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Utility Faces $3M Fine for Pipeline Blast

Friday, September 23, 2016

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Washington state pipeline safety regulators have recommended a fine of more than $3 million for numerous violations, including failure to perform corrosion tests, related to a March 9 natural gas explosion in a Seattle neighborhood.

According to the investigation report, released Tuesday (Sept. 20), Washington Utilities and Transportation Commission’s Pipeline Safety staff identified unsafe practices and determined the blast originated from an improperly abandoned gas line, the state regulator announced.

The decision, recommended by staff, has not yet been reviewed and approved by the three-member commission.

Leak Ignites

In the early morning hours of March 9, the Seattle Fire Department had been called to investigate a gas leak reported between two buildings in the Greenwood section of the city, the Seattle Times reported.

According to the investigation report, one firefighter responding to the scene reported seeing gas “jetting” out of a threaded pipe connection.

Approximately 40 minutes later, the accumulated gas ignited, destroying two buildings, causing extensive property damage, and injuring nine firefighters.

Puget Sound Energy (PSE) reportedly was unable to stop the leak and, as a result, the gas continued to burn for another five hours.

Several affected businesses remain shut down to this day, with others just resuming operation, KOMONews.com noted.

Improper Disconnect, Lack of Oversight

The investigation into the source of the blast attributed the immediate cause to outside force applied by unauthorized individuals to a gas service line owned by PSE. The damage allowed gas to escape and accumulate in the building, occupied by a restaurant, before igniting, staff said.

The broken gas service line was one that PSE records showed as abandoned in 2004, regulators said.

At the time, Pilchuck Contractors of Franklin, WA, which PSE had hired to perform pipeline maintenance, failed to properly disconnect and seal the line, the Times reported.

Instead, the natural gas line remained in service, with gas flowing through it for nearly 12 years without proper oversight.

Although the reportedly abandoned service line was located in a space not intended for human occupancy between the restaurant and a coffee shop, evidence at the scene and witness interviews indicated that unauthorized individuals used the space around the gas line to store personal items.

Moreover, some of those individuals told investigators that, because of the limited space, they sometimes bumped into or otherwise disturbed the gas line when accessing the area.

Lab tests confirmed the line failed at the threaded connection due to applied external force, likely from the individuals accessing the area.  

Recommendations, Violations

As a result of the investigation, the UTC filed a formal complaint against PSE alleging the company committed 17 violations of pipeline safety regulations and recommended a penalty of up to $3.2 million.

The complaint will be scheduled for a hearing before the three-member commission. The commission is not bound by staff’s recommendation.

Pipeline Safety staff allege that PSE violated pipeline safety regulations by failing to:

  • Abandon a service line according to federal standards;
  • Follow its internal pipeline deactivation plan;
  • Perform annual leak surveys of an active service line;
  • Perform atmospheric corrosion tests of an active service line at least once every three years; and
  • Perform external corrosion tests of an active service line at least once every 10 years.

Staff also recommended the commission require PSE to review all previously abandoned service lines to verify compliance and provide a plan for identifying and mitigating any additional unsuccessful retirements.

PSE Response

The utility company facing the commission’s penalties issued a statement Tuesday (Sept. 20) calling the proposed “disappointing and excessive.”

The statement read: “All parties investigating the March incident, including the UTC and the Seattle Fire Department, agree: The natural gas system at the Greenwood site was damaged by unauthorized individuals in a space not intended for human activity, with the resulting gas leak causing the explosion and fire.”

Although it disagrees with the UTC staff’s conclusions and recommended fine, PSE said it remains “committed to the safety of our customers and the community and will continue to review the report as we prepare for final disposition of this investigation by the UTC commissioners.”

Inspection Irregularities

Pilchuck and PSE were previously the subject of a 2007 UTC investigation for allegedly falsifying gas leak inspection records, according to the Times. At that time, regulators had received an anonymous tip that led them to reports with falsified inspection dates and signatures.

PSE was held legally responsible for the fraudulent paperwork, even though Pilchuck had carried out the inspections and recordkeeping. After conceding that the reports were intentionally falsified, PSE agreed to pay a settlement of $1.25 million.

Originally facing a $2 million penalty for its actions, the company was able to knock of $750,000 from the fine by agreeing to fund an audit of its inspection records and retrain employees.

Since 1992, the commission has levied enforcement actions against PSE 10 times regarding pipeline safety, the paper added.

Pilchuck Contractors, which lost its contract with PSE in 2011, was acquired by utility, engineering, design and construction contractor Michels Corporation of Brownsville, WI, in 1999.

UTC Pipeline Safety

Established by state legislature in 1955, the UTC’s Pipeline Safety Program regulates the safety practices of 31 pipeline operators and conducts safety inspections on more than 47,000 miles of gas and hazardous-liquid pipelines in Washington. The UTC also regulates the private, investor-owned natural gas utilities in the state.

PSE operates a 12,000-mile natural gas distribution system and supplies natural gas to 785,000 customers, primarily in the Puget Sound area of Washington.

The UTC sets the natural gas rates for PSE’s residential, business and industrial customers.

   

Tagged categories: Explosions; Health and safety; Inspection; Oil and Gas; Pipelines; Utilities; Violations

Comment from Alan Murray, (9/23/2016, 1:30 AM)

UNBELIEVABLE! On three counts (1) that the Contractor could have been so negligent and direlict in its contractual obligation (2) That the Operator would be unaware that gas was continuing to flow for twelve years - flow where exactly? and to blame others for causing the leak!(3) The regulators staff ,surely these fines involve double jeopardy?


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