hazardous Air Pollutants (NESHAP).

 Prevention of Significant Deterioration and Title V Greenhouse Gas 

Tailoring Rule.

 Mandatory Reporting of Greenhouse Gases Rule Subpart W -

Petroleum and Natural Gas Systems.

 Transportation of Natural and Other Gas by Pipeline: Minimum Federal 

Safety Standards. 

We also reviewed data and other documents obtained from the EPA and external 

parties, including:

 Information on the EPA’s Natural Gas STAR program and practices to 

reduce methane leaks.

 Greenhouse Gas Reporting Program (GHGRP) data and documentation.

 Inventory of U.S. Greenhouse Gas Emissions and Sinks (GHG Inventory)

data and documentation.

 Numerous external reports and studies on methane leaks and emissions.

We interviewed EPA managers and staff in OAR’s Office of Atmospheric 

Programs and Office of Air Quality Planning and Standards; the Office of 

Research and Development; and the Office of General Counsel. We also 

interviewed representatives from the American Gas Association, BlueGreen 

Alliance, Conservation Law Foundation, Duke University, Environmental 

Defense Fund, the Gas Technology Institute, National Association of Regulatory 

Utility Commissioners, and Picarro.
14-P-0324 9

Chapter 2

EPA Does Not Regulate Methane Emissions 

From Distribution Pipelines and Voluntary Efforts

Have Achieved Limited Reductions

The EPA has not issued regulations to control methane emissions from distribution 

pipelines, partnered with PHMSA to control such leaks, nor developed a strategy 

to address barriers that inhibit the mitigation of methane leaks in the natural gas 

distribution sector. While the Natural Gas STAR program has been successful in 

reducing methane from other segments of the industry, this voluntary program has

achieved limited reductions from leaking distribution pipelines, due largely to 

financial and policy barriers. For example, LDCs generally have had to bear the 

upfront capital expenditures to repair leaks, while the savings from these repairs 

have accrued to the consumer, thus creating a disincentive for LDCs to repair 

nonhazardous leaks. While the natural gas distribution sector is not the largest 

emitter of methane, it is one of the industry sectors included in the 2014 

interagency methane strategy. The EPA should partner with PHMSA to reduce 

methane emissions from both a safety and environmental perspective, and develop 

a strategy to address financial and policy barriers. The EPA also needs to set goals 

and track its progress in reducing emissions from distribution pipelines through 

voluntary approaches to determine if future regulation would be appropriate. In 

addition to contributing to global climate change, methane leaks from distribution 

pipelines represent more than $192 million in lost natural gas product annually.

Methane Emissions From Natural Gas Distribution Pipelines 

Not Currently Regulated by EPA 

The EPA does not currently regulate methane emissions from distribution pipelines

under the CAA. The EPA does regulate other parts of the natural gas industry under 

two provisions of the CAA: Section 111 (NSPS), and Section 112 (NESHAP).

EPA’s NSPS for the natural gas industry limits emissions of criteria pollutants10

and volatile organic compounds.

11 EPA’s NESHAP limits emissions of air toxics.12

 

10 Criteria pollutants include six common pollutants: ozone, particulate matter, carbon monoxide, nitrogen dioxide, 

sulfur dioxide and lead. These are called criteria pollutants because EPA regulates them by first issuing “air quality 

criteria,” which reflect the latest scientific knowledge about the pollutants’ effects on public health or welfare, then 

sets standards for permissible levels of the pollutants in the ambient air to protect against such adverse effects.

11 Volatile organic compounds are emitted as gases from certain solids or liquids. Volatile organic compounds

include a variety of chemicals, some of which may have short- and long-term adverse health effects.

12 Air toxics, also known as hazardous air pollutants, are pollutants that are known or suspected to cause cancer or 

other serious health effects, such as reproductive effects or birth defects, or adverse environmental effects. There are 

currently 187 air toxics listed under CAA Section 112(b).
14-P-0324 10

However, neither the NSPS nor NESHAP address methane emissions directly.

13

Since natural gas is almost pure methane by the time it reaches the distribution 

sector, there are no criteria or toxic air pollutants to control. The result is that 

methane emissions from the distribution sector are not addressed by the EPA’s 

current emission limits for the natural gas industry.

When the EPA issued the revised NSPS and NESHAP for the natural gas industry

in 2012, it stated that it “intend[s] to continue to evaluate the appropriateness of 

regulating methane with an eye toward taking additional steps if appropriate.” The 

EPA has not made a decision about regulating methane. We estimate that more than

$192 million14 in natural gas was lost due to distribution pipeline leaks in 2011.

The 2014 interagency methane strategy states that the EPA will issue a series of 

white papers on potentially significant sources of methane emissions in the oil and 

natural gas sector during the spring of 2014, and solicit input from independent 

experts. These white papers were issued in April 2014 and focused on methane 

and volatile organic compounds emissions from hydraulically fractured oil wells, 

liquids unloading, pneumatic devices, compressors, and leaks. In the fall of 2014, 

the EPA is to determine what, if any, regulatory authorities the agency will use to 

control emissions from these sources. None of the issued white papers address 

methane emissions from distribution pipelines.

No Local Distribution Companies Have Obtained GHG Permits 

From EPA

No local distribution companies (LDCs) have obtained GHG permits from the 

EPA. In general, any facility with potential to emit 100,000 tons per year (tpy) or 

more of GHG (measured on a CO2e basis) must obtain a CAA Title V operating 

permit. Additionally, new facilities with the potential to emit 100,000 tpy or more 

of GHGs (measured on a CO2e basis)—and greater than or equal to the applicable 

major source threshold (i.e., 100 or 250 tpy, depending on the source category) on a 

mass basis—must generally obtain a Prevention of Significant Deterioration (PSD) 

pre-construction permit before it can commence construction. Also, existing 

facilities that plan to undertake modifications that substantially increase their 

potential to emit GHG’s may also be required to obtain a PSD permit for GHG 

emissions before they can make the modifications.

15

 

13 While neither the NSPS nor NESHAP directly control or address methane emissions, these rules are expected to 

achieve substantial methane emission reductions as a co-benefit of controlling volatile organic compounds 

emissions. However, since the regulations do not cover the distribution sector, no methane emission reductions from 

distribution pipelines are expected as a co-benefit.

14 This figure is based on the EPA’s 2011 GHG Inventory distribution pipeline emissions estimate of 13 MMT CO2e 

and the 2011 average city gate price of natural gas of $5.63 per thousand cubic feet (MMT CO2e was converted to 

thousand cubic feet of methane).

