PHMSA’s 2009 Gas Distribution Rule: Should It Stay or Should It Go?
WASHINGTON, DC—Resources for the Future (RFF) today continues its series of reports estimating the potential impacts on industry and the public if energy regulations are eliminated, modified, or delayed. Last March, President Trump issued an executive order to reduce the regulatory burden on the energy sector. The new report, PHMSA’s 2009 Gas Distribution Rule: Should It Stay or Should It Go?, analyzes the potential costs and benefits of repealing the Pipeline and Hazardous Material Safety Administration’s (PHMSA’s) gas distribution pipeline rule requiring integrity management planning, which includes more frequent inspection and maintenance, for gas distribution pipelines.
The Trump administration has not yet proposed repealing this rule. However, if the administration were to target it, RFF Senior Fellow Alan Krupnick, Research Assistant Justine Huetteman, and Visiting Fellow Arthur Fraas estimate that there would be net benefits of repeal of $789 million or net costs of repeal of $972 million, depending on the estimated effectiveness of the rule in preventing natural gas leaks and accidents along the distribution pipeline network.
The researchers also analyzed the impact of adjusting the costs and benefits of the rule on the conclusion of whether to repeal the rule or not. One adjustment made by the authors was to include the valuation of methane emissions reductions. The Obama administration’s original analysis of this rule did not quantify benefits from avoided greenhouse gas emissions because it was promulgated prior to government-wide adoption of a social cost of carbon and other greenhouse gases. The new report includes estimates of the impact of repealing the rule using the social cost of methane now that there is greater research and wider adoption of the number. Using a domestic social cost of methane, the researchers found that there are net benefits of repeal of $299 million or net costs of repeal of $1.5 billion, depending on the estimated effectiveness of the rule. Using a global social cost of methane, the researchers found that repealing this rule has net costs to society of between $3.8 billion and $5.6 billion, again depending on the estimated effectiveness of the rule.
The report is part of the series The Costs and Benefits of Eliminating or Modifying US Oil and Gas Regulations. The goal of this series is to estimate the potential impacts on industry and the public if the regulations are eliminated, modified, or delayed.
Read the full study: PHMSA’s 2009 Gas Distribution Rule: Should it Stay or Should it Go?
Read the related blog: A Retrospective Look at the 2009 PHMSA Gas Distribution Rule and Its RIA.
Read previous reports from this series:
The 2016 Arctic Offshore Drilling Safety Rule: Should It Stay or Should It Go?
PHMSA’S 2015 Tank Car Rule: Should It Stay or Should It Go?
EPA’s 2016 Methane Rule: Should It Stay or Should It Go?
The 2016 Blowout Preventer Systems and Well Control Rule: Should It Stay or Should It Go?
The 2016 BLM Methane Waste Prevention Rule: Should It Stay or Should It Go?
Resources for the Future (RFF) is an independent, nonprofit research institution in Washington, DC. Its mission is to improve environmental, energy, and natural resource decisions through impartial economic research and policy engagement. RFF is committed to being the most widely trusted source of research insights and policy solutions leading to a healthy environment and a thriving economy.
Unless otherwise stated, the views expressed here are those of the individual authors and may differ from those of other RFF experts, its officers, or its directors. RFF does not take positions on specific legislative proposals.
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