The Fine Print: How Big Companies Use "Plain English" to Rob You Blind (19 page)

Pipeline safety is the responsibility of the federal Department of Transportation and two agencies under its umbrella. “Safety is the number one priority,” department spokesperson Maureen Knightly told me. She said the agency conducts eight hundred to nine hundred inspections a year and “reviews all available data to determine inspection frequency and focus.”

A very different view comes from Carl Weimer, executive director of the Pipeline Safety Trust. It is funded with $4 million of the penalties paid in the Bellingham disaster. Weimer considers the Transportation Department’s safety-first claims almost laughable.

“The overarching problem with the current pipeline safety regulatory system is the undue influence that the pipeline industry has on every aspect of how those regulations are designed and enforced,” Weimer said. “The industry deluges rule-making processes with their public relations people and lawyers, and most regulators have either come from the industry they now regulate or plan to go to work for that industry once they leave government service.”

At pipeline safety conferences, Weimer said, he is often the only person present who is not an industry advocate or regulator. As far back as 1978, the investigating arm of Congress, now called the Government Accountability Office, issued scathing reports about incompetence, weak rules and ineffective enforcement by the Transportation Department’s Office of Pipeline Safety. Pacific Gas & Electric was repeatedly found to
have violated safety rules in its natural-gas pipeline system, yet was not fined once prior to the deadly San Bruno blast.

Even the American Petroleum Institute, which represents big oil companies, criticized the pipeline safety office over the poor quality of its accident records. Yet the industry as a whole has worked hard to make sure that not enough money is spent to properly inspect pipelines. Six months after the Bellingham disaster, the chairman of the agency that investigates pipeline disasters, the National Transportation Safety Board, told the Association of Oil Pipelines that its efforts to keep the pipeline safety office short of funds and unable to effectively regulate for safety would backfire. Safety board chairman Jim Hall said that “no American would want to use any transportation vehicle that would not be properly inspected for 48 years, nor should we have pipelines traveling through any of our communities in this condition.” His words drew no applause. Hall said that to get the industry’s attention, criminal charges and prison sentences might be necessary.

The pipeline industry lawyer whom the Obama administration made head of the federal Pipeline and Hazardous Materials Safety Administration, Cynthia Quarterman, said after the San Bruno blast that “we inherited a program that suffered from almost a decade of neglect.” She is wrong about that. The neglect goes back long before the George W. Bush administration.

The entire federal and industry approach to pipeline safety stands in stark contrast to the way government and industry deal with airline safety issues, where the focus is on preventing crashes through the use of engineering, analysis and data collection. Rick Kessler, a pipeline engineer who worked on pipeline issues as a Capitol Hill staffer, now serves as a volunteer vice president of the Pipeline Safety Trust. How bad is the current system? Kessler told me that if the Federal Aviation Administration operated on the same rules as pipeline safety regulators, “I wouldn’t get on a plane.”

Inspecting pipelines for corrosion, faulty welds and damage from earth movements, both natural and by excavators, is one of the best ways to reduce the chance of rupture. Yet buried in the fine print are government rules that discourage shutting down pipelines to inspect, maintain or replace them before they fail, in effect shifting the risks of pipeline disasters from pipeline owners on to unwitting Americans.

Instead of replacing corroded pipelines, the owners just
de-rate
them. “De-rating” means reducing the maximum pressure allowed from, say, 1,500 pounds per square inch to 1,200 pounds. As corrosion eats through more of a pipeline’s steel wall, the pressure maximum may be reduced
again and again based on calculations estimating the rate of corrosion. In theory, if the engineers guess right about the rate of corrosion, the pipeline will keep operating at lower and lower pressures until it is no longer profitable and will then be replaced or abandoned. In the meantime, as if engaged in some sort of life-or-death power game, they bet on the balance of corrosion and pressure.

