Safety First, Environment Last: Improving Regulation of Gas Pipeline Leaks

Domestic natural gas production has increased significantly in recent years, with technological advances enabling the development of vast shale gas reserves previously considered inaccessible. Increased shale gas development has had many benefits, enhancing energy security, reducing consumer costs, and stimulating economic growth. However, it has also presented new challenges, particularly for environmental management. Natural gas is often touted as a “clean” fossil fuel. Supporters emphasize that, compared to coal and oil, the combustion of natural gas produces fewer emissions of mercury and other air toxins that threaten public health. Moreover, natural gas combustion also results in fewer climate-damaging greenhouse gas emissions than coal or oil. These savings at the point of combustion may, however, be offset by greenhouse gas emissions further up the supply chain. Methane – a short-lived but potent greenhouse gas – is released throughout the natural gas production process. Significant releases occur during the transportation of natural gas, including as a result of leaks from aging pipelines. Much of the pipeline system was installed over forty years ago and has degraded over time. Corrosion and graphitization have led to cracking of pipelines, resulting in gas leakage. Recognizing this, the Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) has called on pipeline operators to accelerate the replacement of aging pipeline systems. While some progress has been made, it is likely to be several years before operators complete all replacement work. In the interim, significant amounts of natural gas may be lost as a result of leaks from aging pipelines. Moreover, even after those pipelines are replaced, leakage may continue due to cracks and/or other defects in newer systems. Pipeline leaks present a major risk to public safety and cause significant environmental damage. Seeking to minimize these adverse impacts, the PHMSA has adopted regulations governing leak detection and repair under the Natural Gas Pipeline Safety Act of 1968 (49 U.S.C. § 1671 et seq.). The Act requires adoption of regulations that are “designed to meet the need for gas pipeline safety . . . and protecting the environment.” The current regulations do not, however, achieve these dual purposes. Rather, the regulations focus primarily on minimizing risks to public safety and do little to advance environmental outcomes. The PHMSA now has an opportunity to enhance regulation of gas leaks so as to provide for greater environmental protection in accordance with the Natural Gas Pipeline Safety Act (49 U.S.C. § 1671 et seq.). In January 2015, as part of its efforts to curb methane emissions from natural gas production, the Obama Administration announced plans to update the regulations. To inform the update process, this White Paper analyzes the current regulations with respect to leak detection, repair, and reporting. It recommends changes to those regulations designed to encourage improved leak management. These include: Pipelines should be regularly inspected for leaks. Federal regulations currently require pipeline operators to conduct system inspections to detect leaks. Frequent inspections must be conducted, one or more times per year, in business districts and other populated areas. In more remote locations, however, several years may elapse between inspections. Consequently, in those locations, leaks may go undetected for extended periods. To ensure prompt leak detection, all pipelines should be inspected for leaks at least annually. More frequent inspections may be required for pipelines at high risk of gas leakage. Leaks detected on the pipeline system should be repaired promptly. Pipeline operators classify leaks based on the risk they pose to public safety. The most serious leaks, classified as hazardous to the public, must be repaired promptly. Leaks classified as non-hazardous can, however, generally be left unrepaired. The classification of a leak is based largely on its proximity to buildings, rather than its size. Thus, leaks in isolated areas may be classified as non-hazardous and left unrepaired, even if they release substantial amounts of natural gas. Going forward, pipeline operators should be required to repair all large leaks (regardless of location) immediately and smaller leaks within one year of detection. It is likely to be simplest to include this requirement in the federal regulations; however, the requirement could also be incorporated into state pipeline safety rules. Gas losses due to pipeline leaks should be measured and reported. Pipeline operators are required to report, to the PHMSA, the number of leaks repaired each year. Notably however, operators generally do not report the number of unrepaired leaks. Moreover, operators do not quantify the volume of gas lost through such leaks. This makes it difficult for regulators and others to assess the extent of gas leakage. To facilitate such assessment, operators should be required to accurately measure the volume of gas lost through leaks. The results of these measurements should be reported to the PHMSA. The PHMSA should make the reported measurements available to other interested parties.