Delivering Natural Gas

To improve gas service reliability, the company focused on a number of important initiatives last year, including an ambitious, multi-year project to replace aging copper pipe with more durable polyurethane pipe. The company also made substantial progress in an accelerated effort to survey its entire gas system over a 16-month period—a process that normally takes 3 to 4 years. Last year, this work led to the inspection of 1.1 million gas services, exceeding our target.

When combined with our routine gas leak survey program, we surveyed a total of nearly 1.9 million gas services in 2009. This work helped us identify, prioritize and address leaks faster and more efficiently, which led directly to significant improvements in the integrity of our gas system.

A potential impact associated with the delivery of natural gas is the release of methane, a greenhouse gas that is at least 21 times more potent on a per ton basis than CO₂ in terms of its effect on global warming. As reported through our participation in the U.S. EPA’s Natural Gas STAR Program, the company avoided the release of nearly 538 metric tons of methane, or approximately 11,290 metric tons of CO₂-equivalent, in 2009.

These savings were achieved primarily by replacing older cast iron and steel gas mains, and by implementing a technique called cross compression at four projects, a process by which natural gas is transferred from one pipeline to another during large pipeline construction and repair projects. Cross compression reduces the amount of natural gas vented to the atmosphere by 75 to 90 percent.

Looking forward, PG&E is making improvements to its existing gas transmission infrastructure in ways that will continue to reduce greenhouse gases as well as improve air quality in the local air-shed. This includes replacing two of the three existing gas-fired turbine compressors at its Delevan compressor station with electric motors, thereby reducing total emissions of CO₂, NO_X and SO_X from the station.

PG&E is also jointly developing a new underground storage field near Fresno with Gill Ranch Storage, LLC, with the first phase of 20 Bcf capacity expected to be operational in 2010. PG&E’s ClimateSmart™ program will offset the greenhouse gas emissions resulting from the project’s energy consumption. Additionally, the developer is minimizing environmental impacts during pipeline construction by using horizontal drills to avoid impacts to sensitive water sources and by requiring low-emission engines and limiting idling time for equipment. The project also will reduce air emissions by using electric motors to power the storage system’s five compressors and offering employee shuttles to reduce vehicle traffic to the site.

Last year’s tough market conditions presented substantial challenges for California’s biogas sector. Due to the combination of economic challenges faced by developers and PG&E’s need to focus on other priorities, we re-directed our efforts from proactively developing projects to interconnecting the projects to the grid once they are developed. Throughout 2009, however, PG&E continued to receive pipeline quality biomethane from Vintage Dairy in Fresno County. Looking forward, PG&E hopes that as the economy improves more biogas projects will be economically viable.