Water and other liquids often contaminate natural-gas pipeline flows, despite industry efforts to dry out gas before it is sent through high-pressure pipelines. Liquids speed corrosion, especially in low-lying segments of the pipe, where the liquid tends to pool. The NTSB found that salts, sulfur and other contaminants had rusted the Carlsbad pipeline at a low-lying spot. The deaths of the twelve campers show that engineers estimating the speed at which corrosion weakens pipeline walls sometimes get it terribly wrong.

Gordon Allen Aaker Jr., a pipeline engineer in Kingwood, Texas, who consults on safety issues both to pipeline companies and those who sue them, sees de-rating as a dangerous policy that sends the wrong message to the pipeline industry. “Allowing producers to de-rate the pipeline does not give them any incentive to maintain the pipeline,” he said. Why, Aaker asked, would companies shut down a pipeline (and the flow of revenue) to make repairs “when they can just de-rate it?”

The safety factors built into pipelines are slim, according to Theo Theofanous, a professor of civil and chemical engineering at the University of California at Santa Barbara and director of its Center for Risk Studies and Safety. Theofanous served on a National Academy of Engineering committee that wrote a 144-page report in 2004 that focused on the risks of development coming to rural areas with aging high-pressure pipelines. Its recommendations were softened at the insistence of industry representatives, the professor said, muddling some issues and avoiding the exploration of others, including improving technology to detect corrosion and other damage.

Theophanous said the rules on corrosion and other damage to pipeline walls are not nearly stringent enough and allow unnecessary risks. Nor is enough margin of safety built into their design.

“[A] safety factor of two not uncommon in situations involving high pressures, even if the consequences of failure are modest,” Theofanous said. A factor of two means that the pipeline must be twice as strong as the minimum needed to contain its maximum pressure. Yet many high-pressure pipelines are built with a safety factor of just 1.4, meaning they have only 40 percent more strength designed into them than is necessary,
not twice as much strength as needed. Federal pipeline safety regulators routinely allow these safety margins to be weakened as corrosion eats into pipeline walls and pipelines are operated at lower pressures.

“Safety factors are employed to provide a margin of safety against unexpected causes,” Theofanous said. “It is not good engineering practice to use them against known deterioration of the structure.” Doing so means that after the pipeline has deteriorated, the safety factor will be even slimmer.

The federal officials whose responsibility is to keep us safe from pipeline explosions hold a very different view. They have been granting “special permits” for segments of high-pressure pipelines that are supposed to be inspected under the 2002 law. While the federal Department of Transportation calls them “special permits,” that is just another euphemism for inspection-rule waivers.

In reading some of these waivers, I noticed that they seemed not to say what was presumably intended. Five safety waivers were issued to Empire Pipeline LLC, a subsidiary of National Fuel Gas in suburban Buffalo, New York, for nearly two miles of pipelines because of the difficulty involved in inspecting the pipes, which vary in diameter. As written, the permits set limits: Empire Pipeline may pump gas through when corrosion has eaten through 72 percent of the pipeline wall not covered by the safety waiver and, where the safety waiver is in effect, 80 percent along segments. After confirming with Professor Theofanous and others that the permit was actually intended to say the reverse—requiring repairs at 28 percent corrosion for the main areas and 20 percent for the waivered areas—I notified both Empire’s president, Ronald Kraemer, and Secretary of Transportation Ray LaHood’s office.

Kraemer told me that he did not understand. After I explained the error, Kraemer did not follow up; nor did LaHood’s office. If the Empire pipeline ever blows up, what is reported here will almost certainly become a full-employment act for litigators, thanks to the studied inaction of both the company and the government when notified of this potentially lethal mistake.

PEERING INTO THE PIPES

The Empire pipeline segments with waivers aren’t easy to find; although the pipeline safety administration that issues these permits discloses their location, the language is, at best, cryptic. Here is a typical description, for
a third of a mile segment of the Empire State Pipeline in Western New York, that was given a safety waiver:

Just where is this one-third-mile-long pipeline? Unless you know the proprietary mile marking system that the pipeline company uses, you cannot tell. Does it run through a wheat farm or along Church Street? Past a wooded lot or a hospital? If you request map coordinates, street intersections or street addresses at the start and end of the section, neither Empire nor Transportation Secretary LaHood’s office nor his agency’s Pipeline and Hazardous Materials Safety Administration will tell you.

