The Interstate Natural Gas Association of America (INGAA) serves as a liaison among its member companies and within the pipeline industry to promote the use of best practices in the construction and operation of pipelines, with an ultimate goal of zero pipeline safety incidents.

Encouraging pipeline safety

INGAA is comprised of 26 members, representing the vast majority of the interstate natural gas transmission pipeline companies in the United States, and comparable companies in Canada. INGAA’s members operate approximately 321,868 km of pipelines, and serve as an indispensable link between natural gas producers and consumers.

To encourage members to collaborate for the improvement of the pipeline industry, INGAA has comprehensive safety efforts. Last December, INGAA’s board of directors established a board-level task force to pursue ways to achieve additional improvements in the industry’s safety performance and build public confidence in natural gas pipeline infrastructure.

In March 2011, INGAA members formally adopted a set of guiding principles for pipeline safety, anchored by the core goal of zero incidents – a perfect record of safety and reliability for the national pipeline system.

In July, INGAA outlined and committed to a concrete plan for putting these principles into practice. The plan includes a commitment to expand risk management beyond high-consequence areas (which represent about 6 per cent of natural gas transmission pipeline mileage) to the entire pipeline system operated by INGAA members.

INGAA President and Chief Executive Officer Don Santa said “We will prioritise the expansion beyond highly populated areas based on population in an effort to reduce risk to people and property. This is just phase one of our action plan; INGAA members intend to work continuously on safety and will make additional commitments moving forward.”

Looking forward – key challenges

Pipeline safety will remain the leading issue for INGAA and its member companies in 2012.

“Safety is a cornerstone of all we do, and we have committed to improve continuously in our safety performance, with a goal of zero pipeline incidents. Work by the board-level task force on pipeline safety, as well as the working groups established to address these issues in detail, continues. We will challenge ourselves every day to find ways to continuously improve our safety,” Mr Santa said.

This year, INGAA is focused on legislation in the US Congress to reauthorise the Pipeline Safety Act. The association should have a better idea of the status of this legislation soon. The Senate unanimously passed a bill in October 2011, and two House Committees are working to approve a bill before the end of the year.

“The question now is whether there is political will (with so many other issues facing the Congress, most specifically jobs, the slow economic recovery and debt and budget concerns) to see this – or, really, any non-economic – bill passed this year,” Mr Santa said.

The US Pipeline and Hazardous Materials Safety Administration (PHMSA), the industry’s main safety regulator, is also moving forward with pipeline safety rules. INGAA anticipates that it will spend considerable time later this year and all of next year responding to, and working with, PHMSA on proposed new pipeline safety regulations.

It is also increasingly important that the pipeline industry communicates effectively with the public and all of its stakeholders, including first responders, consumer advocates, and federal state and local officials, about INGAA’s safety efforts.

Mr Santa said “We must encourage active participation by all affected stakeholders in pipeline safety programs so that we can work together to reduce the risk to both the public and pipelines.

“We endorse Dig Safe programmes and the Pipeline and Informed Planning Alliance, which has developed recommended practices for development adjacent to transmission pipelines in order to help communities make informed land-use decisions.”

Promoting expansion

Another key challenge INGAA foresees will be to ensure that the regulatory and investment climate continues to promote the level of pipeline expansion that will be needed to accommodate both growing natural gas supply, from the prolific shale gas areas, and growing demand for natural gas, largely for power generation.

“The good news is that the North American natural gas industry has a proven track record of constructing and financing this level of infrastructure,” Mr Santa said.

According to Federal Energy Regulatory Commission (FERC) data, interstate pipeline expenditures alone met or exceeded $US8 billion per year in three of the years between 2006 and 2010. INGAA says that this is a strong indication that the industry can, and will be, able to meet the nation’s gas infrastructure needs, especially with a certain and strong regulatory structure, managed by FERC, to promote such development.

Sparking opportunity

Integration of the gas and electricity systems will be another challenge, but it also is a great opportunity for the natural gas transmission industry. Increased use of natural gas for electricity production, especially during peak gas pipeline transportation periods, has raised concerns about the continued ability of electric generators to rely on interruptible transportation capacity for all of their needs, particularly if the generator is dedicated to serve core electric reliability needs.

Natural gas pipelines have demonstrated their flexibility in responding to the operational needs of electric generators, including the pressure swings caused by the need for peaking generators to ramp up their plants with little notice.