15 EPA provides a thorough discussion of the various GHG permitting requirements in PSD and Title V Permitting 

Guidance for Greenhouse Gases (March 2011), at http://www.epa.gov/nsr/ghgdocs/ghgpermittingguidance.pdf.
14-P-0324 11

Thirty-six LDCs reported more than 100,000 tpy of methane emissions to the EPA 

in 2011. However, none of these companies has obtained a GHG permit. In our 

view, this is likely due to the fact that methane emissions from distribution 

pipelines are generally “fugitive” emissions resulting from leaks. Under current 

EPA policy, fugitive emissions from these facilities are not counted toward the 

thresholds for determining whether a source is subject to GHG permitting 

provisions, except for major modifications at sources under PSD requirements per 

the EPA’s 2013 permitting guidance that cites CAA Section 302(j) and relevant 

regulatory provisions.

16

EPA Has Not Partnered With PHMSA to Control Methane Leaks

Historically, PHMSA has regulated LDCs’ pipeline infrastructure with a public 

safety focus rather than an environmental protection focus.

17 PHMSA’s regulations 

were not designed to mitigate the environmental impacts of leaks. PHMSA requires 

LDCs to repair or replace leaking pipelines that:

. . . represent an existing or probable hazard to persons or property 

and requires immediate repair or continuous action until the 

conditions are no longer hazardous. 

PHMSA regulations leave the repair of non-hazardous leaks to the discretion of the 

LDC. 

According to the Executive Director of BlueGreen Alliance,

18 when LDCs discover 

a leak, they may vent the leak to the atmosphere instead of repairing it if the leak is

not a safety hazard. An LDC may also vent a hazardous leak to reduce the safety 

threat of the leak, thus reducing its explosive potential and downgrading its hazard 

rating. If a state does not adopt initiatives to enforce the repair of persistent, nonhazardous leaks, the LDC can potentially allow a non-hazardous leak to vent to the 

atmosphere in perpetuity. 

States vary in their regulations and initiatives to repair non-hazardous leaks. Some 

states have been proactive in developing initiatives that go beyond PHMSA’s 

requirements. According to information from the National Association of Pipeline 

Safety Representatives and National Association of Regulatory Utility 

Commissioners, in 2013 approximately half of the states had not adopted initiatives 

that would prevent non-hazardous leaks from persisting in perpetuity. Additionally, 

22 states (or specific utilities within the states) have adopted initiatives to replace 

cast iron and/or unprotected steel pipelines.

 

16 Counting GHG Fugitive Emissions in Permitting Applicability (December 12, 2013); EPA guidance document 

addressing questions about GHG permitting at http://www.epa.gov/nsr/ghgqa.html.

17 PHMSA has federal oversight of the natural gas distribution network; PHMSA’s focus is on safety and the 

prevention of loss of life.

18 The BlueGreen Alliance is an organization that represents 14 of the largest unions and environmental groups in 

the United States.
14-P-0324 12

The EPA has not partnered with PHMSA to address leaks from a combined safety 

and environmental standpoint. EPA staff told us that they do not have a formal 

partnership with PHMSA, and PHMSA last participated in an EPA Natural Gas 

STAR workshop in 2009. The lack of coordinated action between the EPA and 

PHMSA hinders an effective partnership where PHMSA’s technology and 

regulations could be used to produce additional environmental benefits. The EPA 

has the opportunity to partner with PHMSA in implementing the 2014

interagency methane strategy.

EPA’s Voluntary Program Has Achieved Limited Emission Reductions 

From Natural Gas Distribution Pipelines

The EPA works with natural gas industry partners to voluntarily reduce their 

methane emissions through the Natural Gas STAR program. The emission reductions 

achieved by the Natural Gas STAR program for the distribution sector, as reported 

by partner companies, has been limited in comparison to other segments of the 

natural gas industry. In 2012, the Natural Gas STAR program achieved a total of 

66 billion cubic feet in methane emissions reductions from the natural gas industry. 

Reductions from the distribution sector accounted for only 1 percent of this. In 

comparison, reductions from the production sector accounted for 82 percent, and 

reductions from the transmission sector accounted for 15 percent. Further, since 

1993, the cumulative amount of methane emissions reduced from the distribution 

sector through 2012 was 45.4 billion cubic feet, compared to 255.9 billion cubic feet

for the transmission sector. In addition, as of 2012, emissions from the production

sector had been reduced by 819.4 billion cubic feet since 1990.

The Natural Gas STAR program has identified several technologies or practices 

that LDCs can voluntarily adopt to reduce methane leaks in the distribution 

sector. These include:

 Inserting flexible plastic liners inside existing cast iron and unprotected

steel pipeline. Plastic leaks less than cast iron and unprotected steel, and 

its installation is less costly and disruptive than replacing existing pipe 

with new pipeline.

 Using composite wrap to repair defects—such as pits, dents, gouges and 

external corrosion—to prevent leaks. Installation of composite wrap can 

be performed on an operating pipeline without taking it out of service.

 Using directed inspection and maintenance to find and fix significant leaks 

based upon an inspection schedule. Through a directed inspection and 

maintenance program, LDCs monitor and inspect components prone to leak 

enough methane to make repairs cost effective. LDCs use special infrared 

cameras to detect methane emissions from hundreds of components.

The Natural Gas STAR program shares and publicizes these technologies and 

practices through its website, newsletters and technology transfer workshops in an 
14-P-0324 13

effort to promote and increase their use among partner companies. However, the 

low level of emission reductions achieved to date from this sector suggests that 

the use of these technologies and practices is limited and could be expanded.

Financial and Policy Barriers Hinder Methane Emission Reductions 

From the Distribution Sector

The limited emission reductions achieved by the distribution sector are due in large 

part to the fact that LDCs have little financial incentive to reduce methane

emissions from leaking pipelines that do not pose a potential safety hazard. LDCs 

typically do not own the gas that flows through their pipeline networks. LDCs are 

generally allowed to pass on to their customers the costs of gas that is “lost and 

unaccounted for” from the pipeline system, including gas lost to leaks. The benefits 

of repairing leaks (i.e., gas savings) are passed on to the consumer. Thus, there is a 

financial disincentive for LDCs to proactively locate and repair leaks. The cost of 

the product lost (i.e., natural gas) is easy for LDCs to recover while the costs to 

repair, replace or retrofit pipelines poses more of a cost recovery challenge. 

State public utility commissions (PUCs) regulate the rates and services of LDCs.

Their policies can create barriers to reducing methane emissions from leaking 

pipelines. Repairing or replacing pipeline involves significant capital investments, 

and the LDC generally has to carry these costs until they can be recovered. Cost 

recovery is usually not permissible until after the filing of a rate case, a 

proceeding through which an LDC applies to the PUC for a rate increase. A rate 

case can create a “regulatory lag” in that the LDC is responsible for bearing the 

costs of pipeline replacement and repair until the rate increase takes effect and the 

LDC begins to recover its costs.

