In recent years, several high profile accidents (including Pacific Gas and Electric Co.’s 2010 California pipeline explosion and the recent Harlem explosion) have drawn national attention, putting pressure on regulators and operators to ensure public safety and on stakeholders to approach infrastructure safety more proactively. This is driving significant capital expenditures in infrastructure investment, which are expected to remain strong in 2014.
Safety accidents over the past several years have alerted federal agencies and the public to potential problems with the existing gas pipeline infrastructure. Planning has become increasingly difficult in this environment. Utilities and other pipeline operators must consider required infrastructure investments, other spending priorities, regulatory lag/uncertainty, and pending federal rulemaking. Companies that must address safety-related work before regulation is finalized are worried about misjudging regulators’ priorities and inadvertently wasting money and effort. While one study published by the Interstate Natural Gas Association of America (INGAA) shows that only 15% of accidents are related to the age of existing pipeline, operators are still compelled to upgrade their current infrastructure in anticipation of coming regulation. It is important for regulators, operators, and other stakeholders to work together to improve pipeline safety while keeping costs in check.
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