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Safety Key to Plugging Methane Leaks, Regulators Say

While there is no consensus on the causes or the best way to deal with the problem of methane emissions, state officials said Wednesday that recent major pipeline failures have put much more emphasis on accelerated programs to beef up gas pipeline safety.

Economic and environmental considerations are also contributing factors, but safety is the key.

This was one of the conclusions emerging from a 90-minute teleconference on "Lost and Unaccounted-For (LAUF) Gas," hosted by Maryland-based National Regulatory Research Institute (NRRI) Principal Researcher Ken Costello, who earlier in the year authored a definitive study of LAUF and U.S. gas utilities (see Daily GPI, Aug. 12).

Safety concerns are focusing the attention on repairing and replacing parts of the nation's aging pipeline infrastructure, but the pace for completing the job can't be accelerated any faster, according to at least one of the state regulators discussing the topic. The new-found emphasis is already lowering percentages of LAUF from state to state, they said.

"Up until Allentown [PA] and San Bruno [CA] a few years ago (see Daily GPI, Feb. 16, 2011; Sept. 13, 2010), there was definitely a build up of a lot of highly aged infrastructure, so since those incidents states like mine have tried to accelerate efforts to get this out-of-date infrastructure replaced," said Paul Roberti, a member of the Rhode Island Public Utilities Commission.

"We're finally getting on a track to get this old infrastructure, which also has higher leak rates, out of the system, but it is going to take a couple of decades to complete," Roberti said. "So the extent to which you can narrow LAUF gas to the physical [pipeline] loss is going to allow for a lot of headway to be made on this issue in the next couple of decades, but that pace can't really be accelerated beyond what it is right now."

Cost is a factor in making the infrastructure turnaround, he said, noting Rhode Island is in the midst of a 20-year pipe replacement effort. "The rate impact and public safety outcome really don't allow us to take a more accelerated pace than what we are doing, but we are making headway, and we'll make a lot more in the next two decades, and I would expect the numbers [percentages of LAUF] to trend downward.

"With the current spotlight [since San Bruno and Allentown], we have seen an immediate trend down. Utilities and regulators are starting to look at this more."

Paul Metro, a staff member with the Pennsylvania Public Utility Commission, agreed with Roberti, saying that "as utilities implement pipeline replacement programs, I believe we will see the LAUF numbers come down.

"We look at the cost of getting the back pipe out of the ground and know it is going to cost some money, but on the other hand we are going to save some money [$35-121 million] in LAUF that ratepayers pay for," Metro said. "There is a cost-benefit consideration associated with whether to remove the bad pipes or spend money on LAUF, but I think they are connected."

Nationally, some recent studies have estimated that the cost of lost gas supplies in the LAUF category has equaled about $2 billion during the past 10 years, NRRI's Costello said.

Joe Rogers, a member of the attorney general's office in Massachusetts who handles state energy regulatory issues, said it's a matter of looking for where a state can get "the biggest bang for its buck" in adding new pipe.

"Do you do it by replacing mains or spend more on energy efficiency and renewables?”  States have a choice, and Rogers thinks that efficiency and renewables will have more direct benefits in eliminating greenhouse gas (GHG) emissions.

The speakers varied on how to count leak volumes from the gas utility infrastructure. Metro said the Pennsylvania PUC is comfortable with equating LAUF with leak volumes; Rogers and Roberti were not; and a fourth speaker, Gary Smith, director of regulatory affairs for multi-state gas utility operator Atmos Energy, stressed that leaks are a small part of LAUF.

"We, like most gas distributors, think that the largest contributing factor of LAUF is really measurement uncertainty and that leaks are not the majority of the category," said Smith, who added that Atmos has experienced "notable differences" in meter reads between receipts of gas and the amounts delivered to customers among its different utilities spread over eight states.

Smith said there are notable differences in the amount of LAUF attributable to leaks among different utilities and different piping materials.

"If you have older pipe using older materials, the chances are the LAUF totals for that system would be a little bit greater than others," he said.

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