Another barrier to replacing and repairing pipeline involves the traditional practice 

of charging customers for the amount of gas used based on a per-unit price (such as 

dollars per kilowatt hour). This practice promotes pipeline expansion rather than 

repair and replacement because expansion will increase the LDCs customer base, 

resulting in more gas sold and revenue earned. Conversely, investing in 

improvements to existing infrastructure will lead to increased gas rates, which will 

deter consumption and potentially result in lost revenue for the LDC.

In recognition of these financial and policy barriers, some PUCs have taken steps to 

improve cost recovery mechanisms for their LDCs. PUCs have to balance goals—

such as ensuring consumers receive safe and reliable service at reasonable rates—

while allowing LDCs an opportunity to earn a fair rate of return. There are a 

number of financing mechanisms that allow LDCs to recover capital expenditures 

for fixing leak-prone pipelines on an annual basis. These mechanisms can decrease 

LDCs’ capital recovery times and diminish the disincentives to repair and replace 

leaking pipelines.
14-P-0324 14

The EPA does not have a strategy to address the financial and policy barriers that

inhibit the mitigation of methane leaks in the natural gas distribution sector. The 

EPA’s Fiscal Year 2011–2015 Strategic Plan proposes to “reduce the threats posed 

by climate change by reducing GHG emissions” through cost-effective voluntary 

programs (like Natural Gas STAR). Natural Gas STAR representatives told us they 

have limited options to address methane leaks in the distribution sector because of 

the financial and policy barriers.

According to the EPA’s Strategic Plan, voluntary programs play a key role in 

reducing GHG emissions. However, the EPA’s Strategic Plan does not contain 

strategic measures or performance goals for reducing methane from leaking 

pipelines. Such measures and goals are a critical first step in providing a framework 

for accountability, results and monitoring of voluntary program effectiveness.

Natural Gas STAR representatives told us PUCs could play a key role in reducing 

methane emissions from the distribution sector. They said the Natural Gas STAR 

program could work with PUCs in developing a new financial model. A financial 

model that alters the current incentive structure of LDCs to proactively repair more 

leaks should help the EPA’s voluntary programs achieve results. 

Conclusions

The EPA does not currently regulate methane emissions from distribution 

pipelines, and the agency’s voluntary efforts have achieved limited reductions from 

this sector. In addition to contributing to global climate change, methane leaks from 

distribution pipelines represent more than $192 million in lost natural gas product

annually, a cost borne by consumers. The 2013 Climate Action Plan and its 

associated 2014 interagency methane strategy provide the foundation for increased 

EPA effort and attention to methane emissions from distribution pipelines. The 

EPA needs to develop a strategy to address financial and policy barriers that hinder 

voluntary emission reductions in the sector. The EPA could maximize its emission 

reductions by focusing on states that have the highest amount of cast iron and 

unprotected steel pipelines and do not have initiatives to replace these pipelines.

Additionally, establishing transparent goals and measures for the agency’s

voluntary program will aid future determinations about the need to regulate 

methane emissions from distribution pipelines. 

Recommendations

We recommend that the Assistant Administrator for Air and Radiation:

1. Address methane emissions from the natural gas distribution sector as part 

of the agency’s efforts to carry out the 2013 Climate Action Plan and 

associated 2014 interagency methane strategy. Specifically, as part of the 

interagency methane strategy, the EPA should work with the Department 
14-P-0324 15

of Transportation’s PHMSA to address methane leaks from a safety and 

environmental standpoint.

2. Develop and implement a strategy to address the financial and policy 

barriers to repairing methane leaks from distribution pipelines. This 

strategy should include partnering with state PUCs to overcome barriers, 

and consider regional/state pipeline infrastructure and policy variations.

3. Establish annual performance goals for reducing methane emissions from 

distribution pipelines through the EPA’s voluntary programs, such as 

Natural Gas STAR, and report annually in the EPA’s Annual Performance 

Report the agency’s progress in meeting these goals.

4. Assess annually whether the above annual performance goals are being 

met and, if not, determine whether changes or modifications in voluntary 

programs and other options available to the EPA are needed, including 

whether regulating methane emissions from the distribution sector would 

be appropriate under the CAA.

Agency Comments and OIG Evaluation

The agency agreed with recommendations 1 and 2 and provided acceptable planned 

corrective actions and completion dates that meet the intent of these 

recommendations. For recommendation 1, the agency plans to enhance its 

collaboration with PHMSA to reduce leaks from the distribution sector through 

implementation of the 2014 interagency methane strategy. For recommendation 2, 

the agency plans to collaborate with the Environmental Council of the States to 

identify opportunities to reduce methane emissions from the distribution sector. 

This includes participating in the Environmental Council of the States’ Shale Gas 

Council, through which the EPA will engage states in discussions about methane 

emission reductions. OAR also plans to engage in discussions with the

Downstream Initiative, which was identified in the 2014 interagency methane 

strategy, and to work with PUCs to focus on ways to overcome obstacles to 

reducing emissions in the distribution sector. Recommendations 1 and 2 are 

resolved and open with corrective actions ongoing.

The agency partially agreed with recommendation 3. It stated that it already tracks 

voluntary methane emission reductions through the Climate Protection Partnerships 

Annual Report and the U.S. Climate Action Report. However, the measures in 

these reports are for methane emissions as a whole, and are not specific to the 

distribution sector. The agency also stated that it already has an annual performance 

goal for Industrial Sector Programs that tracks and assesses progress through 

voluntary efforts to reduce GHG emissions. However, this measure is not specific 

to the Natural Gas STAR Program nor the distribution sector, and includes GHG 

emissions other than methane. We acknowledge that the EPA provides information 

on methane emissions from the distribution sector on its Natural Gas STAR 
14-P-0324 16

website, but these emissions are not tracked over time. Rather, they present overall 

emissions for only 1 year. Thus, none of these measures tracks progress in reducing 

methane emissions from the distribution sector alone. We believe that combining 

distribution sector emissions with emissions from other sectors masks what is 

actually occurring in the distribution sector. Further, given the lack of incentives 

and the unique disincentives in the distribution sector, we believe that a measure 

that tracks progress for the distribution sector alone is warranted. Therefore, 

recommendation 3 is unresolved.

For recommendation 4, the agency stated that it would continue its efforts to 

evaluate data and assess potential opportunities that could be taken to further 

address emissions from the distribution sector. While we support the agency’s 

efforts to continuously assess opportunities to address these emissions, to meet the 

intent of this recommendation, the EPA needs to develop a performance measure 

for the distribution sector alone that assesses progress in meeting established goals 

for reducing methane emissions. Progress should then be monitored using this 

distribution sector-specific measure. Therefore, recommendation 4 is unresolved.

