Obama administration proposes ageing gas pipeline plan

The Obama administration has proposed spending as much as US$3.5 billion to replace ageing natural gas pipelines nationwide.

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.

The report, released on Tuesday, recommends over US$15 billion in total on new spending programmes or tax credits to carry out a major overhaul of the country's energy infrastructure.

The report, from a lengthy Energy Department study called the Quadrennial Energy Review (QER), calls for creating a DOE programme to offer states financial incentives to replace and repair their ageing infrastructure, while cutting greenhouse gas emissions from distribution lines that carry natural gas to homes and businesses. The price tag would be US$2.5 - 3.5 billion over 10 years.

Nearly half of all the gas pipelines traversing the USA were built in the 1950s and 1960s.

Commissioned by President Barack Obama when he announced his Climate Action Plan in June 2013, the QER was more than a year in the making and is the administration's first comprehensive attempt to analyse the country's ageing energy systems.

The American Society of Civil Engineers gave the country's energy infrastructure a nearly failing D+ grade in its 2013 Infrastructure Report Card.

Key priorities

Among the key priorities and recommendations for policymakers in the QER are: grid modernisation, oil and gas infrastructure and transportation infrastructure.

Oil and gas

The QER tries to address the changes in the global energy markets that has seen domestic production soar. It called for an overhaul of the US emergency oil reserve system that was authorised by Congress 40 years ago after the Arab oil embargo sent shock waves through energy markets.

Beyond improving the Strategic Petroleum Reserve's infrastructure to increase the speed at which oil can be withdrawn, the review calls for giving the sitting president more authority to tap the reserve in order to pre-empt fuel price spikes.

"The President should not have to wait until higher fuel prices have already damaged the US economy before the SPR can be used without restrictions," the review said.

The report also recommends that the Energy Department provide up to US$3.5 billion over 10 years to states to encourage them to improve the safety and environmental performance of their natural gas distribution systems by replacing old, leaking pipelines.

Rail transport

The boom in oil and gas production has added to congestion in the country's rail, barge and roadway systems that already transport an array of other commodities from agriculture to coal.

To deal with this congestion, the QER recommends creating a 10 year, US$2 billion grant programme to be run by the Transportation and Energy Departments to improve connections between rail, road and water transport systems.

The report also calls for the energy department and Surface Transportation Board to improve the gaps in currently available data on commodities that are transported by rail.

Edited from various sources by Elizabeth Corner

Sources: Politico, Oil Price, Reuters

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