Gas Transmission Pipelines: Interstate Transportation of Natural Gas Is Generally Reliable, but FERC Should Better Identify and Assess Emerging Risks
Fast Facts
The interstate pipeline system that transports natural gas has generally been reliable, but interruptions can be serious. For example, 7,000 homes and businesses in Rhode Island didn't have heat during a weeklong service outage in January 2019.
However, because the system has been reliable, the commission responsible for overseeing its reliability—the Federal Energy Regulatory Commission—doesn't routinely review pipeline operator reports that could help it better identify and respond to future risks.
Demands on the pipeline system are increasing, and our recommendations will help the Commission ensure service continues to be reliable.
Highlights
What GAO Found
Available information indicates that the transportation of natural gas by interstate transmission pipelines has been generally reliable. Using reports submitted to the Federal Energy Regulatory Commission (FERC), which oversees the reliability of service provided by interstate transmission pipelines, GAO found that interruptions in natural gas service without advance notice to customers occurred an average of 28 times a year from 2015 to 2019. In contrast, in a single year (2018), every electric power consumer in the United States, on average, went without power for 5.8 hours. However, gas interruptions usually did not result in a complete loss of service to affected consumers. Representatives of natural gas industry sectors—including gas distribution companies, which typically rely on interstate transmission pipelines for access to natural gas—agreed that the transportation of natural gas via pipelines is generally reliable.
Selected Elements in the Production, Transmission, and Distribution Sectors of the U.S. Natural Gas Supply Chain
Industry representatives and state officials told GAO that risks to the reliability of natural gas service on interstate transmission pipelines could increase in the future due to more intensive use, driven by greater domestic gas production and use by electric power plants. However, because natural gas service has consistently been reliable, FERC does not routinely use all available information—including reports provided by natural gas transmission pipeline operators on the frequency and effects of service interruptions—to identify, assess, and respond to risks. Maintaining the reliable transportation of natural gas, which is integral to ensuring reliable energy service, involves understanding and being prepared to respond to risks as they emerge. By not routinely using all available information to identify and assess potential risks to the reliability of service on interstate transmission pipelines, FERC is not well positioned to respond, if necessary, to changes in the natural gas industry in order to ensure consumers continue to have reliable service.
Why GAO Did This Study
The interstate transmission pipeline system transports natural gas from production areas to large-volume customers, such as gas distribution companies, which provide natural gas to millions of residential and commercial consumers. Interruptions in the service provided by transmission pipelines can have serious effects, such as when about 7,000 homes and businesses in Rhode Island went without heat for a week in January 2019.
GAO was asked to review federal oversight of service interruptions involving interstate natural gas transmission pipelines. This report examines: (1) service interruptions on these pipelines and (2) emerging risks and the extent to which FERC identifies and assesses these risks.
GAO analyzed data and interviewed officials from relevant federal agencies; interviewed states' public utility commissions, interstate transmission pipeline operators, natural gas and electric industry associations, and standards-setting associations and surveyed a random sample of gas distribution companies.
Recommendations
GAO recommends that FERC: (1) use available information, such as reports by transmission pipeline operators on service interruptions, to identify and assess risks to the reliability of this service and (2) develop an approach to respond, as appropriate, to any identified risks. FERC agreed to establish a process to incorporate such information into its ongoing efforts to monitor and address reliability of interstate transmission pipeline service.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Federal Energy Regulatory Commission | FERC should use available information, such as reports by transmission pipeline operators on service interruptions, to identify and assess risks to the reliability of natural gas transmission service. (Recommendation 1) |
Closed – Implemented
The interstate transmission pipeline system transports natural gas from production areas to large-volume customers, such as gas distribution companies, which provide natural gas to millions of residential and commercial customers. Interruptions in the service provided by transmission pipelines can have serious effects, such as when a community in Rhode Island lost the ability to heat their homes and businesses for a week in January 2019. In September 2020, we reported that while service interruptions to the customers of interstate transmission pipelines are generally infrequent and limited in scope, the risk of such interruptions may be increasing. Industry representatives and state officials told us that greater use of interstate transmission pipelines, primarily due to increased production of natural gas and increased use by electric power generators could make service interruptions more likely. FERC is responsible for assisting consumers in obtaining reliable energy services at reasonable costs through appropriate regulatory and market means. Ensuring the reliable transportation of natural gas, a process that is integral to reliable energy service, involves understanding and being prepared to respond to risks as they emerge. As outlined in our enterprise risk management framework, federal agencies should take a series of steps to manage risks in complex systems such as identifying and assessing risks. However, FERC does not use data from serious interruptions of service reports or other information sources it collects to identify or assess trends in the frequency or scope of pipeline service interruptions. According to FERC officials, they use the serious interruptions of service reports for situational awareness but do not organize the reports for easy access, such as in a database, or analyze the reports to identify trends or potential risks. Because the system has been consistently reliable, FERC does not routinely use all available information-including reports provided by natural gas transmission pipeline operators on the frequency and effects of service interruptions-to identify and assess risks. Without routinely identifying and assessing potential risks to the reliability of natural gas transportation, the agency is not well positioned to respond to risks, if necessary, to fulfill its mission of assisting customers to obtain reliable natural gas transportation service. Consequently, we recommended that FERC use available information, such as reports by transmission pipeline operators on service interruptions, to identify and assess risks to the reliability of this service. In February 2023, we confirmed that FERC had developed and continues to use a database to help understand, access, and potentially identify reliability risks to natural gas transmission system. FERC created the database by cataloguing interruptions of service reports provided by natural gas transmission pipeline operators and has continued to add reports as they become available expanding the scope of the database. With this database, FERC will be better positioned to routinely identify and assess risks to the reliability of natural gas transmission pipeline system and continue to ensure consumers have reliable service.
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| Federal Energy Regulatory Commission | FERC should develop and document an approach to respond, as appropriate, to risks it identifies to the reliability of natural gas transmission service. (Recommendation 2) |
Open
In a letter to Chairman Joe Manchin, Senate Committee on Energy and Natural Resources dated 3/22/2021, FERC noted that in the Commission's opinion it appears that no federal agency has responsibility to ensure the reliability of the interstate natural gas pipeline system, and that Congressional action providing exclusive or comprehensive authority over natural gas pipeline reliability matters may be warranted. In a 1/12/22 meeting with FERC officials and subsequent emails, the officials stated that they believe they can take no further action regarding this recommendation, as Congressional action is needed to designate which federal agency has responsibility to ensure the reliability of the interstate natural gas pipeline system. In a February 14, 2023 email, FERC provided information on hearings held by Congress to consider that recommendation, but confirmed that no further congressional action had been taken. As of January 2024, Congress has not taken action. GAO will follow up with FERC to determine if the agency has procedures for communicating with other oversight agencies to alert them of any potential risks to the reliability of the natural gas transmission system.
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