AUSTIN, Texas – The Kay Bailey Hutchison Center for Energy, Law, and Business at The University of Texas at Austin released a report today by Romany Webb, a post-graduate research fellow in the Center, which examines the hidden environmental costs of compensating pipelines for natural gas losses. The report is the first comprehensive analysis of the regulation of lost and unaccounted-for gas across every U.S. jurisdiction. “The existing regulatory frameworks don’t do enough to encourage pipeline operators to reduce gas losses due to leaks” said Professor Melinda Taylor, a senior lecturer at the UT School of Law and the KBH Energy Center’s executive director. “Our report suggests a new approach that would encourage improved leak management, reducing greenhouse gas emissions that accelerate climate change.”
The KBH Energy Center’s report cites numerous studies finding that although substituting natural gas for coal or oil in electricity generation and other applications can significantly reduce greenhouse gas emissions and other air pollutants, helping to mitigate climate change and improve air quality, these reductions are frequently offset by emissions during natural gas production. The report argues that realizing the full benefits of this so-called “clean fossil fuel” will therefore require changes in the production process. It urges action to prevent natural gas – which is comprised principally of methane – leaking from the pipeline system. The report notes that there is, however, currently little incentive for pipeline operators to repair system leaks as the cost of leaked gas can be passed through to ratepayers.
“Pipeline operators can recover the cost of so-called lost and unaccounted-for gas, including gas that escapes through system leaks” said Webb. “Many operators have reported gas losses exceeding ten percent of pipeline throughput, with some reporting losses as high as twenty or even thirty percent. This is incredibly wasteful and poses a serious threat to public safety and the environment.”
What changes need to be made to the current frameworks for recovery of lost and unaccounted-for gas in each U.S. jurisdiction to encourage improved management of pipeline leaks? The report recommends a series of changes to the current frameworks to encourage improved management of pipeline leaks, namely that:
- lost and unaccounted-for gas should be reported based on a standard definition and calculated using a consistent methodology,
- the cost recovery framework should be reformed to incentivize reduction of lost and unaccounted-for gas,
- pipeline operators’ claimed gas losses should be carefully scrutinized, and
- the federal and state regulations should establish an appropriate cap on cost recovery for lost gas.
“These reforms would create a powerful incentive for pipeline operators to improve system management to reduce gas losses” said Webb. “This can help to mitigate greenhouse gas emissions and thereby slow the pace of global climate change.”
View a post summarizing the report on the KBH Energy Center’s Blog.
For additional information, contact Romany Webb at (512) 232-1408 or firstname.lastname@example.org.
About the KBH Energy Center
The Kay Bailey Hutchison Center for Energy, Law, and Business is an innovative interdisciplinary joint venture of the School of Law and the McCombs School of Business at The University of Texas at Austin. The mission of the KBH Energy Center is to provide the finest educational opportunities in the United States to students who wish to pursue careers in energy and to serve as a nexus for incisive, unbiased, and relevant research and analyses for policy makers, with a special emphasis on Latin America.
About Romany Webb
Romany Webb’s current research focuses on managing the environmental impacts of oil and gas production. Webb previously worked at the University of California, Berkeley, where she researched climate change policy. She has also practiced energy and water law in Sydney, Australia.