Appendix A contains the agency’s response to recommendations 1, 2, 3 and 4 and 

its proposed corrective actions.
14-P-0324 17

Chapter 3

EPA’s Methane Emissions Data for Natural Gas 

Distribution Pipelines Need to Be Improved

There is significant uncertainty in the EPA’s current methods for estimating 

methane emissions for the distribution sector. The EPA estimates methane 

emissions for the distribution sector using the GHG Inventory and the GHGRP. 

Emission estimates from both programs are developed using emission factors

(EFs) that are based on data from a 1996 EPA and Gas Research Institute (GRI) 

study. Uncertainties in these EPA/GRI EFs raise questions about the validity of 

the EFs and, therefore, the accuracy of the distribution sector’s methane emissions 

reported in the GHG Inventory and GHGRP. Findings from recent research not 

funded or sponsored by the EPA suggest that methane emissions from distribution 

pipelines may be higher or lower than EPA’s current estimates. The EPA has not 

conducted its own studies or sponsored external studies to re-evaluate the 

distribution pipeline EFs from the EPA/GRI study. Instead, the EPA has been 

focusing on updating EFs for other sectors of the natural gas industry, such as 

production and processing. Effective methane reduction strategies may be 

difficult to develop without better estimates of methane emissions from this

sector.

EPA Uses Emission Factors to Estimate Methane Emissions

The EPA estimates methane emissions through both the GHG Inventory and the 

GHGRP. Both of these EPA programs rely on distribution pipeline EFs19 based 

on data from the 1996 EPA/GRI study to estimate distribution sector methane 

emissions. The 1996 study calculated leak rates for several different kinds of 

distribution pipelines (cast iron, unprotected steel, protected steel, plastic and 

copper). The EPA later used the leak rates from the 1996 study to develop the

distribution pipeline EFs it uses in the GHG Inventory and GHGRP.

20

 

19 The EPA defines EF as a representative value that attempts to relate the quantity of a pollutant released to the 

atmosphere with an activity associated with the release of that pollutant. In most cases, these EFs are simply averages 

of all available data of acceptable quality and are generally assumed to be representative of long-term averages for all 

facilities in the source category (i.e., a population average). For the natural gas distribution sector, EPA/GRI 

developed EFs for distribution lines made of unprotected steel, protected steel, plastic, cast iron and copper.

20 When we refer to EFs in this chapter, we are referring to the distribution pipeline EFs that the EPA developed 

based on the 1996 data to estimate emissions for the GHG Inventory and GHGRP.
14-P-0324 18

EPA’s GHG Inventory

The GHG Inventory is an annual report—with data compiled by EPA staff—that 

tracks total annual U.S. emissions and removals21 by source, economic sector and 

GHG going back to 1990. The EPA uses national energy data, data on national 

agricultural activities and other national statistics to provide a comprehensive 

“bottom-up” estimate22 of total GHG emissions for all man-made sources in the

United States.

To estimate methane emissions from distribution pipelines for the GHG 

Inventory, EPA staff generally use the EFs based on the 1996 EPA/GRI study. 

The EFs for distribution mains are applied to the miles of pipeline of each type of 

material used23 (i.e., plastic, cast iron, unprotected steel and protected steel) to 

generate emission estimates from all mains. The EFs for distribution services are 

applied to the number of service lines of each type of material used to generate 

emission estimates from all service lines. Once the EPA has added these totals 

together for a gross estimate, it subtracts out emission reductions achieved from 

the Natural Gas STAR program to account for reductions resulting from the 

program’s voluntary efforts. For 2011, EPA staff estimated methane emissions 

from natural gas distribution pipelines to be about 14 MMT CO2e.

EPA’s GHG Reporting Program

Large emission sources and fuel suppliers are required to report their GHG 

emissions data under EPA’s GHGRP.

24 The GHGRP has a reporting threshold of 

25,000 metric tons of CO2e. Only those LDCs that meet or exceed the threshold 

must report methane emissions to the EPA. A key difference from the GHG 

Inventory is that GHGRP data are reported to the EPA by those facilities meeting 

the threshold limits. Still, the GHGRP requires that LDCs use the EFs that are 

based on the 1996 EPA/GRI study, multiplied by miles/number of each type of 

pipeline within their systems. For 2012, GHGRP facilities reported that their 

distribution pipelines emitted about 12 MMT CO2e.

Validity of EPA’s Emission Factors for Distribution Pipelines Uncertain

Our review of the 1996 EPA/GRI study of distribution pipelines found that there 

was significant uncertainty in the study data due to small sample sizes and widely 

 

21 Removal refers to the ability to take up, as opposed to emit, GHG emissions. This occurs due to sinks (for 

example, trees or crops), which are resources or processes that remove atmospheric GHGs from the air. 

22 A bottom-up estimate is derived by adding together estimates of individual anthropogenic sources. Top-down

approaches, on the other hand, involve atmospheric measurements and the use of meteorological data and statistical 

analyses to trace atmospheric concentrations back to individual sources.

23 The EPA obtains data on miles of pipeline from PHMSA.

24 Most source categories began reporting yearly GHG data with the 2010 reporting year and these 2010 data were 

reported to the EPA by September 2011. Additional source categories began reporting yearly GHG data with the 

2011 reporting year and these 2011 data were reported to the EPA by September 2012.
14-P-0324 19

varying leak measurements. The 1996 study included only 21 samples from cast 

iron mains, 20 samples from unprotected steel mains, 17 samples from protected 

steel mains, and six samples from plastic mains. The sample sizes for distribution 

service lines were similar, ranging from 24 for protected steel service lines to four

for plastic service lines. In addition, the study produced a wide range of 

measurements, resulting in uncertainty about the true leak rate. For example, the

study authors concluded that the average emission factor for cast iron mains was 

238,736 standard cubic feet (scf) per mile of pipeline per year (scf/mile-year),

25

with a 90-percent confidence interval of +/-152,059 scf/mile-year. This means 

there was only 90-percent confidence that the true average emission rate fell 

within a very large range of values (from 86,677 scf/mile-year to 390,795 

scf/mile-year). 

As of 2012, there were more than 32,000 miles of cast iron mains in the United 

States. Therefore, current emission estimates based on the 1996 EPA/GRI average 

emission factor for cast iron mains may be much higher or lower than actual 

emissions. 

 

The 1996 EPA/GRI study also reported a surprisingly high leakage rate for plastic 

mains, the type of pipe generally viewed as the least leak-prone. The study 

concluded that the average leak rate for plastic mains is 12.45 scf per leak per 

hour (scf/leak-hour). This rate is significantly higher than the study’s estimate for 

unprotected steel mains, which are known to corrode and leak over time. 

