Pipeline leaks or commodity releases can have catastrophic consequences on the environment, the public and both the finances and reputation of a pipeline company. As a result, regulatory agencies around the world and industry groups have extensive rules, regulations or guidelines for leak detection.
However, due to the vast diversity in pipeline operational scenarios and the stringency of national regulators, many pipeline companies are left with a wide range of options when it comes to determining how to defend pipelines from unintended commodity releases.
Leak detection protocols can be as straightforward as training controllers to recognize specific conditions on the Supervisory Control and Data Acquisition (SCADA) interface that may signal a leak, or simply patrolling the pipeline every day searching for leaks.
Alternatively, many pipeline companies find themselves considering the implementation of a leak detection system (LDS) to identify and alert controllers to probable leaks, as well as their estimated location and size.
The lack of regulatory specificity, paired with the diversity of pipeline operations, has led to a number of vendor-driven solutions for leak detection. Consequently, over the last decade, a whole new market has developed with leak detection offerings from either a services or product point of view.
The methodologies available can be broadly divided into two categories:
External leak detection (such as hydrocarbon-detecting cameras or physical inspections) and internal leak detection, with the latter more commonly known as computational pipeline monitoring. Many pipeline companies are choosing to employ various mixes of these systems to meet regulatory, industry or company leak detection standards. This represents an investment by the pipeline company to install and maintain such LDSs.
Considering costs
Knowing how to approach leak detection can be a challenging exercise for a pipeline company, forcing it to weigh the costs of an LDS against the potential short- and long-term benefits. For the sake of simplicity, this article will focus on liquid pipelines, although similar systems are available for natural gas pipelines and would have a similar cost-benefit breakdown.
The benefits
The benefits to installing an LDS are both tangible and intangible.
While an experienced pipeline controller can detect a possible leak by monitoring the various inputs from the pipeline (instrumentation) on a SCADA interface, this demands a significant amount of attention, training and experience on the part of the controller to identify all but the most obvious, and likely most serious, abnormal conditions signifying a probable leak.
LDSs are designed to relieve the pipeline controller of some of this monitoring responsibility and essentially allow the controller to use time to focus on more important day-to-day operational tasks. This is a clear benefit to the pipeline company as the controller can spend more time ensuring efficient and timely operation of the pipeline instead of hunting for possible leak indications, although it is difficult to quantify.
Of course, the primary and most significant benefit of having an LDS installed is realized when an actual leak occurs, or is about to occur. Many systems use powerful algorithms to piece together multiple data sets for leak detection and are able to do so at very small thresholds. As a result, these systems are able to alert controllers, and alert them much faster, to a wide variety of potential leak conditions.
These are connections that would be difficult for a controller to recognize, especially as controllers need to focus on a large number of functions.
A trained controller with a properly designed LDS can identify a leak and take appropriate actions, such as shutdown and invoking sectionalizing valves, quicker than without a detection system. In the case of certain kinds of leaks, response times can improve by hours, or even days, saving hundreds of thousands—if not millions—of dollars in lost product, clean-up fees and regulatory fines.
Appropriate response
Certain LDSs cannot only improve the identification, but the response to a potential leak, providing controllers with the estimated location and size of the leak. Once the system identifies the leak, controllers use the location and size estimations to take the most appropriate action and dispatch response crews to more specific locations to begin repairs and clean up.
These factors would indicate that the amount of product that spills out at the leak site would in some circumstances be significantly less than without the LDS installed. Not only that, but containment and clean-up could begin sooner, and operations could resume faster.
Although no spill of liquid is acceptable, reducing the volume of the spill and speeding up the response is beneficial to the pipeline company, the general public and the environment as a whole.
Another, somewhat intangible, benefit of a strong LDS is its ability to improve the pipeline company’s standing with regulators and communities along proposed pipeline routes. When a pipeline company installs an LDS that is reliable and proves to find leaks accurately, this data should be shared to convince the public and regulators that the pipeline is well protected. This demonstration of transparency can speed the approval process and reduce resistance to development. At the same time, installing an LDS should allow the pipeline company to lower the premium for insurance associated with the pipeline.
