In this paper, a leak detection method, based on an acoustic approach, is presented for tubular systems. An energy balance methodology for acoustic waves is proposed as a means to detect both the possible occurrence of a leak, as well as an estimation of its position and leakage flow rate. Information on the incident, transmitted, absorbed, reflected acoustic energy and wave amplitude will enable one to determine the leakage position, as well as its flow rate. The presence of a leak will result in a change of the wall impedance. The governing equations are derived and a finite difference scheme is used to solve them. Results are presented for variations of the acoustic energy for transmission, absorption and reflection with leak size and wave frequency. The effects of different leak sizes and pinhole positions on the propagation of an acoustic pressure wave are studied.