According to the study, the relatively high average leakage rate for plastic mains 

was due to the small sample size (only six samples) and one large data point that 

skewed the overall average leak rate. The data points for the plastic mains 

sampled ranged from 0.008 scf/leak-hour to 61 scf/leak-hour, a span of five orders 

of magnitude. As a result, there is more uncertainty in the EPA/GRI average leak 

rate for plastic mains than for any other type of distribution pipe.

In 2005, in response to comments that the 1996 EPA/GRI emission factor for 

plastic pipelines was unreasonably high, the EPA researched additional data 

sources and found a study by the Southern California Gas Company that 

contained seven leak measurements at plastic pipelines. This data showed a leak 

rate that was a little more than half of what EPA/GRI had measured for the 1996 

study. The EPA weight-averaged this data with the 1996 EPA/GRI data for plastic 

pipelines to improve the original EF. This adjusted EF for plastic pipelines is now 

used in the GHG Inventory and GHGRP. However, EPA has not adjusted the EFs 

for cast iron mains, unprotected steel mains or protected steel mains.

Recent Emissions Data From the Gas Technology Institute

Results of a recent Gas Technology Institute (GTI)26 study indicated that the 

EPA/GRI EF for plastic mains significantly overestimates emissions. GTI found a 

 

25This was the average EF after EPA/GRI adjusted it to account for soil oxidation.

26 The GTI was formerly the GRI and the Institute of Gas Technology.
14-P-0324 20

leak rate for plastic mains of 3.72 scf/leak-hour versus EPA/GRI’s average leak 

rate of 12.45 scf/leak-hour.

Table 3 shows a comparison of the 1996 EPA/GRI and 2013 GTI study results. It 

compares number of samples, estimated leak rate for plastic mains, minimum leak 

rate measured, maximum leak rate measured, and the 90-percent confidence 

interval. It demonstrates that the 2013 GTI study design yielded a much smaller 

range with respect to the 90-percent confidence interval. Thus, the 2013 GTI 

study was more precise in its estimated leak rate for plastic mains. 

Table 3: Comparison of study results for plastic mains

Study

Samples 

tested

Est. leak 

rate 

(scf/leakhour)

Min. value 

(scf/leakhour)

Max. value 

(scf/leakhour)

90-percent

confidence 

interval

(scf/leak-hour)

1996 EPA/GRI 6 12.45a 0.008 61.0 +/- 19.81

2013 GTI 22 3.72 0.600 14.4 +/- 1.41

Source: OIG analysis of (1) “Methane Emissions from the Natural Gas Industry, Volume 9 –

Underground Pipelines,” EPA and GRI, June 1996; and (2) “Improving Methane Emission Estimates 

for Natural Gas Distribution Companies, Phase II–PE Pipes,” GTI, November 2013.

a This leak rate is from the 1996 EPA/GRI study and does not reflect the EPA’s 2005 adjustment to the 

plastic pipeline EF. The EPA uses the adjusted leak rate for plastic pipelines in the GHG Inventory and 

GHGRP.

Two Recent External Reports Questioned EPA’s Emissions Data for

Distribution Pipelines

A 2012 report27 from Cornell University stated that emission estimates based on 

the 1996 EPA/GRI study are too low. The authors questioned why the 1996 

EPA/GRI emission factors were based on emissions from facilities run by 

companies that voluntarily participated, rather than a random sample or 

comprehensive assessment of actual industry practices. Further, the authors stated

that distribution systems in some cities are 80 to 100 years old, yet such systems 

were not included in the 1996 EPA/GRI assessment.

A 2013 report from Gas Safety Incorporated28 raised questions about the 

usefulness of the EPA’s EFs for distribution pipelines and emission estimates for 

this sector. In its report, Gas Safety Incorporated noted issues similar to those 

discussed in the previous section regarding the precision of the EPA/GRI data. 

The report concluded that:

Estimates generated using the EPA/GRI 1996 method have such a 

wide confidence interval (±65 %) that their general accuracy and 

usefulness is questionable.

 

27 Robert W. Howarth, Renee Santoro, and Anthony Ingraffea, “Venting and leaking of methane from shale gas 

development: response to Cathles et al.,” Climatic Change (journal), February 2012.

28 Bryce F. Payne Jr. and Robert Ackley, “Extended Report on a Preliminary Investigation of Ground-Level 

Ambient Methane Levels in Manhattan, New York City, New York,” Gas Safety Incorporated, March 2013.
14-P-0324 21

The authors ultimately concluded that existing methane emission estimates, or 

methods for estimating emissions, have little basis in actual data.

Recent Reports Describe a High Level of Uncertainty Regarding 

Methane Emissions Estimates

In its 2011 GHG Inventory report, the EPA stated that there is a lack of data or an 

incomplete understanding of how emissions are generated for some emissions 

categories. These factors increase the uncertainty associated with certain estimates 

presented. In our discussions with EPA staff, they confirmed that methane is one 

of the emissions categories with relatively high uncertainty.

The EPA’s uncertainty range relative to its 2011 national methane source estimate 

from natural gas systems is from -19 percent on the lower end to +30 percent on 

the upper end.

29 The 2013 GHG Inventory report further states that improving the 

accuracy of EFs could help reduce uncertainty in the GHG Inventory. It states

that:

. . . the accuracy of current emission factors applied to [methane]...

emissions from stationary and mobile combustion is highly 

uncertain.

A February 2014 report30 on methane emissions across all sectors, including the 

distribution sector, noted that emission inventories are under-predicting 

atmospheric methane, in part, because:

... measurements for generating emission factors are expensive, 

which limits sample sizes and representativeness. Many EPA EFs 

have wide confidence intervals. And there are reasons to suspect 

sampling bias in EFs, as sampling has occurred at self-selected 

cooperating facilities.

According to the report:

Given the cost of direct measurements, emissions inventories will 

remain useful for tracking trends, highlighting sources with large 

potential for reductions, and making policy decisions. However, 

improved inventory validation is crucial to ensure that supplied 

information is timely and accurate.

Similarly, the 2014 interagency methane strategy issued under the 2013 

Climate Action Plan stated that better methane emissions data collection 

and measurement would improve the nation’s understanding of methane 

 

29 The EPA did not produce an uncertainty estimate specifically for the natural gas distribution sector.

30 Brandt, et. al., “Methane Leaks from North American Natural Gas Systems,” Science (journal), February 2014.
14-P-0324 22

sources and trends, and enable more effective management of emissions 

reduction activities. The strategy listed the following as a key step to 

improve data quality:

Addressing areas of higher uncertainty in bottom-up inventories 

through additional data collection, direct emission measurement, 

and research and analysis.

