1. Replacing Infrastructure: Pipeline Safety and Methane Reduction Benefits 2013 NASUCA Mid-Year Meeting: June 12, 2013

2. Overview 1.Safety First 2.Consumers and the public benefit from pipe replacement. 3.Methane Emissions: It’s time to cool off the hype and engage in fact-based analysis. 4.Why replace pipe now? 2

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4. States with Infrastructure Cost Recovery Mechanisms as of June 2013 4 Source: Rethinking Natural Gas, A Future for Natural Gas in the U.S. Economy, p.6, American Gas Association, ©2012, Citing Source: Wood MacKenzie Spring 2012. See paper for outlook limitations.

5. Natural gas systems represent a small share of annual GHGs 5 its inception in 1993. Source: EPA GHG Inventory 2013

6. Natural Gas Systems Lead the Pack on Economy-wide Methane Reductions 6 Source: EPA GHG Inventory 2013

7. Technological advances, industry best practices and infrastructure investment… add up to a declining emissions trend 7 Source: EPA GHG Inventory 2013

8. Distribution: Methane Emissions Shrinking Methane emissions from distribution shrank 16 percent since 1990 … even though we added almost 300,000 (30 percent more) miles of distribution mains … to serve 17 million (30 percent) more customers Why? Because we replaced thousands of miles of existing cast iron and bare steel pipe with modern PE plastic pipe Result: EPA estimates distribution systems emitted 0.3% of produced natural gas in 2011 8

9. New data has significantly revised emissions estimates downwards 9 Source: EPA GHG Inventory 2012/2013

10. 10 Methane Emissions Estimations Declining as they become more accurate EPA 2012 Annual Inventory of U.S. Greenhouse Gas Emissions originally estimated 2.5% – 3.2% of produced gas emitted in 2010 from well to customer. New 2013 EPA Inventory only estimates 1.5% of produced gas emitted in 2011 from well to customer, and of this, only estimtes 0.3% of produced gas was emitted from gas distribution in 2011. EPA also found emissions from distribution have declined over time due to replacing cast iron and bare steel pipe.

11. Field Studies to Measure Methane from Distribution | GTI and EDF Hi-Flow Meter – Measuring Methane from Low Grade Pipe Leak 11

12. 12 LUAF is Not a Good Measure of Emissions What is Lost and Unaccounted For (LUAF) Gas? LUAF includes small amounts for gas theft and emissions, but there is no correlation between LUAF and emissions. EPA has long recognized the limitations of LUAF and rejected idea of using LUAF to measure or estimate methane emissions.

13. Why Replace Pipeline Now? 13 Safety Natural gas commodity prices are expected to remain relatively affordable and stable

14. The U.S. estimated future supply of natural gas (reserves plus resources) stood at 2,689 trillion cubic feet (Tcf) at year end 2012 — enough natural gas to meet America’s diverse energy needs for decades. 14 And Then There Was Abundance Future Supply of Natural Gas in the United States (1990-2012)

15. Natural Gas Price Outlook 15 Our nation’s strong natural gas supply fundamentals and robust and reliable natural gas delivery infrastructure suggest that over the next decade, a range of demand scenarios can be met by a diverse and responsive supply market within an estimated price band of $4.00 to $6.50 per MMBtu. Source: Rethinking Natural Gas, A Future for Natural Gas in the U.S. Economy, p.6, American Gas Association, ©2012, Citing Source: Wood MacKenzie Spring 2012. See paper for outlook limitations.

16. Paula Gant AGA Senior Vice President, Policy and Planning pgant@aga.org 16 Find Us Online www.aga.org www.truebluenaturalgas.org http://twitter.com/AGA_naturalgas www.facebook.com/naturalgas www.linkedin.com/company/50905 ?trk=tyah