Natural Gas Pipeline Industry Research Articles

Reliability evaluation and management of PetroChina's large-scale system of natural gas pipeline networks

To adapt to the current situation of large-scale and network development of China's natural gas pipeline industry, we must pay attention to the gas transmission support capability of the entire pipeline network system during its operation period and evaluate its reliability with respect to the fulfillment of transmission tasks. This study focuses on the safe and efficient operation and management of large-scale natural gas pipeline network systems, with the objectives of analyzing the reliability indicators, system reliability, unit reliability, reliability data, and reliability management framework of the pipeline network system. The above incentives have lain a foundation for future sustainable reliability management of large-scale systems of natural gas pipeline networks in China. Herein, the purpose, significance, and content of reliability studies on natural gas pipeline networks are discussed in detail at the system level. We establish a distributed step calculation model of physical pipeline network system reliability based on pipeline process simulation technology, which can simplify and rapidly calculate the reliability of the pipeline network/pipelines/station system. The reliability calculation model of the system was tested in a compressor station. According to the sequence of station yard-typical structure-basic circuit-equipment unit, the network topology structure was divided into reliability block diagrams of different levels from top to bottom, which we used to calculate the reliability of individual equipment from bottom to top. Finally, the reliability of the compressor station under different start-up and shutdown schemes was obtained. Overall, the discussed methods are promising and will provide technical and decision-making support for the safe operation of natural gas pipeline networks.

Review of failure trends in the US natural gas pipeline industry: An in-depth analysis of transmission and distribution system incidents

Natural gas (NG) transmission and distribution pipelines play an integral role in the United States (US) energy infrastructure. Various incidents over the past decades have caused growing concern as to the current condition of such pipelines in the US. Significant incidents were analyzed to understand the circumstances and causes to enable one to increase transmission and distribution line safety. Various data sets pertaining to significant US natural gas pipeline failures were analyzed in terms of transmission and distribution (main) pipelines. These categories were individually analyzed to develop an overall understanding of trends. While the report focuses on incidents over the ‘10 – ‘17 timeframe, additional analyses are included in the Appendix for two earlier time periods, ‘97 – ‘01 and ‘02 – ‘09. Only ‘significant’ incidents were included in the analysis, totaling 3000, and categorized in terms of: number of incidents, fatalities; pipe material; release type; ignition/explosion; location of loss; age of pipe; and cause of incident.Four significant incidents within the distribution sets and three significant incidents within the transmission sets were further analyzed as case studies, seven in all. The case studies were developed to provide an in-depth analysis of events leading to failures, providing additional information gathered by the National Transportation Safety Board (NTSB), Pipeline and Hazardous Material Safety Administration (PHMSA), and additional local utility commissions. Finally, recommendations are made for further work in this area, including comparison of the findings of this analysis with on-going steps by the NG pipeline industry to reduce failures.

Assessment of Failure Frequency Methodology Applied to Dense Phase Carbon Dioxide Pipelines

