Pipeline Safety Update - Issue No. 111

August 10, 2016

Jury Returns Mixed Verdict in PG&E Criminal Trial Regarding San Bruno Pipeline Incident

On August 9, the jury returned a mixed verdict against Pacific Gas & Electric (PG&E) in the criminal trial involving the rupture and explosion of a gas transmission line in San Bruno, California in 2010. 

The company was found guilty on five counts of knowingly and willfully violating integrity management requirements under Part 192 of the federal gas pipeline safety regulations and not guilty on six counts of violating Part 192 recordkeeping requirements.  The jury also found PG&E guilty on one count of obstructing the National Transportation Safety Board’s (NTSB) investigation of the incident in violation of section 1505 of title 18 of the United States Code. 

Specifically, the jury found PG&E guilty of knowingly and willfully violating the following integrity management regulations for covered segments of a gas transmission line: 

  • Section 192.917(a):  Identifying and evaluating potential threats;
  • Section 192.917(b):  Gathering and integrating data and information regarding potential threats;
  • Section 192.917(e)(3):  Prioritizing covered segments as high risk after a changed circumstance rendered manufacturing threats unstable;
  • Section 192.917(e)(4):  Prioritizing covered segments as high risk after a changed circumstance rendered manufacturing threats unstable and failing to analyze such segments to determine the risk of failure from those threats; and
  • Section 192.919:  Including all potential threats in a baseline assessment plan and choosing the most suitable assessment method.

The jury found PG&E not guilty on 6 counts of knowingly and willfully violating regulations requiring the maintenance of repair records (Section 192.709(a)) and pressure test records (Section 192.517(a)).

Before the case was submitted to the jury, the judge instructed that the term “willful” under the Pipeline Safety Act requires only a finding that the company disregarded the statute and displayed an indifference to its requirements.  The jury was not required to find specific intent to disregard or disobey the law to reach a guilty verdict. 

The judge will determine the sentence for the convictions.  Under the Alternative Fines Act, if a defendant financially gained or caused a financial loss to another person as a result of the offense, a defendant may be fined an amount that is twice its gross gains as a result of the offense, or twice the victims’ gross loss.  However, on August 2, the United States Attorney withdrew the sentencing allegations under the Alternative Fines Act.  Therefore, the maximum fine for each conviction is $500,000, for a maximum total fine of $3 million.

PG&E has until August 16 to request that the court set aside the verdict based on insufficiency of the evidence to sustain the conviction.  

Van Ness Feldman has prepared an overview of the Protecting Our Infrastructure of Pipelines and Enhancing Safety (PIPES) Act of 2016, and a redline showing how the PIPES Act modified the legislative text of the pipeline safety laws.  For copies, contact Susan Olenchuk at SAM@vnf.com or Bryn Karaus at BSK@vnf.com

PHMSA Rulemaking UpdateThe tables below summarize the status of the Pipeline and Hazardous Materials Safety Administration’s (PHMSA) rulemakings as reported in the Department of Transportation’s (DOT) July Significant Rulemaking Report and by OMB’s Office of Information and Regulatory Affairs (OIRA) in the Spring 2016 Unified Regulatory Agenda.  

Pending Notices of Proposed Rulemaking

Rulemaking

DOT Estimated Submission to OMB*

DOT Estimated Publication

OIRA Estimated Publication 

Valve Installation and Minimum Rupture Detection Standards

January 24, 2017

May 3, 2017

September 2016

Periodic Updates of Regulatory References to Technical Standards and Miscellaneous Amendments

Not listed by DOT

Not listed by DOT

July 2016 

State Pipeline Safety Program Certification

Not listed by DOT  Not listed by DOT  August 2016

 

Pending Final Rules

Rulemaking

DOT Estimated Submission to OMB*

DOT Estimated Publication 

OIRA Estimated Publication 

Safety of Hazardous Liquid Pipelines  September 12, 2016  December 20, 2016 October 2016

Expanding the Use of Excess Flow Valves in Gas Distribution Systems to Applications Other than Single-Family Residences

August 19, 2016

November 30, 2016

January 2017

Underground Storage Facilities (interim final rule)

 September 9, 2016  December 19, 2016 August 2016 

Safety of Gas Transmission Pipelines

Information Unavailable   Information Unavailable Information Unavailable

Inflation Adjustment of Maximum Civil Penalties

 Not listed by DOT Not listed by DOT   Issued June 2016

Issues Related to the Use of Plastic Pipe in Gas Pipeline Industry

 Not listed by DOT  Not listed by DOT  October 2016

Operator Qualification, Cost Recovery, Accident and Incident Notification, and Other Pipeline Safety Proposed Changes

Not listed by DOT

Not listed by DOT

 October 2016


  

*Under Executive Order (EO) 12866, OMB reviews proposed significant rules to ensure they are consistent with applicable law, the President’s priorities, and the principles set forth in the EO, and to ensure the proposals do not conflict with another agency’s policies or actions.  OMB also analyzes the cost-benefit analyses in support of the proposals.  While the EO sets out deadlines for OMB evaluation, review periods are often extended.   

UPDATES FROM PHMSA

PHMSA seeks comment on information collection request relating to hazardous liquid pipeline integrity management program.  On August 4, PHMSA issued a notice announcing that it is submitting to OMB for review and approval, and requesting comments on, a proposed information collection request (ICR) pertaining to PHMSA’s hazardous liquid pipeline integrity management program.  Comments are due September 6, 2016.  PHMSA’s notice of this ICR was first published on March 9 and PHMSA received no comments. 

UPDATE ON LITIGATION

DOJ and Enbridge reach settlement for 2010 pipeline spillsThe Department of Justice (DOJ) and Enbridge have lodged a proposed Consent Decree with the United States District Court for the Western District of Michigan to settle claims under the Clean Water Act and the Oil Pollution Act relating to two oil transmission pipeline failures that occurred in 2010.  The proposed settlement includes $62 million in civil penalties and requires Enbridge to reimburse the government for past and future removal costs, remove Line 6B from service, replace Line 3, and establish an inspection and spill prevention program across its Lakehead system.  The Consent Decree is subject to a 30 day notice and comment period.  The case is United States v. Enbridge Energy, Limited Partnership, et al., Civil Action No. 1:16-cv-914.

UPDATES FROM INDUSTRY

PAPA releases Summer 2016 newsletter.  The Pipeline Association for Public Awareness (PAPA) released its Summer 2016 newsletter containing information about pipeline safety and awareness for public officials.  PAPA is an organization that promotes communication and cooperation with local organizations to enhance public safety, improve emergency preparedness, protect the environment and prevent property and facility damage.

 

To download a full text PDF, which includes Dates of Interest, upcoming PHMSA State Seminars, and State Specific Association Meetings, please click here.