The strategy specifically calls for an assessment of current methane emissions 

data and states that improvement opportunities exist with current EFs and other 

input data.

EPA Has Not Comprehensively Re-Evaluated Its

Natural Gas Distribution Pipeline Emission Factors

The EPA has not conducted any direct measurement studies on distribution 

pipeline emissions since the 1996 EPA/GRI study. As described earlier, the EPA 

made an adjustment in 2005 to the plastic pipeline emission factor used in the 

GHG Inventory and GHGRP. However, the EPA has not comprehensively 

evaluated the 1996 EPA/GRI distribution pipeline emission factors. GTI told us 

that the 1996 study methodology is not a practical way to obtain additional data 

since pipelines have to be excavated to obtain leak rates. The EPA has not 

committed resources toward developing a new methodology to estimate

distribution pipeline leaks. Rather, the EPA has focused on quantifying and 

addressing upstream emissions from the gas industry, such as emissions from 

natural gas production. 

EPA’s Attempt to Sponsor an External Study on Distribution Sector 

Emissions Ended Without Results 

The EPA made one attempt to sponsor an external study to update 1996 EPA/GRI 

distribution sector EFs. In 2008, the EPA awarded a grant of close to $500,000 to 

the University of Texas to update EFs for the following source categories:

 Production (well clean-ups, completion flaring, well workovers and 

pipelines leaks).

 Processing (fugitive emissions from reciprocating and centrifugal 

compressors).

 Transmission and storage (fugitive emissions from reciprocating and 

centrifugal compressors, pneumatic devices, and meter and regulating

stations).

 Distribution (residential customer meters, plastic mains and services). 

However, EPA staff told us that due to limitations related to time and scope, the 

study did not review EFs for the distribution sector. Instead, the study focused on 

emissions from production (gathering/boosting), processing (reciprocating and 
14-P-0324 23

centrifugal compressor components), and gas transmission. The study’s 

measurements produced lower EFs than the previous EPA/GRI study for some 

gas system components and higher EFs for other components. The study did not 

provide the EPA with updated emissions information for distribution systems. 

According to EPA staff, the EPA has not sponsored other studies on distribution 

sector emissions.

EPA’s Involvement in External Studies to Evaluate Distribution 

Pipeline Emission Factors Has Been Limited

There are recent and ongoing studies whose results could help the EPA validate 

and/or update its EFs for distribution sector leaks. However, EPA staff told us they

were not involved in developing the studies’ design or protocols. Therefore, the 

agency does not know how useful the studies will be for updating its distribution 

pipeline EFs. Two studies that could be informative for the EPA are: 

 GTI study – GTI is currently conducting a multi-phased project targeting 

distribution sector emissions. Phase I of this project developed a

methodology to update leak rate data and EFs for buried distribution 

piping. Phase II updated the leak rate for plastic distribution pipe. These 

results have been shared with EPA staff. Phase III will update the leak rate 

data and EFs for cast iron and unprotected steel distribution mains. 

Phase III data collection has commenced and is planned to continue 

through the first half of 2014. 

 Environmental Defense Fund (EDF) – EDF is partnering with industry 

and university researchers to study distribution sector leaks. There are 

three components to this study, including: (1) a top-down study in Boston 

looking at how much of the atmospheric methane is from distribution; 

(2) a bottom-up study conducted in multiple cities, measuring leaks from 

local distribution pipelines; and (3) a study to quantify local distribution 

leaks and associated leak flux rates using drive-by technology. 

According to EPA staff, the EPA’s involvement in these studies has been limited.

At the time we conducted our review, EPA staff had just recently received the GTI 

report on plastic distribution pipelines and had not yet evaluated it. In the most 

recent GHG Inventory, EPA mentions the GTI and EDF studies and states that:

EPA looks forward to reviewing information and data from these 

studies as they become available for potential incorporation in the 

Inventory. For example, EPA anticipates reviewing upcoming data 

on transmission and storage, and distribution system emissions for 

potential updates to the 1990–2013 Inventory report.

According to GTI representatives, updates to the original distribution pipeline EFs 

are warranted to reflect changes in operating, leak detection and mitigation
14-P-0324 24

practices. GTI also stated there was a need to increase the sample size of the data. 

According to GTI, many of these issues are reflected in their current research to 

update the EFs for distribution pipelines.

Conclusions

The EPA’s existing methane emissions data for distribution pipelines may not be 

valid. Methane emissions from these pipelines may be higher or lower than 

currently estimated by the EPA. This makes the EPA’s assessment and decisions 

regarding the magnitude and relative importance of these emissions difficult. The 

EPA has stated its intent to evaluate the appropriateness of regulating methane, 

and potentially important data on methane emissions are becoming available from 

GTI and EDF. Further, the 2014 interagency methane strategy issued under the 

Climate Action Plan calls for the EPA to assess current methane emissions data 

and the emission factors upon which the data is based. In our view, this 

assessment should include emission factors for distribution pipelines. The EPA 

needs to examine the design of the GTI and EDF studies and evaluate the data to 

determine their usefulness for validating and/or updating its distribution pipeline

EFs. The EPA should also be more proactive in identifying opportunities to be 

involved in such studies in the future. By participating upfront in the design of 

studies, the EPA increases the likelihood that the study results may be useful to 

the agency in verifying and/or updating its emission factors.

Recommendation

We recommend that the Assistant Administrator for Air and Radiation:

5. Review data from existing and ongoing studies (as they become available) 

to determine whether the data can be used to verify and/or update existing 

emission factors, and document the rationale for determination of 

usability. If the data can be used, update emission factors as appropriate. 

If not, the EPA should proactively identify opportunities to work with the 

research community to obtain the data needed to update the distribution 

sector emission factors.

Agency Comments and OIG Evaluation 

The agency agreed that it is important to review data from existing and ongoing 

studies (such as the EDF and GTI studies) as they become available to determine 

if the new information can be used to update existing emission factors. The 

agency views its GHG Inventory annual review process and efforts underway in 

implementing the 2014 interagency methane strategy as opportunities to engage 

with stakeholders in the continued review and evaluation of distribution sector 

studies. However, the agency’s planned corrective actions do not meet the intent 

of recommendation 5. The EPA has not provided a proposed corrective plan to 

document its rationale for not using the data from existing and ongoing studies to 
14-P-0324 25

update its distribution sector EFs (if such a decision is reached). Also, EPA has 

not provided a proposed corrective plan for identifying opportunities to work with 

the research community to obtain data should the GTI and EDF study data not be 

adequate for verifying/updating existing distribution sector EFs. Therefore, 

recommendation 5 is unresolved.