This paper determines the capability of current failure frequency methodology and models for assessing dense phase CO2 pipelines. An overview of these models is given in order to explain their applicability to CO2 pipelines, structure and to highlight the similarities and differences between each model. A pipeline must comply with the relevant design code in order to ensure conformity with pipeline safety regulations, for example in the UK it is PD-8010 (BSI, 2015). In this particular code the maximum allowable operating stress in the pipeline and the minimum allowable distance between the pipeline and any occupied buildings near to the pipeline route must be defined by the product being transported. The code was originally written to be applied to products which pose a thermal hazard and therefore there is currently no hazard category included in the code for dense phase CO2 and therefore cannot be applied to the design of dense phase CO2 pipelines. Where no design code for dense phase CO2 pipelines exists, to ensure the safe design, construction and operation, a quantitative risk assessment (QRA) approach is required (Barnett, 2014; Cooper, 2014). The purpose of a pipeline QRA is to determine the risks posed by the failure of the pipeline to people located nearby. The procedure involves the identification of hazard scenarios and considers both the probability of failure and the consequences of failure in order to calculate values for the individual and societal risk due to the pipeline. In general a QRA procedure covers the following steps: i) Identify hazards ii) Identify failure causes iii) Calculate the frequency of failure for each cause iv) Evaluate the consequences of failure v) Calculate the individual and societal risk a specific locations along the pipeline vi) Assess the tolerability of the calculated risks by comparison with recognised criteria In terms of failure causes, pipeline failure can occur due to numerous different mechanisms including, third party external interference, corrosion, material or construction defects, natural events and operational error; all of which must be considered as part of the assessment (Goodfellow, 2006). For oil and gas pipelines, the frequency of pipeline failure due to third party external interference has traditionally been calculated using models based upon probabilistic, structural reliability methods. Structural reliability methods are applied by combining the following: • Limit state functions, the mathematical models which define the conditions for failure; • Probability distributions based around selected random variables; • A mathematical technique to calculate the probability of failure (e.g. Numerical Integration, Monte Carlo, First Order Reliability Methods). For pipelines the limit state functions are based on semi-empirical fracture mechanics failure models; and the probability distributions are based on pipeline damage and derived from historical operational data. The failure probability is converted into a failure frequency to take into account the regularity of third party external interference damage. The various models currently in use within the oil and natural gas pipeline industry differ in their subtleties; however all are based upon a methodology originally developed in the 1980s. To calculate pipeline failure frequency for dense phase CO2 pipelines it would be desirable to extend the use of the current pipeline failure frequency methodology. The methodology has been employed for over 25 years, and as a result is tried, tested and well understood. The transportation of dense phase CO2 by pipeline however requires operational pressures in excess of the CO2 triple point; potentially up to 200bara. This high design pressure requirement necessitates the use of thick wall linepipe in pipeline construction, potentially with wall thickness dimensions outside of the limits of current operational experience. Consequently, the reliance of the failure frequency methodology on empirical data and semi-empirical relations needs to be examined. The requirement to develop a robust Quantitative Risk Assessment (QRA) methodology for high pressure CO2 pipelines has been recognised as critical to the implementation of CCS. Consequently, failure frequency models are required that are appropriate for high pressure CO2 pipelines. This paper addresses key components from the failure frequency for QRA methodology development.

Risk Assessment of Incidents Response for Downstate New York Natural Gas Distribution Infrastructure

In the United States today, there are thousands of miles of an extended network of natural gas pipelines across the nation. Current pipeline explosions and leaks in several regions have challenged the natural gas industry to re-evaluate efforts and to pursue proactive strategies. Safety and the environmental threat has become a primary concern in the United States and around the world, but mostly in cases where natural gases, oil, and other hazardous wastes are intricate. Thus, a significant point in the natural gas pipeline industry that signifies both the economic and social issue is the unplanned pipeline risk. In this article, a quantitative data analysis was performed for Downstate New York companies, Con Edison and National Grid. There, the data from various natural gas pipelines was observed for the trend regarding failing material, failure cause, aging characteristics, and perform a risk assessment to come up with training and risk checklist that could be crucial for risk handling strategies. The statistical analyses of the natural gas pipeline-related incident data for distribution pipelines between 2012 and 2016, which were composed from Pipeline and Hazardous Material Safety Administration (PHMSA) of the United States Department of Transportation (DOT), are compiled. The total miles in the gas distribution pipelines in downstate New York is approximately 48,539 as of 2016. The equipment failure, other incident cause, other outside force, and excavation damages are the leading causes of the pipe-related incidents, which are responsible for over 20% of the total incidents between 2012 and 2016. As a result, a quantitative research methodology has been developed as the suitable approach to achieve risk assessment. Mainly, this approach aims towards risk management in natural gas industry projects using the maximum likelihood method on 70 rupture incidents between 2012 and 2016, which were collected from the PHMSA pipeline incident database. The hypothetical quantitative risk assessment of the gas distribution pipelines are illustrated by combining the statistics of the pipeline rupture incidents, as well as risk assessment performed in the present study.

Natural Gas Pipeline Regulation in the United States: Past, Present, and Future

This monograph provides a detailed overview of federallevel regulation of the U.S. interstate natural gas pipeline industry. To develop a more complete understanding of the current regulatory environment, we place contemporary rules and regulations into their proper historical context by first reviewing the evolution of gas pipeline regulation over the course of the 20th Century. We then discuss the market restructuring process that culminated in 1992 with FERC Order No. 636, review the economic and policy research that studied its effects on pipeline operations (and on the U.S. natural gas market writ large), and examine the current regulations and industry structure that have since emerged. Finally, we explore possibilities for the future of regulation in the gas pipeline industry, offering some predictions regarding the likely direction of regulatory changes, paying particular attention to the possibility of incentive-based regulation in natural gas transmission.

