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PG&E pushed controversial pipeline
inspection plan
It pushed controversial pipeline inspection method
Eric Nalder and Jaxon Van Derbeken, Chronicle Staff Writers Published 4:00 am, Thursday, December 23, 2010
IMAGE 1 OF 3
Pacific Gas and Electric Co. led the successful lobbying campaign to persuade federal regulators writing natural-gas safety rules
seven years ago to endorse a pipe inspection method many experts see as deficient - the technique used on the pipeline that later
failed catastrophically in San Bruno.
A PG&E executive was one of the main industry proponents of the then-new testing regimen, interviews with people who were
involved in the rule-writing process and a Chronicle review of documents show. The federal government's decision to allow the
method saved PG&E millions of dollars because the utility didn't have to upgrade its system to accommodate other inspection
technology.
The method PG&E used in San Bruno is called direct assessment, which involves records research, surface-level electronic testing
and digging holes to spot-check small portions of buried pipelines. When the utility used it on the San Bruno transmission line in
November 2009, it found no problems.
Ten months later, the line ruptured, causing an explosion and fire that killed eight people and destroyed 37 homes. The National
Transportation Safety Board is investigating the blast and has not arrived at a cause, but said last week that it was looking into
whether a weld on a lateral seam of the pipe had failed.
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Bouquets of flowers placed on a fence along Claremont Drive are seen on Friday, December 17, 2010 in San Bruno, Calif.
Direct assessment is not designed to check for weak welds - it is most effective at detecting corrosion on the outside of pipes - and
operators are supposed to document that a line is free of such problems before they rely solely on the technique.
PG&E has defended the use of direct assessment on the San Bruno line, but also conceded that until the disaster, it was unaware
the pipeline had the type of seam weld that may have failed.
The utility has used direct assessment elsewhere on the 51.5-mile pipe running from Milpitas to South San Francisco, as well as on
much of the rest of its pipeline system.
"I think all the direct assessment techniques work very well," said Kirk Johnson, PG&E vice president in charge of transmission
pipelines.
The lobbying campaign to allow direct assessment stemmed from a law Congress passed in 2002 requiring regular gas pipeline
inspections in populated areas. Former congressional staffer Rick Kessler said lawmakers had accepted the concept of direct
assessment so the industry would buy into the law's other requirements. But he said it was the "least favored" of three test
methods listed in the statute.
Final inspection rules were left to regulation writers at the federal Office of Pipeline Safety, said Kessler, now vice president of the
Pipeline Safety Trust, an advocacy group.
That rule-making process, said group executive director Carl Weimer, is where "the details get laid." And for PG&E, the initial
details were not encouraging.
In January 2003, the Office of Pipeline Safety published proposed rules that favored the use of two inspection methods -
hydrostatic testing, in which water is run through a gas pipe at high pressure to see if it leaks, and ultrasonic assessments, in
which torpedo-shaped devices known as smart pigs are run through a line.
Both methods are far more likely than direct assessment to detect non-corrosion problems that can weaken a pipe, such as a bad
weld. But both posed problems for PG&E.
Many of its gas-transmission lines have curves, sharp angles and constrictive valves that make it impossible to accommodate
smart pigs, and retrofitting the system would take years and cost the utility millions of dollars.
Hydrostatic tests are expensive, require pipeline shutdowns and involve other complications, such as disposing of the wastewater.
Persuading federal regulators to let PG&E and other pipeline operators use direct assessment with as few restrictions as possible
was Alan Eastman's job.
Eastman was PG&E's manager of system integrity, a metallurgical engineer with the utility for two decades and an early advocate
of direct assessment, which had been cobbled together from previously used inspection techniques. He left PG&E in 2005 to
oversee direct assessment for the contracting firm that later inspected the San Bruno pipe.
Eastman had plenty of help from industry allies in the lobbying campaign.
At one public hearing in Washington, D.C., in March 2003, at which Eastman presented a case for direct assessment, U.S.
Writing the rules
Key figure
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Transportation Department executive Sam Bonasso called for a show of hands. Industry officials and contractors packed the
room, government officials were less numerous, and there was one person representing the general public: Richard Kuprewicz, a
pipeline safety consultant from Redmond, Wash., who maintained that direct assessment was inferior to other testing methods.
"Well, Rick ... you've got a big job ahead of you," Bonasso said. "Anybody wants to change sides? ... He could use some help on his
team."
In a recent interview, Kuprewicz recalled, "Let's see. There's three or four of us against 4,000. It's the American way."
PG&E spokesman Joe Molica stressed that Eastman and the utility were not the only ones pushing direct assessment.
Eastman, however, was a clear leader among his peers. A recent report prepared for a Utah pipeline company described him as
being "instrumental in development of direct assessment methods in the period 2000 through 2003."
Terry Boss, vice president of the Interstate Natural Gas Association of America, said Eastman was a "thought leader" in the battle
for direct assessment.
Besides lobbying federal regulators, Eastman worked with the head of the pipeline safety division at the California Public Utilities
Commission to pave the way for direct assessment, said pipeline engineering consultant Ed Ondak, who headed the Western
regional office of the federal pipeline safety office until 2002.
"Alan helped get a lot of that passed," Ondak said.
Eastman did not respond to requests for comment for this story.
The Office of Pipeline Safety's initial rule proposal in January 2003 created impediments for a pipe operator that wanted to use
direct assessment.
