June 16, 2014 

To: U.S. EPA Office of Air Quality Planning and Standards

Submitted via electronic mail: oilandgas.whitepapers@epa.gov

Re: AGA Comments on EPA Methane White Paper: Oil and Natural Gas Sector Leaks

___________________________________________________________________________ 

The American Gas Association (AGA), founded in 1918, represents more than 200 local 

energy companies that deliver clean natural gas throughout the United States. There are more 

than 71 million residential, commercial and industrial natural gas customers in the U.S., of which 94 

percent — over 68 million customers — receive their gas from AGA members. AGA is an advocate 

for natural gas utility companies and their customers and provides a broad range of programs and 

services for member natural gas pipelines, marketers, gatherers, international natural gas 

companies and industry associates. Today, natural gas meets more than one-fourth of the United 

States' energy needs.

AGA appreciates the opportunity to comment on the Environmental Protection Agency’s 

(EPA) technical white paper on “Oil and Natural Gas Sector Leaks” (Leaks Paper). This is one of 

five technical white papers that EPA released on April 15, 2014 for external peer review relating to 

“potentially significant sources of methane and volatile organic compounds (VOCs)” from the oil 

and natural gas sector – focusing on operations upstream of natural gas distribution systems. The 

five white papers evaluate emissions from: (1) production well completions; (2) production well 

liquids unloading; (3) compressors; (4) pneumatic devices; and (5) equipment leaks “upstream of 

natural gas distribution systems.” 

Since AGA represents natural gas utility companies that operate local distribution systems, 

the white papers have limited direct applicability to our members’ core business. However, we are 

concerned that some of the broad assumptions made in the white papers, particularly in the Leaks 

Paper, are not valid with respect to distribution and could indirectly impact distribution operations. 

We file these brief comments to clarify the record and avoid later misunderstandings.

Natural Gas Emissions from Distribution Systems Are Low and Declining

At the outset, some context may be helpful. Natural gas emissions from the distribution 

sector are already low and declining as a result of our members’ focus on modernizing distribution 

systems to ensure safety and reliability. Only 0.24 percent of annual produced natural gas was 

emitted from distribution systems nationwide in 2012, based on estimates in EPA’s most recent 

Inventory of Greenhouse Gas Emissions and Sinks (1990-2012) published April 15, 2014 (2014 

Inventory). This compares with an estimated 1.3 percent across the entire value chain, from 

production to customer. 
AGA Comments on EPA Methane Leaks White Paper

June 16, 2014

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We believe the actual percentage is even lower than 0.24 percent, and that the 2014 

Inventory is over-estimating emissions from distribution because the Inventory relies on emission 

factors developed from field measurements made 20 years ago by the Gas Research Institute 

(GRI) in a methane study for EPA. This study remains the seminal work on methane emissions 

from the industry. However, since that time, there have been significant changes in technologies, 

systems and practices due to pipeline safety regulations, integrity management programs, and 

voluntary actions our members have taken to reduce emissions through their participation in EPA’s 

Natural Gas STAR program. 

In 2013, AGA and 13 of our member companies participated in a multi-city study by

Washington State University (WSU) in collaboration with the Environmental Defense Fund (EDF) to 

measure methane emissions from natural gas distribution systems across the country. These 

thirteen LDCs are representative of operations in the different regions of the U.S., operating about 

19 percent of the distribution pipeline mileage across the country, 26 percent of the services, and 16 

percent of the total natural gas delivered to customers.1

The WSU multi-city distribution study will provide a larger set of measurements than the 

GRI-EPA study, and the measurements will reflect the lower emissions that result from current 

equipment and practices as compared to those in place 20 years ago – prior to the work done 

through the EPA Natural Gas STAR program and the enhanced integrity management programs 

called for by recent pipeline safety statutes and regulations. We anticipate the results of the WSUEDF study will be available in fall 2014. 

Even using the old, inflated GRI emission factors, EPA’s 2014 Inventory demonstrates that 

emissions from distribution systems have been steadily declining since 1990. 