Access Pricing Policy Reform Suggestions in Chinas Natural Gas Pipeline Industry Based on the Experiences in America

The growing natural gas consumption asks for larger scale of pipelines and arouses criticism on separation pipelines business from national oil and gas monopoly companies in China. Through reviewing of Americas regulatory practices on access pricing policy in the gas pipeline industry and summarizing the evolution of access pricing theory on network economics, we conclude some suggestions on the reform process of Chinas pipeline access regulation policy by comparing and contrasting the industrial environments major differences between China and America. We emphasize the importance of executing non-discrimination access price policy in the spirit of Anti-Monopoly Law and indicate that simple separation isnt the most effective way to increase social welfare nowadays. Regulatory agency should prohibit abusing market power and decrease cost information asymmetric in cross-subsidy activity.

The Financial and Operational Impacts of FERC Order 636 on the Interstate Natural Gas Pipeline Industry

The Federal Energy Regulatory Commission's Order 636 fundamentally altered the regulatory and operational environment of the natural gas industry in 1992, as the culmination of several directives aimed at relaxing regulation and fostering competition. We hypothesize that gas pipeline firms subsequently changed their operational and financial behavior in ways consistent with reduced balkanization, increased competition, and reduced expense preference behavior. Our results indicate that these firms have become more homogeneous financially but less so operationally. We find evidence that the marginal profitability of various pipeline activities has responded more to financial market conditions than to the regulatory environment.

Productivity Analysis of US Natural Gas Distribution Industry

As the result of the deregulation of well-head natural gas markets and the restructuring of the natural gas pipeline industry during the 1980s and 1990s, the natural gas volume and nominal price of supply have varied widely over the industry. In the years before interstate pipelines connected the gas production areas to distant markets, gas was considered so abundant as to be almost worthless. Now competition is well entrenched in gas production and is moving downstream into transportation markets. The provision of natural gas is now separated from the sale of pipeline transportation services, and local distribution services are being increasingly unbundled from the gas commodity sale. This paper measures and argues the productivity growth and change before and after the deregulation in the natural gas distribution industry at an industry level in the US using total factor productivity (TFP) and translog cost function methods. From the results, it is concluded the TFP in industry level has no significant growth rate before and after deregulation.

Why Regulate Utilities?: The New Institutional Economics and the Chicago Gas Industry, 1849-1924, and: Gas Pipelines and the Emergence of America's Regulatory State: A History of Panhandle Eastern Corporation, 1928-1993 (review)

