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California Utility Criminally Indicted In Pipeline Blast, But Not Any Individuals

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Federal prosecutors indicted PG&E Corp. for failing to properly monitor its pipeline system and for neglecting to keep decent records, all of which is related to the 2010 pipeline blast that killed eight people in its Northern California territory.

A key question is whether the federal prosecution of PG&E -- as opposed to the managers who failed to perform their duties -- is fair or effective. At least one former federal prosecutor who specializes in environmental crimes and who is now a law school professor says that charging a “faceless” corporation and not holding individuals accountable is hardly a “criminal deterrent.”

“Somebody had to decide not to keep those records,” says Jane Barrett, professor of law and director of the Environmental Law Clinic at the University of Maryland Carey School of Law, in an interview in which she stressed that her knowledge of the case comes as that of an observer and not a participant. “Decisions to ignore the law and to fail to do what is required are made by people and not a faceless corporation.”

PG&E was charged Monday with 12 pipeline safety violations under the Natural Gas Pipeline Safety Act. Each count comes with a maximum penalty of $500,000, or $6 million total -- a dollar figure that Barrett calls “ridiculously low," considering the loss of life and the physical devastation -- especially when compared to other corporate criminal fines.

Besides killing eight people, the September 2010 explosion in San Bruno, Calif. destroyed entire neighborhoods. The criminal fines are one element of the story. There’s also the component of civil law suits as well as who pays what with respect to the pipeline upgrades that are now required.

Earlier, the National Transportation Safety Board had assigned much of the blame for the San Bruno blast to PG&E. It had said that the utility had no methods in place to detect structural weaknesses in its pipeline as well as the fact that it had no shut-off valves that would have limited the explosion’s severity.

That event preceded some other accidents whereby the main cause had been older lines, which had suffered from corrosion that had led to leakage and destruction. In January 2011, a cast-iron pipe in Philadelphia blew up, killing a utility worker and maiming five others. A similar accident a month later in Allentown, Pa. caused five fatalities.

And, in December 2012, a gas pipeline explosion occurred outside Charleston, W.V. that destroyed several properties. That line is owned by NiSource and run by Columbia Gas Transmission. In March 2014, a Consolidated Edison pipeline blew up, leveling two buildings in East Harlem and killing eight people.

“Pipeline operators are required by federal law to have an integrity management system ... If a pipe is properly managed and a risk assessment properly done, then age should not be a factor," says Robert Sumwalt, board member with the National Transportation Safety Board, at a press conference after the ConEdison incident.

If there is a silver lining here, it is that those crises have facilitated further discussion about updating and expanding the nation’s vast natural gas pipeline infrastructure: 2.4 million miles of existing interstate and oil gas pipelines are in the United States as well as 1.8 million miles of shorter distribution lines. That’s according to the Pipeline and Hazardous Materials Safety Administration, which adds that 7 percent of the current lines are classified as “high consequence areas,” which means that people can be killed if accidents happen.

Transmission lines in less dense areas do not need to be inspected at all, says the Pipeline Safety Trust, in an email. It goes on to say that the national laws have too little teeth -- that much more could be done to try and prevent the kinds of pipeline accidents that have occurred in recent years. The question then becomes how do regulators patrol such a vast network of pipelines and what is an operator’s role in ensuring that federal guidelines are met?

California says that its measures signed into law in 2011 are effective. The state is requiring the utilities commission there to track the funds used to make repairs to existing lines. Pipeline operators, meanwhile, must meet new pressure testing standards for vulnerable areas. As for the indictment against PG&E, prosecutors allege that that testing was only done for external corrosion and not internal defects.

“You can’t use loopholes, cut corners and count on the fact that there are not enough enforcers to catch you,” says Professor Barrett. It’s tantamount to the expansive highway system in which drivers must be counted on to do the right thing -- to drive within speed limits and to do so carefully, even though patrol cars are few and far between.

As for pipeline operators, they need to self police and to do spot checks, she says. Prevention of future accidents is dependent on holding managers accountable for the decisions they make -- to ensure they are honoring the law and not trying to evade it. “If all you do is fine corporations, the fines become a cost of doing business and the laws are meaningless."