Appendix A contains the agency’s response to recommendation 5 and its

proposed corrective actions.
14-P-0324 26

Status of Recommendations and 

Potential Monetary Benefits

RECOMMENDATIONS

POTENTIAL MONETARY 

BENEFITS (in $000s)

Rec. 

No.

Page 

No. Subject Status1 Action Official

Planned 

Completion 

Date

Claimed 

Amount

Agreed-To 

Amount

1 14 Address methane emissions from the natural gas 

distribution sector as part of the agency’s efforts to 

carry out the 2013 Climate Action Plan and 

associated 2014 interagency methane strategy. 

Specifically, as part of the interagency methane 

strategy, the EPA should work with the Department 

of Transportation’s PHMSA to address methane 

leaks from a safety and environmental standpoint.

O Assistant Administrator for 

Air and Radiation

12/31/14

2 15 Develop and implement a strategy to address the 

financial and policy barriers to repairing methane 

leaks from distribution pipelines. This strategy 

should include partnering with state PUCs to 

overcome barriers, and consider regional/state 

pipeline infrastructure and policy variations.

O Assistant Administrator for 

Air and Radiation

9/30/15

3 15 Establish annual performance goals for reducing 

methane emissions from distribution pipelines 

through the EPA’s voluntary programs, such as 

Natural Gas STAR, and report annually in the 

EPA’s Annual Performance Report the agency’s 

progress in meeting these goals.

U Assistant Administrator for 

Air and Radiation

4 15 Assess annually whether the above annual 

performance goals are being met and, if not, 

determine whether changes or modifications in 

voluntary programs and other options available to 

the EPA are needed, including whether regulating 

methane emissions from the distribution sector 

would be appropriate under the CAA.

U Assistant Administrator for 

Air and Radiation

5 24 Review data from existing and ongoing studies 

(as they become available) to determine whether

the data can be used to verify and/or update 

existing emission factors, and document the 

rationale for determination of usability. If the data 

can be used, update emission factors as 

appropriate. If not, the EPA should proactively

identify opportunities to work with the research 

community to obtain the data needed to update the 

distribution sector emission factors.

U Assistant Administrator for 

Air and Radiation

1 O = Recommendation is open with agreed-to corrective actions pending.

C = Recommendation is closed with all agreed-to actions completed.

U = Recommendation is unresolved with resolution efforts in progress.
14-P-0324 27

Appendix A

Agency Response to Draft Report

May 23, 2014

MEMORANDUM

SUBJECT: Response to Office of Inspector General (OIG) Draft Report No. OPE-FY13-0016

"Improvements Needed in EPA Efforts to Address Methane Emissions From

Natural Gas Distribution Pipelines," dated April 22, 2014

FROM: Janet G. McCabe

Acting Assistant Administrator

TO: Carolyn Copper

Assistant Inspector General

Office of Inspector General

The EPA's Office of Air and Radiation (OAR) appreciates the opportunity to review and 

comment on the OIG's draft evaluation report "Improvements Needed in EPA Efforts to Address

Methane Emissions from Natural Gas Distribution Pipelines" (Project No. OPE-FY13-0016). 

We appreciate the OIG's observations on the challenges that exist in evaluating and addressing

methane emissions from natural gas distribution pipelines.

While we acknowledge the inherent challenge in addressing methane emissions from the oil and 

gas sector, we also recognize that OAR has made great strides in working across the sector to 

reduce methane emissions. Through our programs, we have been able to establish a substantial

understanding of the technical, policy, and economic issues in this sector, and we have achieved 

real, tangible methane emissions reductions. We seek always to improve the effectiveness of our

programs, and strive to focus our limited resources on the highest priority actions, in terms of

expanding our knowledge, increasing the availability and quality of data and, most importantly,

reducing emissions that contribute to climate change and are harmful to public health and the 

environment. As explained more fully below, several of the OIG's recommendations identify 

activities OAR is already taking. Others suggest additional programmatic activities that we may 

be able to undertake in the future, as resources and competing priorities permit.

OAR has a robust process of collecting information about methane emissions from the natural 

gas sector, including the distribution sector, through our Greenhouse Gas (GHG) Reporting 

Program and our GHG Emissions Inventory. Through our work to develop the inventory each 

year, we undergo a thorough process of evaluating new data and information, and we outline a

strategy for improving data quality. We have promulgated and begun implementing regulations 

for new and modified sources in the natural gas sector through the 2012 New Source

Performance Standards for volatile organic compounds (VOC) emissions, which also reduce

methane emissions as an important co-benefit. Our successful voluntary partnership, the Natural 

Gas STAR Program, has worked collaboratively with industry partners in all sectors across the 
14-P-0324 28

natural gas value chain, including the distribution sector, and has identified numerous costeffective best practices for achieving methane reductions. The Gas STAR Program tracks annual 

emissions reductions reported by Partners, which is reported in the Office of Atmospheric

Programs: Climate Protection Partnerships Annual Report. The Gas STAR Program has 

identified over 50 cost-effective best management practices and technologies to reduce 

emissions, and has achieved cumulative program methane emission reductions of about 470 

million metric tons of carbon dioxide equivalent since 1990.

Most importantly, earlier this year the White House launched a comprehensive Strategy to 

Reduce Methane Emissions under the auspices of the President's Climate Action Plan. That

Strategy includes several important elements related to the oil and gas sector, and calls for 

specific actions by the EPA, the Department of Energy (DOE), the Department of Interior (DOl), 

and the Department of Transportation (DOT). The Strategy outlines the EPA's work to assess

several potentially significant sources of methane and other emissions from the oil and gas sector 

through a series of white papers, which were released for peer review in April 2014. The 

Strategy also describes the EPA's plans to bolster its Natural Gas STAR Program through 

launching a new component of the Partnership program that elicits more robust industry

commitments while enhancing transparency and accountability. The Strategy highlights a

"Downstream Initiative" that has been developed by industry and environmental groups to

address some of the key technical and regulatory factors in the natural gas distribution sector.

The strategy also describes important and substantive roles for DOE, DOT, and DOl to reduce

emissions from the natural gas sector. The EPA looks forward to working with our sister

agencies in implementing this important White House strategy, which identifies the highest

priority actions that will reduce emissions from this sector in a holistic and strategic manner.

Below are OAR's responses to the OIG's specific recommendations. In the attachment,31 we provide 

additional detailed comments, including a number of incorrect or inaccurate statements that had been 

identified in earlier discussions between OIG and OAR staff but were not incorporated into the draft 

report:

1. Address methane emissions from the natural gas distribution sector as part of the 

agency's efforts to carry out the 2013 Climate Action Plan and associated methane 

strategy. Specifically, as part of the interagency methane strategy, the EPA should 

work with the Department of Transportation's PHMSA to address methane leaks 

from a safety and environmental standpoint.

