Leak repair activity by U.S. gas utilities rebounded in 2021, as some companies ramped up work and deployed new strategies to meet climate goals and exceed federal safety requirements.

Natural gas utilities with at least 5,000 miles of distribution mains and service lines reported 466,183 pipeline leak repairs in 2021, up 1.8% from the prior year. In 2020, leak repairs fell for the first time since 2017 among the group of more than 90 gas distributors, according to S&P Global Commodity Insights analysis of federal data.

The recovery in 2021 was broad-based. Out of the 20 companies most actively fixing leaks, 13 fixed more in 2021 than they did in the previous year. In 2020, all but four of the top 20 companies reported that leak repair activity had declined from 2019.

Leak repair activity in 2021 was still down 4.9% from 2019, the last year before the COVID-19 pandemic. Some gas utilities cautioned against drawing conclusions about the pandemic's impact on the industry's ability to conduct leak surveys, respond to odor calls and repair identified leaks.

"COVID did not factor into the drop in leak-related work," said Anne Marie Corbalis, a media relations manager at Consolidated Edison Co. of New York Inc. The company has topped S&P Global Market Intelligence's rankings of gas utilities actively fixing leaks for eight consecutive years.

The decline in Con Edison's 2020 leak repairs was due to a range of factors, including its ongoing replacement of leak-prone pipe and a mild winter, which leads to less ground movement that can put stress on pipes, Corbalis said. In 2021, Con Edison's annual leak repairs jumped 10.3% from the prior year.

The pandemic prompted Southern Co. Gas to exercise discretion about performing optional work, according to Emeka Igwilo, the chief data officer and vice president of operations support. The company prioritized repairs that could be performed outdoors and deferred work on nonhazardous leak repairs that required shutting off gas flow and entering customers' homes, Igwilo said.

Targeting nonhazardous leaks

Two of Southern Co.'s subsidiaries — Northern Illinois Gas Co., which does business as Nicor Gas, and Virginia Natural Gas Inc. — have steadily moved up in the annual rankings.

To compile the rankings, Market Intelligence calculated a leak repair ratio for each company. The ratio measured a company's total leak repairs against its total distribution main and service line mileage, as reported to the U.S. Pipeline and Hazardous Materials Safety Administration, or PHMSA.

Nicor and Virginia Natural Gas increased leak repair work in 2021 by 29.6% and 28.2% year over year, respectively. Nicor climbed five spots to rank fifth on the list, while Virginia Natural Gas climbed three spots to No. 3.

Igwilo said the companies have implemented programs over the past two years to reduce the number and duration of active, nonhazardous leaks in their systems, resulting in more repairs reported to PHMSA. Southern Co.'s four gas utilities are targeting net-zero greenhouse gas emissions from operations by 2050.

"Repairs of nonhazardous leaks are not required under the current pipeline safety regulations. However, Nicor Gas and VNG have opted to accelerate the repair of these leaks," Igwilo said. "We believe it is the right thing to do, in keeping with our safety and sustainability values."

Southern Co.'s four gas utilities plan to expand their use of advanced leak detection units in 2023, including by standardizing the use of mobile detection units for portions of compliance surveys in urban areas, Igwilo said.

Last year, CenterPoint Energy Resources Corp. said its use of vehicle-mounted leak detection units partly explained its drop in leak repair work in 2020. Deploying the technology led to a surge in leak identifications and repair work through 2019, followed by a drop in activity in 2020.

More frequent surveys

Xcel Energy Inc. subsidiary Public Service Co. of Colorado increased gas leak repairs by nearly 30% in 2021, jumping 11 spots to No. 17 in the rankings. The company chalked up the increase to a "more proactive approach of finding and repairing leaks," aimed at improving public safety and achieving net-zero greenhouse gas emissions from its gas business by 2050, the company told Commodity Insights in an email.

The company aimed to achieve net-zero methane emissions from its distribution system by 2030 and reduce overall greenhouse gas emissions by 25% from 2020 levels across gas supply, distribution and end-use.

"We now survey the entire system every three years — more frequently than every five years as required by federal law — and we are looking at new cost-effective technologies and strategies to further improve the frequency and accuracy of our monitoring," Xcel spokesperson Tyler Bryant said.

Xcel's endeavors reflect an ongoing trend: Mitigating climate-warming emissions has become an increasingly important driver for leak repair and detection activity in recent years. This trend has dovetailed with a push to electrify heating and a rethinking of gas utility regulation in light of state climate goals.

In states such as California, Colorado, New York and Massachusetts, lawmakers and regulators have asked gas utilities to seek enhanced approval for fossil fuel infrastructure projects and required the companies to present nonpipeline alternatives to gas supply, such as energy efficiency, building electrification and demand response.

Tight systems critical to hydrogen transport

Regulators have remained broadly supportive of pipeline replacement programs as a matter of public safety. Corrosion remained one of the leading causes of leaks in 2021, particularly for gas utilities with a substantial percentage of unprotected steel pipes remaining on their systems.

Equipment failure — a category that includes malfunctions of control, relief and alarm equipment — was another leading cause of leaks for many companies in the top 10 by leak repair ratio.

The companies with the lowest leak repair ratios typically repaired relatively few leaks and had high percentages of plastic pipe on their systems. Gas grids largely composed of plastic are widely viewed as in the best position to adopt one of the industry's preferred decarbonization pathways: transporting low- or zero-carbon hydrogen.

Northwest Natural Gas Co., which had the third-lowest leak repair ratio in 2021, aimed to demonstrate its ability to transport a 15% blend of hydrogen in gas distribution lines by the end of 2022.

Companies with high leak repair ratios are also seeking to push the envelope of hydrogen blending. Southern California Gas Co., which ranked 11th by leak repair ratio in 2021 and which has a system that is about 58% plastic pipe, in September proposed a pilot project that would target a 20% hydrogen blending threshold.

On Dec. 15, California regulators directed investor-owned utilities to pilot hydrogen blends of up to 20%, with a focus on monitoring pipeline integrity and leakage. The order applied to Pacific Gas and Electric Co., which ranked 15th by leak repair ratio and had a gas distribution system with 61% plastic piping.

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