In the past 25 years, natural gas utilities have installed modern polyethylene (PE) plastic 

distribution mains used for delivering gas at low pressure at a rate of 30,000 miles per year, and 

cathodically protected steel mains used for high pressure delivery at a rate of 1,500 miles per year, 

both connecting new customers and upgrading existing pipeline infrastructure. Replacing cast iron 

and unprotected steel mains, based on the pipe’s fitness for service, with modern materials has 

yielded significant emission reductions. Based on EPA’s 2014 Inventory, emissions from natural 

gas utility distribution systems have dropped 22 percent since 1990, even as the number of 

customers served has increased by 32 percent. Nearly 90 percent of the emission declines from 

distribution systems since 1990 are due to pipeline replacements.

1 Based on DOE EIA data in 2011.

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AGA Comments on EPA Methane Leaks White Paper

June 16, 2014

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Distribution Utilities Are Accelerating This Declining Trend

We are not resting on our laurels. AGA’s members all have programs for modernizing their 

systems and implementing integrity management programs, and many have worked with their utility 

commissions to speed-up the pace of pipe replacements. 

As regulated utilities, our members must obtain approval from their state utility commissions 

to recover the costs of pipe replacement programs. It is important to remember that state utility 

commissions are economic regulators. They must balance the need for infrastructure investments 

with the cost to consumers. It costs roughly $1 million to $5 million on average and as much as $10

million in highly urban areas to replace a mile of distribution main, depending on its location and other 

factors. State utility commissions must consider how many miles of pipe can be replaced per year -

- while ensuring affordable energy bills for customers, reliable service, and fair returns on equity that 

will attract capital at reasonable costs. While pipe replacement has a beneficial impact on emissions, 

the utility commission must focus on balancing these important economic concerns. 

AGA is pleased that 38 states have adopted specific accelerated infrastructure replacement 

mechanisms to allow natural gas distribution utilities to recover the costs of accelerated replacement 

on a timely basis. AGA supports the expansion of these programs to include all utilities operating in 

these states, as well as the adoption of similar programs by additional states.

AGA Has Adopted Guidelines for Reducing Natural Gas Emissions

In addition, on May 17, 2014, AGA’s Board of Directors approved AGA’s Voluntary 

Guidelines for Reducing Natural Gas Emissions, which describes a list of effective practices that a

natural gas distribution company may use in appropriate circumstances to continue the trend of 

declining natural gas emissions. It provides general guidelines to assist our member companies in 

developing their own company-specific procedures. The listed measures include: (1) modernizing 

distribution systems by replacing cast iron, unprotected steel or other distribution lines based on the 

pipeline’s fitness-for-service; (2) replacing high-bleed pneumatic valves and pilot regulators; (3)

enhancing excavation damage prevention programs; (4) reducing venting during pipe repair or 

replacement programs; and (5) conducting annual directed inspection and maintenance (DI&M) at 

custody transfer city gate stations and metering and pressure regulating (M&R) stations. 

Many AGA member gas distribution utilities are also long-time partners of EPA’s Natural Gas 

STAR program and active participants in that technology transfer program. AGA looks forward to 

our continued collaboration with EPA in this 20-year partnership to identify and share effective 

practices for methane emission reduction.

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AGA Comments on EPA Methane Leaks White Paper

June 16, 2014

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Distribution Emission Reductions Are Costly, But Integral to Utilities’ Safety Focus

A recent cost study by ICF International for the Environmental Defense Fund found that while 

there are cost-effective and even profitable options for reducing methane emissions in upstream 

operations based on the value of recovered methane, this is not true for distribution. See “Economic 

Analysis of Methane Emission Reduction Opportunities in the U.S. Onshore Oil and Natural Gas 

Industries” (ICF International, 2014). Considering that replacing distribution pipe costs approximately

$1 million to over $3 million per mile, the ICF study concluded that replacing distribution pipe could 

not be cost justified purely for the purpose of reducing emissions.2 However, ICF noted that utilities 

are nevertheless replacing pipe to modernize their systems and meet pipeline safety goals, and that 

this is also helping to reduce emissions. The ICF study also evaluated enhanced leak detection and 

repairs at M&R stations, but the cost of this measure was literally “off the chart” at an estimated 

$19.75 per Mcf – more than four times the current Henry Hub price for natural gas.3

 ICF did not 

include this measure when calculating an average cost of one cent per Mcf for all the other measures 

evaluated – which were all applicable to operations upstream of the distribution system. 