A company would have to prove to the government the necessity and viability of the technique every time it wanted to use that
method instead of running a smart pig or high-pressure water through a pipeline.
Also, at least once in a pipeline's lifetime, it would have to be tested with hydrostatic pressure unless the operator could prove that
wasn't needed.
Pipeline operators were already on record as being unenthusiastic about such tests. In a letter to the Office of Pipeline Safety in
December 2002, the American Gas Association, representing gas retailers, and a group representing public gas utilities said
hydrostatic testing should be "sparingly used."
Eastman had told regulators the year before that PG&E hadn't used hydrostatic pressure tests often. What's more, he said, the
utility had "little experience" with smart pigs, and making its lines able to accommodate them wouldn't be cheap.
The company had spent $5 million in the previous two years making just 200 miles of its 6,300 miles of transmission pipes
piggable, Eastman said.
On the other hand, he said, "Pacific Gas and Electric Co. has been effectively using direct assessment for years."
He was referring to test uses of direct assessment, a technique that wasn't formalized in industry standards until 2002.
PG&E had legitimate financial and operational issues, said Boss, and too few gas retail companies were paying attention.
"He did have a dog in the fight," Boss said, "but there were a lot of dogs out there that didn't know they had a fight."
Industry arguments in favor of direct assessment were made on technical, safety and cost-benefit terms, but the financial issues
Hurdles for test
Outside skeptics
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were always in the foreground. At the time, for example, the majority of pipelines nationally could not accommodate smart pigs.
Most of the skepticism about direct assessment came from a handful of people who had been touched by two pipeline disasters
that prompted Congress to pass the inspection law - a 1999 gasoline-line explosion in Bellingham, Wash., that burned three boys
to death, and a 2000 natural-gas pipeline blast at a campground outside Carlsbad, N.M., that killed 12 members of a family.
Carol Parker, a lawyer for the state of New Mexico, said she couldn't forget a nurse's account of how a woman mortally injured in
the campground explosion had assured her dying daughter that she would be safe in the hands of a firefighter who was carrying
her away.
She said recently that lawmakers and regulators "don't appreciate the consequences" of pipeline accidents.
"They want a rule that makes the worst company in the industry happy," Parker said, without naming any firm.
Kuprewicz, the pipeline safety consultant, recalled the "pleading eyes" of a mother of one of the boys who had been killed in the
Washington blast.
He said in 2003 that direct assessment was "seriously deficient" because it was ill-equipped to find problems other than corrosion,
a view he still holds.
Parker pointed out that maintaining accurate records on the condition of pipes is a major ingredient in establishing that a line is
suitable for direct assessment, and recalled telling federal rule-writers that pipeline operators often fall short.
In the case of the San Bruno pipeline, that concern proved valid, as PG&E was forced to admit it hadn't known the line had been
held together by a seam weld.
That's potentially crucial because the Office of Pipeline Safety never approved direct assessment to check for weak welds. If there
was a bad weld present at the time of the November 2009 inspection, direct assessment would not have been the way to catch it.
Much of what PG&E and the rest of the gas-pipeline industry sought during the rule-making process, they won.
When the final rule was published in December 2003, the major impediments to direct assessment were gone. The federal
government blessed it as a primary inspection technique not just for external corrosion, but for corrosion on the inside of a pipe
and for stress corrosion cracking.
Also gone was the proposed requirement that pipeline operators run high-pressure water through their lines at least once.
A key to PG&E's eventual widespread use of direct assessment was a provision that allowed it to consider older pipes, which are
most at risk of weld problems, as being vulnerable only to corrosion if an operator's "pre-assessment" - a review of records - ruled
out other risks.
Four months before the San Bruno blast, California auditors questioned whether PG&E was doing enough to examine those risks,
saying the utility appeared to have "preordained" the use of direct assessment. The utility denied doing so.
Julia Valentine, a spokeswoman for the federal pipeline office, defended the rule-making process, saying that without the 2002
law, there would be "no regulations that required pipeline operators to identify risks and address them."
Without direct assessment, she added, pipelines couldn't be checked if they couldn't accommodate smart pigs or be shut down for
hydrostatic testing.
Today, former PG&E executive Eastman is a vice president for Mears Group, in charge of direct assessment, overseeing the
contract work on PG&E's lines.
Ondak, the former pipeline safety agency official, said he had been impressed by Eastman's grasp of the issues and recalled him as
being "very honest in what he was doing."
Industry wins
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But he was concerned about Eastman's movement through industry's revolving door.
"They (Mears) were the very people who PG&E brought in to do the assessment of the pipelines," Ondak said. "To me it was
shocking - it just felt like it was a conflict of interest, like feathering our own bed."
So far, PG&E has run smart pigs through 21 percent of the gas transmission lines it has tested under the federal law and run
high-pressure water tests on just 2 percent. It has used direct assessment on the rest.
By contrast, Southern California Gas Co., the state's largest gas retailer, has run smart pigs through 80 percent of the lines it has
tested.
PG&E's Johnson declined to discuss why the company relies so heavily on direct assessment. He said the company's greatest
concerns are third-party damage by people who dig near pipelines and external corrosion, and added: "You have to pick the right
tool for the right job.
"We go straight by the code," he said.
Bonasso, the now-retired government executive who took roll at the 2003 meeting, says PG&E's reliance on direct assessment is
disappointing.
"That's unfortunate, as many people as they serve," he said. "It's too bad that they don't have better technology."
Different approaches
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