Gas Utility Infrastructure Upgrades Needed
As background, if the price of oil stays over $70 a barrel – and the Department of Energy predicts $79 to $83 through 2011 – the next two years could be growth years. U.S. gas prices are similarly predicted to run $4.70 to $4.80 per million BTU through 2012. Total gas consumption this year ran 64.7 billion cubic feet per day, may grow to 64.8 billion cubic feet per day in 2011 and may possibly show growth of 2.8 billion cubic feet per day year-over-year by year-end 2012. Projects for new pipeline infrastructure accommodates this growth in consumption but does not replace or maintain the aging infrastructure.
It is a bit difficult to get consistent data on the aging gas pipeline network. The Pipeline and Hazardous Materials Safety Administration (PHMSA) was created in 2004 (P.L. 108-426) as an agency within the Department of Transportation. Within PHMSA is the Office of Pipeline Safety (OPS), the federal authority with oversight for safety of the nearly 2.5 million miles of gas and hazardous-materials pipelines. (Note that throughout this article the pipeline system is composed of transmission and distribution segments; the former is usually high pressure at 1,000 or 1,200 psi, typically to move gas long distances, and the latter for local distribution at low pressure.)
The OPS administers a national regulatory program to assure transportation safety and creates and administers the National Pipeline Mapping System (NPMS). Under provisions of P.L. 107-355 enacted Dec. 17, 2002, pipeline operators (except distribution and gathering pipeline operators) are required to supply NPMS with relevant data on infrastructure under OPS jurisdiction. Today, 99% of data has been submitted to NPMS. Public access to NPMS data was freely available until Sept. 11, 2001. It was then somewhat restricted, but it has now relaxed access criteria since April 2, 2007, with passage of the Pipeline Inspection, Protection, Enforcement and Safety Act. As a result, both federal regulators and industry have made it difficult to know the exact location and/or condition of gas pipelines, something that either confounds and/or cheers many citizens who are aware of these issues.
Federal officials have recorded 2,840 significant gas pipeline accidents since 1990, with more than one-third causing death and significant injuries. The private and independent Pipeline Safety Trust reported that 2,290 events occurred in local distribution pipelines between 2002 and 2009. A total of 3,316 events happened between 2004 and 2009.
Since 2002, utilities are required to inspect pipelines that run through heavily populated areas (termed “high consequence areas”), which contain about 7% or 21,000 miles of the 300,000 mile transmission network. In the first five years, 3,000 problems were identified. Today, regular inspections occur once each seven years, while the utility industry wants to reduce frequency to once each 15 years. Since the OPS has only 100 inspectors nationwide, to a great extent the gas utility sector must inspect and police itself. With 60% of U.S. gas transmission lines being 40 years or older (the pipeline though San Bruno was 54 years old) and with steel pipe life about 50 years, aging infrastructure issues are almost upon us. Also, cast iron pipes still exist and some wooden gas mains remain in use in Pennsylvania.
Steel pipe becomes brittle with age, and under high-pressure operation it is subject to external and internal corrosion. The following are also often experienced: original manufacturing defects in pipe walls, weld defects at the time of field assembly, induced stress during installation and environmental assault during use. The single largest cause of pipe failure is from outside forces (38%) such as errant bulldozer blades on a pipe buried only a few feet deep, rocks used to fill the pipe trench that mar integrity of a pipe wall, water erosion that removes soil support or earth shifts from earthquakes. Construction and/or material defects account for 19% of failures, internal corrosion accounts for 14% and external corrosion accounts for 8%.
With an estimated $10 billion per year planned for new pipeline infrastructure, a 60% gas demand increase by 2020 and growth in electric-utility consumption to 8 TCF over the decade, focus on a rapidly collapsing pipeline system is needed. That makes for new business opportunities for many readers of this journal. IH