Leaks Paper Assumes Incorrectly that Leak Repair Is “Almost Always Economical”

In the summary for the Leaks Paper (section 4.0), EPA asserts that “[a]vailable information 

suggests that once a leak is found it is almost always economical to repair the leak. According to 

the studies reviewed, the cost of detecting the leak is generally far larger than the cost of fixing the 

leak.”4

This statement is not accurate with respect to leak detection and repair in distribution 

systems. Standard leak detection is performed regularly as required by federal and state pipeline 

safety regulations and state utility commission requirements. The equipment used need not be costly 

and can detect very small leaks – including those that are not considered hazardous. Leaks are 

graded based on safety. Grade 1 leaks are considered hazardous and must be repaired 

immediately, which is defined as within a few hours. Grade 2 leaks are not hazardous but have the 

potential, over time, to become hazardous. These leaks can be scheduled for later repair but would 

typically be repaired within a few weeks. Grade 3 leaks are not considered hazardous and are 

monitored. These non-hazardous leaks are either barely perceptible or located far from occupied 

buildings, or both. In addition, utility personnel typically repair nearly all above ground grade 2 and 

even grade 3 leaks on the spot, even small leaks that are barely detectable, if it is possible to do so 

2 See ICF Cost Study at page 3-23. 3 See ICF Cost Study, Executive Summary, Page 1-2.

4 Leaks Paper, at page 55. 

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AGA Comments on EPA Methane Leaks White Paper

June 16, 2014

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with simple hand tools, e.g. by tightening a fitting with a wrench. To get a sense of the size of a 

typical grade 3 leak, consider that in order to pinpoint their location on above ground equipment, a 

standard procedure is to apply soap solution and wait up to 30 minutes for the methane to slowly 

produce tiny soap bubbles.

Given that distribution utilities already repair grade 1 and 2 leaks as required by pipeline 

safety regulations, and typically grade 3 leaks if they are on above ground equipment and the repair 

can be performed with hand tools, that leaves only grade 3 non-hazardous leaks on buried 

distribution pipe. 

Below ground repairs can require obtaining permits to disrupt traffic, cutting off gas service 

to customers, excavating to gain access to the pipe, removing gas from the line for safety, which in 

fact may emit more methane than the original leak, making the repair, and restoring pavement 

afterward. Based on a 2011 survey of AGA members, this process can cost $20 to $14,500 per pipe 

leak repair. The median cost, based on the 2011 survey, was about $1,140 per leak. The cost for 

a particular leak repair depends on the location, labor costs for the time required, the size of the 

excavation, and the type of material or pavement that must be excavated and replaced. In light of 

these costs and the fact that methane may have to be vented in order to perform the repair, the 

question becomes whether it is sensible to devote resources to make multiple small repairs for nonhazardous grade 3 leaks, or to direct those resources to current or accelerated programs to replace 

pipe based on its fitness for service, at a pace approved by the state utility commission. In any event, 

given the cost of making repairs to address very low grade, non-hazardous leaks on buried pipe, it 

certainly cannot be said that it is “almost always economical to repair” these leaks based on the value 

of recovered product. 

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AGA Comments on EPA Methane Leaks White Paper

June 16, 2014

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AGA urges EPA to revise the Leaks Paper to make it clear that it is often not economical to 

repair small, non-hazardous leaks on distribution systems based on the value of recovered methane 

alone, and that by law, hazardous leaks are already repaired promptly pursuant to pipeline safety 

regulations. We also urge EPA to note at the outset of the Leaks Paper that emissions from 

distribution systems are already quite low and declining, and that utilities are taking proactive steps 

to modernize their distribution systems and continue the declining trend in emissions.

Thank you for the opportunity to comment.

Respectfully Submitted,

Pamela Lacey

Senior Managing Counsel, Environment 

American Gas Association 

400 N. Capitol St., NW 

Washington, DC 20001 

202.824.7340 

placey@aga.org

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