Conversely, the consequences of inadequate leak detection solutions can have broader effects that go beyond immediate financial penalties for both the affected pipeline company and the industry as a whole.
Pipeline leaks resulting in major spills can lead to sanctions on the pipeline company, an increase in negative opinions toward pipeline development and additional government regulations.
The costs
When a pipeline company decides, or is required to, install an LDS on its pipeline (whether new or existing), significant assessments need to take place to establish which vendor and which methodology should be used. In some cases, outside consultants are used or the pipeline company may designate a specific internal person or team to investigate.
The outcome of such an investigation identifies the type of methodology appropriate for the pipeline to deliver desirable leak detection capabilities or that is required for the specific pipeline. This selection process could take years in some circumstances, although is normally done within a year of inception.

After selecting a vendor and methodology, implementation of the LDS begins. The vendor normally performs most of the work, but the pipeline company is involved during key phases of the implementation to ensure the vendor is making progress, and what is being implemented meets original specifications for the pipeline LDS. This interaction should happen during a functional design stage before physical implementation and normally takes place during the testing stage, whether at the vendor location or on pipeline company premises.
After installing an LDS on a pipeline asset, maintaining it regularly will ensure the leak detection capability does not degrade over time. The vendor that installed the LDS will normally have a maintenance agreement that the pipeline company can opt to sign.
This maintenance agreement can be as flexible as the customer feels is necessary to maintain the goals of the LDS. Some vendors provide weekly, monthly, quarterly or yearly analysis services to establish how the LDS performs over a period and make adjustments accordingly. Other vendors provide upgrades to its hardware or software on a regular basis, allowing the customer to upgrade to the latest release of the LDS on a set frequency.
When changes occur on the pipeline asset, such as introducing a new block valves or a new delivery point, the LDS needs to reflect these. Depending on the pipeline company’s resources, some of these changes could be done internally, while others might require the vendor’s assistance.
Many pipeline companies do underestimate the effort it takes to operate and maintain an LDS, especially if it is not working as expected, and an improperly maintained LDS is not trivial. The cost of disturbing the pipeline controller in the control room with spurious alarms from an incorrectly working LDS is difficult to quantify and dangerous to the public in general, as it contributes to controller overload.
An example
To demonstrate the breakdown of the benefits and costs, one can look at an example pipeline with a set of basic characteristics. For this example, a pipeline has been created based on the following definition:
• The design life of the pipeline is 30 years and is only operational for that period of time;
• The pipeline transports hazardous liquid across both farmland and urban areas;
• The pipeline is 100 miles long with a diameter of 24 inches;
• A pipeline integrity management program is in place for preventative activities;
• A new LDS is installed during first year of pipeline operation;
• The pipeline contains infrastructure/instrumentation that befits the LDS; and
• The LDS meets pipeline company requirements for leak detection capability.
The LDS is continually upgraded/updated through maintenance/support services provided by the vendor, and it is assumed that the pipeline company agrees to a new five-year maintenance agreement during these upgrades. The operating expenses should increase with 15% every five years.
During its life span, three actual leaks occur, as follows:
1. In year five, there is an incident at a pump station that spills a small amount of liquid not detected by the LDS;
2. In year 16, there is an incident occurring on farmland detected and located by the LDS within five minutes, limiting the spill to a medium amount rather than large amount; and
3. In year 25, there is an incident in a populated/urban area detected by the LDS within five minutes, limiting the spill to a medium amount rather than large amount.
Based on this scenario, the following cost-benefit analysis can be made if we assume that the beneficial value is increasing with inflation at around 3% per year.
As can be seen from the adjoining tabulated values, the benefits of installing an LDS if no spill occurs are less than the costs the pipeline company faces for installing and maintaining such a leak detection system. However, it also is clear from the tabulated data that installing an LDS before a spill occurs reaps significant benefits.
As the analysis shows, if no leak were to occur over the lifetime of a pipeline, the costs of installing and maintaining an LDS are likely to outweigh the benefits in a strictly financial breakdown. However, even minimizing the damages of one leak can make the system worth its overall costs, not to mention the intangible value of preserving the company and industry standing with regulators and the public.