A key challenge moving forward is ensuring that electric generators that are relied upon for electric reliability are incentivised to subscribe to, and are compensated for, firm pipeline transportation contracts needed to ensure that they have the natural gas transportation they require to generate power, especially during peak-demand periods. The current wholesale electric pricing model does not reward generators for holding firm pipeline transportation.

In the future, this problem may not be limited to the winter months when natural gas distribution companies most fully utilise their entitlements to firm pipeline capacity. For example, because pipeline capacity is available on an interruptible basis during the summer (when traditional heating load-sensitive local distribution companies do not need their pipeline capacity), generators have often relied successfully on interruptible transportation capacity.

Yet as greater numbers of generators use pipeline services during the summer, the ability to rely on interruptible transportation capacity will be less assured. Since gas usage for electric generation is by all accounts likely to increase, it is imperative that the gas and electric industries work together to address how to provide electric generators with the cost assurance they need to be able to be reliable.

Safety as priority

Safety remains the priority issue for INGAA member companies now – and in the future. Key issues on integrity and maintenance include the expansion of the Integrity Management Programme that was mandated as the result of the 2002 renewal of the Federal Pipeline Safety Law. Baseline assessments under that programme must be completed by next year.

Mr Santa said “The question now is: What can we do to take integrity management to the next level? In July, INGAA committed to expand risk management beyond High Consequence Areas to the entire pipeline system operated by INGAA members and prioritised that expansion based on population in an effort to reduce risk to people and property.

“We recognise that the next generation of pipeline testing technology, including in-line inspection technology, must be developed to allow us to apply risk management to our entire systems.”

INGAA also sees a need to improve data collection. To that end, INGAA members have committed to improving data collection and analysis, and converting this data into meaningful industry information and communicating it to stakeholders.

Committed to enhancing threat assessment, INGAA members have completed a comprehensive review of consensus threat and mitigation standards and conducting critical, in-depth reviews of significant threats and root-cause analysis of incidents.

“Probably the most important issue, and commitment, on the part of our member companies is the commitment to foster a culture of continuous improvement.

“INGAA members have agreed to raise the standard for using management systems across the gas transmission industry to ensure better control of pipeline integrity and system reliability and to provide guidance about the practices and indicators that will be used to improve and measure performance,” Mr Santa said.

Interweaving environment protection

Environmental protection is interwoven through every stage of pipeline planning and construction, and it is a significant part of the review of pipeline applications that is performed by FERC and other agencies.

A comprehensive approach to environmental issues and the mitigation of environmental impacts shapes the process of planning for and seeking approval of the construction of an interstate natural gas pipeline.

“There are significant environmental requirements on routing, construction impact mitigation, and consideration of impacts to such things as endangered species, cultural resources, air quality, wetlands and landowners/land-use issues. These requirements are spelled out in FERC regulations and in the regulations of other relevant agencies,” said Mr Santa.

Through years of implementing FERC regulations and applying FERC’s upland erosion control and sedimentation as well as its wetland and waterbody crossing guidelines, interstate natural gas pipelines are expert in taking environmental considerations into account. In addition, on virtually every project specifically reviewed by FERC, additional environmental mitigation measures are required to address the specific circumstances of a project. These requirements become conditions attached to FERC’s Certificate of Public Convenience and necessity that is legally required in order to construct the pipeline.

The FERC process places heavy responsibilities on pipeline companies to obtain and respond to input from stakeholders affected by proposed facilities. Also, FERC staff independently obtain public input on proposals and uses this input in processing the application. Other agencies perform similar detailed reviews prior to issuing permits. Interstate natural gas pipelines use environmentally friendly procedures to the maximum extent practical in project planning and construction.

Natural gas – a bright future

As the INGAA Foundation’s 2035 infrastructure report demonstrates, the future is bright for US natural gas and for natural gas pipelines. This is due to the fact that the US shale gas revolution has transformed the North American natural gas supply picture; most forecasts point to increased natural gas consumption, particularly for power generation but also as a vehicle fuel, in coming decades.

Mr Santa explained “Just a decade ago, we were planning for increased imports of LNG from abroad; now the US natural gas industry is seeking to expand domestic markets and some even envision US natural gas entering the global LNG trade as exporters.”

Natural gas pipelines will be a key to ensuring that the potential of this natural gas revolution can be realised. This represents a huge opportunity for pipelines.

“We believe the North American gas transmission industry is up to the task, and we are committed to constructing and operating needed infrastructure in a safe and reliable manner,” Mr Santa said.