Reviewed by: Why Regulate Utilities? The New Institutional Economics and the Chicago Gas Industry, 1849–1924, and: Gas Pipelines and the Emergence of America’s Regulatory State: A History of Panhandle Eastern Corporation, 1928–1993 * Robert C. Means (bio) Why Regulate Utilities? The New Institutional Economics and the Chicago Gas Industry, 1849–1924. By Werner Troesken. Ann Arbor: University of Michigan Press, 1996. Pp. 132; figures, tables, appendixes, notes, bibliography, index. $37.50. Gas Pipelines and the Emergence of America’s Regulatory State: A History of Panhandle Eastern Corporation, 1928–1993. By Christopher J. Castaneda and Clarance M. Smith. New York: Cambridge University Press, 1996. Pp. xx+296; illustrations, maps, tables, appendixes, notes, index. $44.95. Although neither of these two books takes technology as its theme, both trace the impact of technology on a segment of the gas industry. In Werner Troesken’s Why Regulate Utilities? the technology is the water gas process for manufacturing gas. In comparison with the older coal gas process, the new method required a smaller investment and yielded a superior product. In many cities, its commercialization in the 1870s led to the entry of new firms into the manufactured gas market. Troesken attributes their entry into the Chicago market to the lower fixed costs of the new process; elsewhere, the incumbent firms’ reluctance to abandon their investment in the older process appears also to have played a role. In Chicago, the result was a price war that bankrupted one company and nearly bankrupted another. The survivors turned first to a holding company and then to a voting trust. Although the state successfully challenged both devices in court, in 1897 the companies prevailed in the Illinois legislature: the Gas Act permitted them to merge or combine, and the Street Frontage Act protected them from new competitors by making it impossible to obtain right-of-way for mains. With competition at an end, attention shifted to rate regulation. Over the companies’ strong opposition, the state legislature in 1905 empowered the Chicago City Council to regulate gas and electric rates. The results confirmed the companies’ fears. A promise to reduce gas rates helped to elect one mayor, and rates were set after either a cursory analysis or no analysis at all. In 1914, a state public utilities commission replaced municipal regulation. [End Page 797] Troesken uses these developments to test an institutional theory of utility regulation, which seeks to explain regulation by looking to formal institutions, including legislation and judicial decrees as well as contracts. He employs several analytical tools, including a comparison of Chicago gas prices before and after institutional changes and an analysis of the effect of those changes on gas company stock prices. His findings generally support and quantify what common sense would suggest. The 1897 legislation halted the decline in real gas prices; the 1905 legislation reduced the price of gas company shares. His findings also are consistent with the institutional theory but do not, however, prove that theory, even for Chicago and Illinois. The problem lies partly in the inescapable ambiguity of some of the events. For example, the relative increase in gas prices between municipal and state regulation may be consistent with either the institutional theory or a theory that regulators are captured by the regulated companies; it depends on whether the increase was needed to provide the necessary assurances to companies considering a commitment of capital to the industry. The problem also lies partly in the nature of the institutional theory, which potentially points to several different institutional factors to explain the development of regulation. Its conceptual complexity may well be a necessary accommodation to the reality of regulation, but the result is a theory not easily proved or disproved. The development of the natural gas pipeline industry described by Christopher Castaneda and Clarance Smith depended on the use of electric arc welding to construct pipelines capable of transporting natural gas hundreds of miles without unacceptable leakage. This technique became practically available in the 1920s, and Panhandle Eastern Corporation was one of the first pipelines to exploit it to link producing state natural gas reserves with urban markets in the East and Midwest. By 1931 Panhandle was serving customers in...

Parametric analysis of cost inefficiency and the decomposition of productivity growth for regulated firms

This paper examines the contributions of technical change, scale economies, regulation, and efficiency on productivity growth in the interstate natural gas pipeline industry. Following Bauer (1990) productivity growth for firms subject to regulation is decomposed into technical change, scale economies, regulation, and efficiency components. The data sample consists of 20 pipeline companies and covers the period 1977 to 1987. Results indicate that scale economies, cost inefficiency, and regulation on average accounted for 64%, 16%, and 4% of productivity growth respectively. Cost efficiency declined over the sample period, most of which can be attributed to technical inefficiency.

Economic Principles and Applications to Natural Gas Pipelines and Other Industries

This book combines and expands several of the authors` papers on regulatory risk and a report on risk in the interstate natural gas pipeline industry which the authors prepared for the Interstate Natural Gas Association of America. The first four chapters present the authors` theory of risk in regulated industries. The remaining five chapters provide a detailed analysis of risk under historic and pending regulation of the interstate natural gas pipeline industry. An appendix provides an excellent, detailed and highly annotated regulatory history of interstate natural gas pipeline regulation from roughly the Natural Gas Policy Act of 1978 to 1990. In some 350 pages this book appears to make two primary points. First, rate base regulation is a camel, where the definition of a camel is a horse designed by a committee, or in the case of utility regulation, a horse designed by congress, state legislatures, and the courts. The second point is that realized rates of return in regulated utilities are subject to a reverse Lake Wobegone effect. In the regulatory world of the authors, all utility returns are below average. This book contains some interesting new ideas and some excellent insights into some old issues in rate basemore » regulation. It is worth the somewhat tedious read just for the wealth of institutional information on the pipeline industry and its regulation.« less

Cotenancy and competition in an experimental auction market for natural gas pipeline networks

This research investigates the use of a "smart" computer-assisted auction mechanism for the allocation of resources within a network of commodity flows. The type of network that we examine has many of the economic properties of the natural gas pipeline industry. In fact this research was originally motivated by specific concerns about the impact of federal regulation on the economic performance of the natural gas industry. However, we believe that the ideas developed here have potential application in other network environments such as electricity generation and transmission, the provision of various transportation and communication services, and scheduling in multiprocessing computing environments.1 Here are some prominent features of the gas industry:

Competition in the natural gas pipeline industry: an economic policy analysis

Introduction The Natural Gas Industry The Methodology The Short Run The Intermediate Run The Long Run The Policy Choice Appendixes Index

