Part II: President’s Report Finds Need to Bolster Vulnerable Infrastructure

July 2015, Vol. 242, No. 7

Rita Tubb, Executive Editor

Editor’s note: This second of a three-part series on the first-ever presidential Quadrennial Energy Review 2015 focuses on the safety and vulnerabilities of transportation, storage and distribution (TS&D) infrastructure and methane emissions.

Natural disasters pose a significant safety risk to the nation’s TS&D infrastructure. In 2012, there were 11 weather disasters in the United States costing $1 billion, second only to 2011 for the most on record. Insurance data in the QER reports $22 billion in total losses from weather events in 2013, excluding self-insured losses.

The report noted that while the natural gas TS&D sector is generally less vulnerable than electric power infrastructure, it contains several components that rank high in vulnerability to damage and failure from hazards. These high-ranking components include natural gas transmission pipelines, compressor stations and distribution systems. Disruptions of these components could result in significant outages.

In identifying the vulnerability by type of pipeline, the report said offshore pipelines are most at risk to damage to platforms and risers from storms. During Hurricanes Katrina and Rita, the majority of the offshore pipeline damage occurred at or near platform interfaces. Onshore pipelines are described as vulnerable to landslides and earthquakes. Also, extreme cold temperatures affected natural gas well production and the associated infrastructure; for example, extreme cold in the Southwest in early February 2011 curtailed over 7 Bcf/d of natural gas production due to well freeze-offs.
For the Southwest as a whole, 67% of electric generator failures (by megawatt-hour) were due directly to weather-related causes, including frozen sensing lines, frozen equipment, frozen water lines, frozen valves, blade icing and low-temperature cutoff limits on equipment.

Gas producers and pipelines were also affected in Texas, New Mexico and Arizona. Natural gas production was diminished due to freeze-offs and the inability to reach gas wells (due to icy roads) to remove produced water and thereby keep them in operation. When rolling electricity blackouts hit gas producers and gas pipelines, it had the effect of causing further losses to natural gas supply.

The ERCOT blackouts or customer curtailments contributed to 29% of natural gas production outages in the Permian Basin and 27% of the production outages in the Fort Worth Basin, principally as a result of shutting down electric pumping units or compressors on gathering lines. As a result, natural gas deliveries were affected throughout Texas and New Mexico. Over 30,000 customers experienced natural gas outages during this period.

Another area of concern was aboveground pipelines in Alaska, which are becoming increasingly vulnerable to climate change and its associated temperature increases. This, the report said, is contributing to the thawing of the permafrost, affecting the foundations of infrastructure. This increases pipeline displacements.

Permafrost thawing could have serious implications for Alaska’s energy infrastructure, such as the Trans-Alaska Pipeline System, transmission lines, fuel storage tanks, generators and other large infrastructure. It is estimated permafrost thaw could add between $3.6 billion and $6.1 billion (10-20%) to current costs of maintaining public infrastructure – such as buildings, pipelines, roads and airports – over the next 20 years.

Although pipelines above and below ground represent a highly dispersed element of the energy system that, like electric transmission lines, are difficult to protect, the underground portion of pipelines generally are difficult for non-professionals to locate; this reduces the possibility of physical attacks. The exception for pipeline systems is aboveground compressor stations. In addition, depending on severity, earthquakes could have a major or catastrophic impact on both transmission and distribution pipelines.

Cyber-Incidents

Cyber-incidents pose challenge as well, according to the report. There have been cyber-incidents on natural gas systems, notably between February and March 2013. During this period, there were brute force attacks, such as efforts to obtain passwords and personal identification numbers, on a natural gas compressor station, resulting in a warning from the Department of Homeland Security to gas system and other critical infrastructure operators.

This alert prompted reports of similar activities, broadly from gas system operators in the Midwest and the Plains. These attacks, while unsuccessful, continued for more than two weeks. Vulnerabilities affecting natural gas resilience and reliability likely will grow given the increasing reliance of gas infrastructure on electricity and other electricity-dependent infrastructures, such as telecommunications.

Underground Storage Susceptibility

In 2012, there were 414 underground natural gas storage sites in the nation. About 380 of the facilities were primarily used to meet seasonal winter demand. The remaining are high-deliverability facilities used to inject and flexibly withdraw large natural gas volumes over short periods.

In general, the QER said underground gas storage facilities are well-protected from accidents or malicious acts and generally insensitive to natural events, such as earthquakes, owing to the depth of underground storage and the design of the systems connecting the storage to the surface. However, the U.S. natural gas profile could change the economics of gas storage. Shale gas production has increased and gas price volatility has decreased, which may diminish economic incentives for storage.

Gas Pipeline Incidents

Most safety incidents involving natural gas pipelines occur on the natural gas distribution system. These incidents tend to occur in densely populated areas. Excavation damage is the leading cause of serious incidents along natural gas pipelines, although significant and preventable contributors include equipment failure, incorrect operation and pipeline corrosion. Incidents are relatively infrequent, but increase as systems age.

Methane Emissions

The report found the nation’s natural gas distribution systems account for about 20% of methane leaks from gas systems. Moreover, emissions from local distribution systems come largely from two sources – leak-prone pipelines and meters and regulators at city gates. Together, these represent 70% of methane emissions from distribution systems.

The QER found the most leak-prone distribution pipeline materials are cast iron and bare steel, accounting for 9% of distribution pipes in the United States and resulting in 30% of methane emissions from natural gas distribution systems. Only a small portion of gathering lines are subject to reporting requirements. As a result, reported gathering line incidents are thought to be significantly underestimated, the report said.

Leak-Prone Distribution Mains

According to the report, all regions of the country have some leak-prone distribution pipeline networks. Table 2-2 presents the top 10 states with the most miles of leak-prone distribution mains. The QER indicates the magnitude of investment needed to replace all leak-prone distribution mains nationwide is more than $270 billion.

Despite progress in many states to help the replacement of leak-prone pipes in distribution networks, some have limitations, and many place caps on the magnitude of investments eligible for cost recovery and/or on the size of rate increases. Even with such special cost-recovery mechanisms, at least one dozen utilities will require two decades or more to replace their leak-prone pipeline.

Other Leak Sources

Other sources of leaks include “city gate” station facilities that connect long-distance interstate transmission pipelines to local distribution networks. These account for 40% of methane emissions from natural gas distribution systems. A recent study found in cases in which companies had invested in upgrades, emissions from city gate stations in 2013 declined to a fraction of emission levels measured at the same stations in 1992.

Conversely, the one station that had not invested in upgrades over this 20-year period saw a 40% increase in estimated emission levels, illustrating the environmental benefits of such investments.

The EPA’s Natural Gas STAR program encourages voluntary actions to address these losses through directed inspection and maintenance programs that include leak detection and repair measures. Installing state-of-the-art measurement technologies could assist in leak management.

In addition, the QER estimates quarterly leak detection and repair, which requires little capital investment and could be increased quickly, could reduce emissions from city gate stations by 60%.

The August issue of P&GJ will feature the third and final installment on the QER and will focus on gas system dependencies on electricity and the environmental effects associated with TS&D infrastructure.

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