The amount of money being proposed is just a fraction of what it would take to replace the hundreds of thousands of miles of natural gas distribution pipes. Obama proposes $3.5 billion gas pipeline overhaul But Republicans are skeptical about providing the money.

The Obama administration on Tuesday proposed spending as much as $3.5 billion to replace aging natural gas pipelines nationwide — a move that comes just as POLITICO published a lengthy investigation of the public safety threat posed by pipelines and the numerous problems plaguing the federal agency that regulates them.

The announcement, included in a 348-page government report examining how to upgrade a vast array of the country’s energy infrastructure, is aimed at addressing the dangers to both public safety and the climate from pipelines that leak or rupture.


But the amount of money the administration is proposing is just a fraction of what it would take to replace the hundreds of thousands of miles of decades-old cast-iron and bare-steel natural gas distribution pipes — the lines that are considered most vulnerable to ruptures. A full replacement would cost $270 billion, the report says. And the whole proposal immediately ran into GOP skepticism.

The report, from a sprawling Energy Department study called the Quadrennial Energy Review, calls for creating a DOE program to offer states financial incentives to replace and repair their aging infrastructure, while cutting greenhouse gas emissions from distribution lines that carry natural gas to homes and businesses. The price tag would be $2.5 billion to $3.5 billion over 10 years.

POLITICO’s analysis of federal pipeline data found that the older lines are a major part of the problem. Since 2002, about a quarter of all reported pipeline incidents involved failed parts that had been installed before 1970, including 91 incidents in which the parts were at least 80 years old. During the past 12 years, spills, breaks and other accidents from all gas, oil and hazardous liquids pipelines caused a total of more than $5.5 billion in damage.

While the Energy Department has the authority to create the program, it would rely on Congress to approve the money — setting up a clash with Republicans who see little reason to flood the administration with cash to fix a problem that the industry is already touting its progress in tackling. GOP lawmakers quickly bashed the DOE report’s recommendations across the board.

A senior Republican aide, speaking on condition of anonymity, said it’s “not likely” that the administration would get Congress to sign off on its ambitious pipeline program. Within the industry, the aide said, “they don’t need grants; they need permit and [regulatory] certainty.”

Matt Sparks, a spokesman for House Majority Leader Kevin McCarthy (R-Calif.), pointed to three oil and gas infrastructure bills that the chamber has already passed with Democratic support this year, including a measure that President Barack Obama vetoed that would have approved construction of the Keystone XL oil pipeline. “If the administration is serious about securing our energy future, a good start might be” by working with Republicans on those bills, he said by email.

Still, the administration remains hopeful that it can find a compromise with Congress on a pipeline replacement program that would pay job-creation as well as environmental dividends, particularly as Republicans work on broad energy legislation. “We are eager to engage with Congress and see if we can find common ground,” White House energy and climate adviser Dan Utech told reporters on a conference call earlier Tuesday. “We think this is a really important area for working together.”

Former National Security Council energy adviser Jason Bordoff, the founding director of Columbia University’s Center on Global Energy Policy, said both parties should be able to agree on the administration’s call for addressing “crumbling gas pipelines” and the report’s other recommendations.

“These aren’t things that should be partisan issues,” he said. “It’s obviously hard to come up with money in today’s environment, but these are things that are necessary to do.”

An Energy Department official said DOE will not include the program in its fiscal year 2016 budget request. The department plans to work on designing the program this year and anticipates requesting funding in fiscal year 2017, the official said.

The administration’s proposal would encourage states that are replacing older pipelines to focus their spending on averting electricity rate increases, and lower-income ratepayers would get up to four years of aid to deal with potential price hikes stemming from the replacement program.

That emphasis on lower-income Americans left some in the industry wondering why DOE hopes to create a new way to give electricity rate relief that the government already provides through HHS.

“More than anything, we’re puzzled by this request, because it’s such a convoluted approach when there’s such an obvious solution — funding the documented need in” the HHS Low Income Home Energy Assistance Program, said an industry source tracking the proposal who addressed it on condition of anonymity.

The Energy Department would set guidelines to evaluate the applications based on their expected benefits to public safety, cost effectiveness and the degree to which the proposal will cut emissions of methane — a greenhouse gas that’s shorter-lived than carbon dioxide but over 20 times more potent.

“While I am pleased to see the continued Administration support for natural gas in our clean energy future, it is critical to recognize the significant work already underway, and the contributions current industry efforts are making,” American Gas Association President Dave McCurdy said in a statement on the DOE report.

Green groups that have long pushed for greater government and industry investment in upgrading natural gas pipelines cheered DOE for highlighting the issue. Natural Resources Defense Council senior policy analyst Carl Zichella pointed in an interview to the “huge public safety implication” of a multibillion-dollar program to tackle “aging infrastructure that’s becoming increasingly dangerous.”

Indeed, the DOE report says most natural gas pipeline accidents occur on distribution lines located near dense population centers. Cast-iron and bare-steel pipelines account for 9 percent of the country’s distribution pipelines even while they result in 30 percent of methane emissions from gas distribution systems, the report said.

DOE projects that investments in interstate natural gas pipelines will range between $2.6 billion and $3.5 billion annually over the next 15 years.

Modernizing pipelines also would pay dividends for Obama’s climate agenda, given the propensity for older infrastructure to leak methane. Environmentalists note that one-third of the leaks that persist come from older lines that are prevalent in the northeast, where Massachusetts Democratic Sen. Ed Markey hailed the DOE report on Tuesday and vowed to reintroduce legislation that would speed up replacement of aging pipes.

N. Jonathan Peress of the Environmental Defense Fund noted in March that although the industry has upgraded almost 40 percent of the most out-of-date pipelines as of 1990, the majority of them are still in operation “and still leaking.”

Rob Jackson, a professor of environmental sciences at Stanford who has studied pipeline infrastructure, called the QER recommendation a “great first step.”

“There are many reasons to repair and replace these old pipelines and climate change, methane emissions, that’s only one reason,” he said in an interview. “Pipeline replacement programs will improve consumer safety, improve air quality and create jobs as well.”

He estimated that a major campaign to replace the country’s aging pipeline infrastructure would take at least 10 to 20 years.

Darren Goode contributed to this report.