Technical inefficiency and productive decline in the U.S. interstate natural gas pipeline industry under the Natural Gas Policy Act

Firm-specific and temporal patterns of technical efficiency of the interstate natural gas transmission industry during the implementation of the Natural Gas Policy Act are estimated by two alternative methodologies. A new panel stochastic frontier systems estimator exploits the potential exogeneity of certain regressors from firm effects. This allows for heterogeneity in slopes, as well as in intercepts. Patterns of technical efficiency based on the structural stochastic model are compared with those based on deterministic programming methods, data envelopment analysis. Concordant findings based on these alternative methodologies suggest a perversive pattern of declining technical efficiency in the industry during the period of phased in well-head price deregulation.

REGULATORY REFORM: LESSONS FOR NATURAL GAS PIPELINES

This article examines regulatory reform and some possible consequences of reform designed to increase the role that competition plays in the interstate natural gas pipeline industry. The analysis first provides a conceptual framework for viewing the “problem of natural monopoly” as a basis for regulation. It summarizes ways in which introducing competition for a market may be possible even if competition within a market is not possible–through competitive auctions, monopolistic competition, or contestability. The analysis then relates briefly to this framework the experiences of three U.S. industries that have undergone substantial reform during recent years–airlines, motor carriers, and railroads. Finally, it compares the natural gas pipeline industry with the others examined and suggests types of regulatory reform that might succeed–and those that might not succeed–in improving resource allocation.

REGULATORY REFORM OF INTERSTATE NATURAL GAS PIPELINES

This paper assesses the historic nature of regulation of the interstate natural gas pipeline industry and examines two recently proposed reforms, “mandatory” contract carriage and open entry. Empirical evidence that bears on the desirability of each of these reforms is cited or developed. It is argued that the reforms increase competition in gas transportation, thereby diminishing the need for traditional regulation, and that they increase economic efficiency in the transport of natural gas.

Elements of Market Power in the Natural Gas Pipeline Industry

As a result of the distortions that have beset natural gas markets in the wake of partial wellhead deregulation under the Natural Gas Policy Act of 1978 (NGPA)-the most visible problem being the existence of increased prices amid a glut of deliverable supplies-concern has mounted about whether the natural gas pipeline industry will perform in a socially efficient manner in the long run when field prices are completely decontrolled. In addition to transporting natural gas from the field to the city-gate, interstate natural gas pipeline companies have traditionally performed two functions. Granted private carrier status by the Natural Gas Act of 1938 (NGA), they both purchase gas shipments in upstream markets and resell them in downstream markets as well as match up gas producers who have available supply with distribution companies and wholesale end-users (direct industrial consumers and electric utilities) who have unfilled demand. In other words, as private carriers gas pipelines not only provide a gas transmission service but also assume the twin roles of gas merchandiser and broker.

II Crizontal integration of the natural gas pipeline industry: An exercise in gas pooling

This paper examines a structural change in the natural gas industry that would lead to significant economies of cost and reliability, namely gas pooling arrangements among pipeline companies. In order that gas pooling he able to confer economic benefits, it must be practicable and workable. The study indicates that this is the situation. In addition, gas pooling confers substantial benefits on the participants. An analysis of spocific beneits is undertaken. These benefits are then compared with the disincentives to horizontal integration of the industry. The conclusion of the study is that thoughtful and consistent regulatory policies to encourage gas pooling are in the public interest.

The rate structure of the natural gas pipeline industry

Many economists have urged regulatory commissions to pay closer attention to the rate structures of public utility companies. Tele-communications, rail transportation, and electric power are all said to be practical areas of rate structure experimentation. However, the rate structure of the natural gas pipeline industry, a regulated sector of the economy, has received limited comment. This is particularly disappointing since natural gas is significant in the nation's pattern of energy consumption. The purpose of this article is to identify the current rate structures and practices of the natural gas pipeline industry in the United States. In addition, the rate burden for certain buyers of natural gas service should become more apparent. To determine the current rate structures and practices, the roles of eight natural gas pipeline companies, 1 which together serve most regions of the United States, are studied. Only those tariffs are examined where service is not subject to any interruptability up to the ...

Peak Responsibility in the Natural Gas Pipeline Industry

Peak Responsibility in the Natural Gas Pipeline Industry