Policymakers been systems, looking particularly at new integrity inspections. One of the key questions being raised in these forums is whether there should be a specific integrity inspection interval for natural gas pipelines, and if so, what the appropriate interval should be and what technology should be used. This report examines several pipeline integrity inspection scenarios and attempts to define the impacts of potential disruptions in service on consumers (in dollars) based on these scenarios. This report only covers the costs to consumers due to deliverability constraints and does not include the costs to consumers from modifications of pipeline facilities and the actual inspections, which will be reflected in higher natural gas transportation rates.
The three main types of integrity inspection methods are: 1) internal inline inspection, using "smart pig" devices; 2) hydrostatic testing; and 3) direct assessment. Each of these methods would require the pipeline either to be taken out of service or have pressure reduced (thereby reducing gas deliveries), during the inspection process. The report outlines these inspection options, and attempts to examine how these techniques could be employed.
The interstate natural gas delivery system is modeled in two separate analyses: the mainline system and the delivery lateral system. The price impact to consumers due to pipeline capacity reductions is the sum of mainline and delivery lateral impacts and is dependent on the frequency of testing. The predicted impact ranges from $6.3 Billion for the 14-year inspection cycle to $17.6 Billion for the 5-year inspection cycle.
The price impact of the anticipated integrity rule to consumers is greatest if the direct assessment technology is not used as an option. If the choice is limited to just hydrostatic pressure testing or inline inspection the cost to consumers will be roughly 50% more than those listed above.
In general, the report finds that the cost of disruptions grow exponentially as the timeframe in which to complete the first integrity inspection is shortened from 15 to 5 years. Much of this cost is associated with taking a pipeline out of service for up to 30 days while the pipeline is modified in order to accommodate smart pig devices. Additionally, hydrostatic testing requires a pipeline to be taken out of service during the test, for up to three weeks. In many parts of the country that have only one pipeline delivering gas, such a service disruption would be extremely difficult to manage, as gas service to local businesses and homes would essentially be shut down completely. Even in areas that have multiple pipelines, a reduction in pipeline capacity, even on a short-term basis, can cause price increases if supplies are tight because of high demand. The deliverability impacts vary across the country, with some areas affected significantly more than others and disproportionate impacts occurring to industry and electric power plants. After pipelines are retrofitted to accommodate internal inspection devices, the service disruptions associated with modification and inspection will diminish. One alternative that offers promise is direct assessment, since it would allow a pipeline to maintain operation during an inspection, albeit at reduced pressure.
These cost estimates are conservative and assume optimum conditions and coordination. Variances from these conditions will increase costs significantly. The longer inspection time cycle scenario (14 years) is more forgiving and will allow for contingencies. It should be noted that any integrity inspection requirement will result in disruptions of service and, in the short term, potentially higher natural gas prices for consumers. The key policy objective is developing the most appropriate inspection interval, so that safety is enhanced while, at the same time, maintaining reliable and low-cost natural gas service.