The reason for this secrecy, LaHood spokeswoman Maureen Knightly told me, is official concern that terrorists might blow up the pipeline segments. Knightly was subsequently incensed when, in reporting this for the Web site remappingdebate.org, I paraphrased her words and cited Al Qaeda by name. “I never said ‘Al Qaeda,’” an angry Knightly said, missing the point. With easily identifiable pipelines in places like Manhattan, media-savvy zealots who want to scare us into thinking their worldview is superior aren’t likely to target a section of pipeline in the Finger Lakes region of New York. But this misguided secrecy on the part of federal pipeline safety regulators does mean that people along the Empire Pipeline route are ignorant of the fact that they are living, shopping, playing and going to schools near pipelines that have been given inspection waivers and are still allowed to operate when pipeline walls may be 80 percent corroded.

Although the means to inspect inside pipelines exist, the principal method of detecting gas leaks is to fly overhead and look for desiccated grass and trees (leaking natural gas kills plant life at the roots). That may be adequate for slow leaks, but not sudden ruptures in which tearing metal can create sparks.

Internal inspections are done using in-line inspection tools. So-called “pigs” employ lasers and magnets to identify corrosion, weak welds and other signs of wear and damage. Not only had a pig never inspected the Carlsbad pipeline, the San Bruno pipeline also went more than a half century with no internal inspection. Pacific Gas & Electric explained that was because the pipeline varied in diameter, preventing use of a pig.
San Bruno Mayor Ruane told me that PG&E’s rationale troubles him. “We put a man on the moon decades ago and we can’t build a pipeline pig that can measure pipelines of varying size?”

Professor Theofanous said the problem could have been solved long ago. “Yes, there are engineering problems, but the reason they have not been solved is a failure of will, not skill,” he said. He explained that a prototype pig capable of moving through a pipeline of changing size is being tested, but is not yet in field use.

Even when pigs are used to check inside a pipeline, government rules allow inspections to be conducted as infrequently as once every seven years. Seven years is too long in the view of Theofanous and some other experts. The Transportation Department’s Pipeline and Hazardous Materials Safety Administration agrees, at least in some of the safety waivers it grants. Some of them require external inspections every four years.

There are other ways to detect leaks, one of which could be a boon to consumers. The pipeline industry’s rules allow 5 percent of natural gas to go missing between the wellhead and the consumer, who gets charged for the full 100 percent. In Texas the rules are so loose that up to 30 percent of gas can just vanish. The industry says these loose measurements are needed because of shortcomings in gas meters. While that may have been true at one time, it isn’t with modern technology that can detect pinprick leaks.

In the Carlsbad disaster, the NTSB made other troubling findings. Prior to the explosion, the federal Office of Pipeline Safety found no flaw in El Paso Natural Gas training and procedures for dealing with corrosion; after the blast, the pipeline safety office determined that corrosion control was “not carried out by, or under the direction of, a person qualified in pipeline corrosion control methods. This is because [El Paso Natural Gas’s] corrosion personnel have not received the informal or formal training necessary to perform the tasks required to implement the corrosion control procedures.” So the regulators were clueless and the company lackadaisical. Neither suggests a vigorous focus on safety, much less basic competence.

That any pipeline inspections are required in our nation is only because of the insistence of people in Bellingham, including the parents of the three youths, who couldn’t believe it when they discovered that no law required pipeline inspections. The local federal prosecutor, incensed over what he considered the pipeline company’s blasé attitude, saw to it that the $4 million penalty paid by the pipeline company was used to create the Pipeline Safety Trust (pstrust.org). The trust lobbied for the
Pipeline Safety Improvement Act of 2002, which covers large-bore lines that convey fuels, but not the small-bore transmission lines that distribute natural gas to homes and offices.