Response: OAR agrees that it is important to collaborate with other organizations to 

address methane leaks from distribution pipelines from both safety and environmental 

perspectives as we already are. Addressing methane emissions from the oil and gas sector 

through interagency collaboration is a key goal of the President's Climate Action Plan:

Strategy to Reduce Methane Emissions. Through implementation of this strategy, OAR 

will continue its efforts to enhance collaboration with the Pipeline and Hazardous 

Materials Safety Administration (PHMSA) to discuss best practices for reducing leaks in 

the distribution sector.

 

31 OAR also provided detailed comments in an attachment to its response to the draft report. We made revisions to 

our report to address OAR’s detailed comments where appropriate.
14-P-0324 29

Planned Completion Date: Fiscal Year (FY) 2015, Quarter (Q) 1

2. Develop and implement a strategy to address the financial and policy barriers to 

repairing methane leaks from distribution pipelines. This strategy should include 

partnering with state PUCs to overcome barriers, and consider regional/state

pipeline infrastructure and policy variations.

Response: OAR agrees that addressing policy and financial barriers is important to 

promote voluntary methane reductions from this sector. OAR will continue and enhance

our current collaboration with the Environmental Council of the States (ECOS), and with

natural gas downstream-focused initiatives to identify opportunities to reduce methane

from the distribution sector. For example, OAR is a Partner in the ECOS Shale Gas

Caucus and will use that forum to engage with broader discussions with states about

methane reductions from the natural gas sector. In addition, OAR is engaging in

discussions with the Downstream Initiative, which was identified in the President's 

Strategy to Reduce Methane Emissions, and is working directly with public utility

commissions to focus on ways to overcome obstacles in improving the distribution 

sector.

Planned Completion Date: FY15, Q4

3. Establish annual performance goals for reducing methane emissions from 

distribution pipelines through the EPA's voluntary programs, such as Natural Gas 

STAR, and report annually in the EPA's Annual Performance Report the agency's 

progress in meeting these goals.

Response: OAR is in partial agreement with this recommendation. Based on discussions 

with OIG staff, it is our understanding that the intent of Recommendation 3 is to establish 

goals for transparently tracking progress in voluntarily reducing methane emissions from

distribution pipelines.

OAR agrees with the importance of transparently evaluating progress through the 

voluntary programs, and we believe that our current tracking procedures are the most 

appropriate mechanisms to do so. Therefore, rather than creating a new APG, OAR 

proposes to continue to evaluate new data, ensure transparency, and track progress in 

reducing emissions from natural gas pipelines using our current mechanisms.

Planned Completion Date: FY14, Q4

To elaborate further on this topic, OAR already has established procedures in place 

through the Office of Atmospheric Programs Climate Protection Partnerships Annual

Report and the U.S. Climate Action Report to track and assess progress through 

voluntary efforts to reduce GHG emissions. Furthermore, one of the 286 annual 

performance goals (APG) that the EPA currently reports on in the EPA's Annual 

Performance Report is an APG for the Industrial Sector Programs, which includes the 

Natural Gas STAR Program voluntary methane reductions as one component.
14-P-0324 30

The EPA, per direction for the Director of the Office of Budget and the Director of the 

Office of Planning, Analysis, and Accountability, is working to reduce the number of 

individually tracked performance goals and we believe that the current reporting in the 

APG is consistent with the substantive intent of the recommendation.

4. Assess annually whether the above annual performance goals are being met and, if 

not, determine whether changes or modification in voluntary programs and other 

options available to the EPA are needed, including whether regulating methane 

emissions from the distribution sector would be appropriate under the CAA.

Response: OAR is in partial agreement with this recommendation. OAR agrees that it is 

important to evaluate all relevant emerging information to assess potential future actions, 

including changes or modifications in voluntary programs or other options available to 

the EPA. However, the Administrator, through OAR, has the authority and responsibility 

to determine whether regulatory action is appropriate, independent of the progress of 

voluntary programs, and in consideration of many factors, including other program 

priorities and available resources. OAR will continue the efforts already in place to 

evaluate new data, including from the GHG Reporting Program and outside studies. OAR 

will also continue to assess information gleaned through collaboration with other Federal 

agencies, states, and other entities under the auspices of the Interagency Strategy to

Reduce Methane Emissions. Based on these collective inputs, in keeping with its 

programmatic function, OAR will assess potential opportunities or actions that could be 

taken to further address emissions from the distribution sector.

Planned Completion Date: FY 16, Q2

5. Review data from existing and ongoing studies (as they become available) to 

determine whether the data can be used to verify and/or update existing emission 

factors, and document the rationale for determination of usability. If the data can be 

used, updated emission factors as appropriate. If not, the EPA should proactively 

identify opportunities to work with the research community to obtain the data 

needed to update the distribution sector emission factors. ·

Response: OAR agrees that it is important to review data from existing and ongoing 

studies to determine if new information can be used to update existing emission factors, 

and indeed is already doing so. As already planned through the GHG Inventory annual 

review process and efforts underway in implementing the Interagency Methane Strategy, 

OAR continues to engage with stakeholders as appropriate in continued review of 

distribution sector studies and ongoing evaluation of data for potential updates to GHG 

emission factors and estimates.

Completion Date: FY15, Q3

If you have any questions regarding this response, please contact Paul Gunning, Director,

Climate Change Division in the Office of Atmospheric Programs at (202) 343-9736.

Attachment
14-P-0324 31

cc: Betsy Shaw

Sarah Dunham

Paul Gunning

Pamela Franklin

Suzanne Waltzer

Suzanne Kocchi

Steve Page

Bruce Moore

David Cozzie

Chris Frantz

Amy Branning

Maureen Hingeley

Rick Beusse

Erica Hauck
14-P-0324 32

Appendix B

Distribution

Office of the Administrator 

Assistant Administrator for Air and Radiation

Agency Follow-Up Official (the CFO) 

Agency Follow-Up Coordinator 

General Counsel

Associate Administrator for Congressional and Intergovernmental Relations

Associate Administrator for External Affairs and Environmental Education

Deputy Assistant Administrator for Air and Radiation

Associate Assistant Administrator and Senior Counsel for Air and Radiation

Director, Office of Air Quality Planning and Standards, Office of Air and Radiation

Director, Office of Atmospheric Programs, Office of Air and Radiation

Audit Follow-Up Coordinator, Office of Air and Radiation

Audit Follow-Up Coordinator, Office of Air Quality Planning and Standards,

Office of Air and Radiation