The report suggested setting goals that can be reached voluntarily to determine whether additional regulations are necessary. It also said the EPA needs to keep more thorough, long-term accounting of methane leaks from the natural gas distribution system, rather than combining such data with other sectors, and to create a performance metric to track progress. It said rules for the distribution system, which the EPA does not currently regulate for methane emissions, also might be necessary.
"The EPA has not issued regulations to control methane emissions from distribution pipelines, partnered with [the Pipeline Hazardous Materials and Safety Administration] to control such leaks, nor developed a strategy to address barriers that inhibit the mitigation of methane leaks in the natural gas distribution sector," the inspector general report released Friday said.
The EPA does not regulate the distribution system for leaks of methane, a short-lived greenhouse gas that is 24 times more potent than carbon dioxide and comprises 9 percent of domestic emissions. Leaks from distribution pipelines accounted for 10 percent of emissions from natural gas systems, mostly due to aging cast-iron, wrought-iron or unprotected steel pipes that run underneath many large cities such as Washington, New York and Boston.
The White House announced in March an inter-agency effort to address methane emissions. The EPA is evaluating white papers that it will use to decide whether regulations, including at the site of natural gas drilling, are necessary. The Energy Department also has held a series of meetings and is working on a comprehensive review of the nation's energy infrastructure.
"[The EPA Office of Air and Radiation] agrees that it is important to collaborate with other organizations to address methane leaks from distribution pipelines from both safety and environmental perspectives as we already are. Addressing methane emissions from the oil and gas sector through interagency collaboration is a key goal" of the inter-agency methane plan, said EPA air chief Janet McCabe, adding that the strategy includes "efforts to enhance collaboration with the Pipeline and Hazardous Materials Safety Administration [PHMSA] to discuss best practices for reducing leaks in the distribution sector."
The inspector general report said the EPA should combine with PHMSA, which regulates pipelines from a safety perspective, to address methane leaks. That's because distribution utilities are not required to repair leaks that don't pose a safety risk, and often avoid doing so because of the multi-million dollar cost that can't be recovered from customers until state regulators approve new — and higher — rates.
"The limited emission reductions achieved by the distribution sector are due in large part to the fact that [distribution utilities] have little financial incentive to reduce methane emissions from leaking pipelines that do not pose a potential safety hazard," the report said.
The Environmental Defense Fund has suggested a greater environmental focus for PHMSA as well. But the gas utility industry says the current approach works, noting 38 states have implemented accelerated pipeline replacement programs that incentivize utilities to perform upgrades.
The inspector general disagreed that the status quo was sufficient, and found its data collection particularly troublesome.
"The EPA has not committed resources toward developing a new methodology to estimate distribution pipeline leaks. Rather, the EPA has focused on quantifying and addressing upstream emissions from the gas industry, such as emissions from natural gas production," the report said.
Sen. Ed Markey, D-Mass., whose state recently passed legislation that could impose harsh financial penalties on gas utilities that run afoul of pipeline safety regulations, praised the inspector general report.
"States like Massachusetts are already leading the way, but we need a national effort to build a 21st century natural gas system that cuts pollution and puts Americans back to work," he said.