EPA Should Check up on Leaky Methane Pipelines: Inspector General

Bloomberg BNA —Leaking pipelines were responsible for $192 million worth of lost natural gas in 2011, and a voluntary Environmental Protection Agency program to reduce methane leaks has only provided limited emissions reductions, the Inspector General said in a report.

The Inspector General's July 25 report, “Improvements Needed in EPA Efforts to Address Methane Emissions From Natural Gas Distribution Pipelines,” also found the emissions factors that the EPA uses to calculate methane emissions from the oil and natural gas system are based on a 1996 study that has a high level of uncertainty. The report recommends the EPA work with the Pipeline and Hazardous Materials Safety Administration as it considers regulating methane emissions from pipelines.

The report also recommends the EPA address economic and policy impediments that prevent pipeline operators from voluntarily fixing more leaks and develop a system to better track methane emissions from the oil and natural gas distribution system. Leaks accounted for more than 10 percent of total methane emissions from natural gas systems in 2012, the report said.

Methane is a greenhouse gas that is 25 times more potent than carbon dioxide, according to the EPA.

The EPA issued new source performance standards for the oil and natural gas system in 2012 but chose not to directly regulate methane. The White House ordered the EPA to reconsider that decision as part of a methane strategy announced in March. The agency issued a series of white papers examining strategies to reduce emissions of methane and volatile organic compounds from the oil and natural gas industry April 15.

Stronger Partnership, Incentives Needed

PHMSA regulations give pipeline companies the discretion to determine when they repair leaks and are not intended to mitigate the environmental impact of leaking methane. The Inspector General recommends the EPA, as it develops any future regulations, consult with PHMSA.

“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 report said. “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.”

The report said the EPA's Natural Gas STAR Program, which encourages pipeline companies to take cost-effective steps to reduce methane leaks, has only produced modest emissions reductions from the pipeline sector.

According to the report, the Natural Gas STAR program achieved a total of 66 billion cubic feet in methane emissions reductions from the natural gas industry in 2012 but pipelines only accounted for 1 percent of reductions.

Pipeline operators have little financial incentive to repair leaks that to not pose safety hazards because costs for fugitive emissions are passed on to customers, the report said. Repairing or replacing leaking pipelines is also expensive and would often require approval by state and local public utility commissions before those costs could be recovered. The Inspector General said the EPA has not developed a plan for addressing the regulatory and financial barriers to greater participation in the Natural Gas STAR Program.

EPA Needs Updated Information

The emissions factors the EPA uses to estimate methane emissions from pipelines rely on data from a 1996 study that had only 90 percent confidence that the true average emission rates from the pipelines fell within the range 86,677 standard cubic feet per mile to 390,795 standard cubic feet per mile, according to the report.

The EPA has not done a comprehensive analysis of the emissions factors it uses since that 1996 study, the Inspector General said. The report recommends the EPA review current studies on methane emissions from pipelines to determine if its emissions factors can be updated or improved.

“The EPA should also be more proactive in identifying opportunities to be involved in such studies in the future,” the report said. “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.”

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