The Obama administration on Tuesday proposed spending as
much as $3.5 billion to replace aging natural gas pipelines nationwide — a move
that comes just as POLITICO published a lengthy investigation of the public
safety threat posed by pipelines and the numerous problems plaguing the federal
agency that regulates them.
The announcement, included in a 348-page government report examining how to
upgrade a vast array of the country’s energy infrastructure, is aimed at
addressing the dangers to both public safety and the climate from pipelines
that leak or rupture.
But the amount of money the administration is proposing
is just a fraction of what it would take to replace the hundreds of thousands
of miles of decades-old cast-iron and bare-steel natural gas distribution pipes
— the lines that are considered most vulnerable to ruptures. A full replacement
would cost $270 billion, the report says. And the whole proposal immediately
ran into GOP skepticism.
The report, from a sprawling Energy Department study
called the Quadrennial Energy Review, calls for creating a DOE program to offer
states financial incentives to replace and repair their aging infrastructure,
while cutting greenhouse gas emissions from distribution lines that carry
natural gas to homes and businesses. The price tag would be $2.5 billion to
$3.5 billion over 10 years.
A cloud of black smoke billows from Whatcom Creek after a
gasoline pipeline leaked more than 200,000 gallons of fuel into the creek and
ignited, June 10, 1999.
POLITICO’s analysis of federal pipeline data found that
the older lines are a major part of the problem. Since 2002, about a quarter of
all reported pipeline incidents involved failed parts that had been installed
before 1970, including 91 incidents in which the parts were at least 80 years
old. During the past 12 years, spills, breaks and other accidents from all gas,
oil and hazardous liquids pipelines caused a total of more than $5.5 billion in
damage.
While the Energy Department has the authority to create
the program, it would rely on Congress to approve the money — setting up a
clash with Republicans who see little reason to flood the administration with
cash to fix a problem that the industry is already touting its progress in
tackling. GOP lawmakers quickly bashed the DOE report’s recommendations across
the board.
A senior Republican aide, speaking on condition of
anonymity, said it’s “not likely” that the administration would get Congress to
sign off on its ambitious pipeline program. Within the industry, the aide said,
“they don’t need grants; they need permit and [regulatory] certainty.”
Matt Sparks, a spokesman for House Majority Leader Kevin
McCarthy (R-Calif.), pointed to three oil and gas infrastructure bills that the
chamber has already passed with Democratic support this year, including a
measure that President Barack Obama vetoed that would have approved
construction of the Keystone XL oil pipeline. “If the administration is serious
about securing our energy future, a good start might be” by working with
Republicans on those bills, he said by email.
Still, the administration remains hopeful that it can
find a compromise with Congress on a pipeline replacement program that would
pay job-creation as well as environmental dividends, particularly as
Republicans work on broad energy legislation. “We are eager to engage with
Congress and see if we can find common ground,” White House energy and climate
adviser Dan Utech told reporters on a conference call earlier Tuesday. “We
think this is a really important area for working together.”
Former National Security Council energy adviser Jason
Bordoff, the founding director of Columbia University’s Center on Global Energy
Policy, said both parties should be able to agree on the administration’s call
for addressing “crumbling gas pipelines” and the report’s other
recommendations.
“These aren’t things that should be partisan issues,” he
said. “It’s obviously hard to come up with money in today’s environment, but
these are things that are necessary to do.”
An Energy Department official said DOE will not include
the program in its fiscal year 2016 budget request. The department plans to
work on designing the program this year and anticipates requesting funding in
fiscal year 2017, the official said.
The administration’s proposal would encourage states that
are replacing older pipelines to focus their spending on averting electricity
rate increases, and lower-income ratepayers would get up to four years of aid
to deal with potential price hikes stemming from the replacement program.
That emphasis on lower-income Americans left some in the
industry wondering why DOE hopes to create a new way to give electricity rate
relief that the government already provides through HHS.
“More than anything, we’re puzzled by this request,
because it’s such a convoluted approach when there’s such an obvious solution —
funding the documented need in” the HHS Low Income Home Energy Assistance
Program, said an industry source tracking the proposal who addressed it on
condition of anonymity.
The Energy Department would set guidelines to evaluate
the applications based on their expected benefits to public safety, cost
effectiveness and the degree to which the proposal will cut emissions of
methane — a greenhouse gas that’s shorter-lived than carbon dioxide but over 20
times more potent.
“While I am pleased to see the continued Administration
support for natural gas in our clean energy future, it is critical to recognize
the significant work already underway, and the contributions current industry
efforts are making,” American Gas Association President Dave McCurdy said in a
statement on the DOE report.
Green groups that have long pushed for greater government
and industry investment in upgrading natural gas pipelines cheered DOE for
highlighting the issue. Natural Resources Defense Council senior policy analyst
Carl Zichella pointed in an interview to the “huge public safety implication”
of a multibillion-dollar program to tackle “aging infrastructure that’s
becoming increasingly dangerous.”
Indeed, the DOE report says most natural gas pipeline
accidents occur on distribution lines located near dense population centers.
Cast-iron and bare-steel pipelines account for 9 percent of the country’s
distribution pipelines even while they result in 30 percent of methane
emissions from gas distribution systems, the report said.
DOE projects that investments in interstate natural gas
pipelines will range between $2.6 billion and $3.5 billion annually over the
next 15 years.
Modernizing pipelines also would pay dividends for
Obama’s climate agenda, given the propensity for older infrastructure to leak
methane. Environmentalists note that one-third of the leaks that persist come
from older lines that are prevalent in the northeast, where Massachusetts
Democratic Sen. Ed Markey hailed the DOE report on Tuesday and vowed to
reintroduce legislation that would speed up replacement of aging pipes.
N. Jonathan Peress of the Environmental Defense Fund
noted in March that although the industry has upgraded almost 40 percent of the
most out-of-date pipelines as of 1990, the majority of them are still in
operation “and still leaking.”
Rob Jackson, a professor of environmental sciences at
Stanford who has studied pipeline infrastructure, called the QER recommendation
a “great first step.”
President Barack Obama is pictured. | Getty
“There are many reasons to repair and replace these old
pipelines and climate change, methane emissions, that’s only one reason,” he
said in an interview. “Pipeline replacement programs will improve consumer
safety, improve air quality and create jobs as well.”
He estimated that a major campaign to replace the
country’s aging pipeline infrastructure would take at least 10 to 20 years.
Darren Goode contributed to this report.
Source: Politico
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