PG&E Cut Back Pipe Replacement Program In 2000

PG&E sharply curtailed a program in 2000 that had replaced portions of the pipeline that exploded under San Bruno and hundreds of miles of other aging gas-transmission pipe in the previous 15 years, a pullback that California regulators allowed, a Chronicle investigation has found.

Pacific Gas and Electric Co. sharply curtailed a program in 2000 that had replaced portions of the pipeline that exploded under San Bruno and hundreds of miles of other aging gas-transmission pipe in the previous 15 years, a pullback that California regulators allowed, a Chronicle investigation has found.

When PG&E told the California Public Utilities Commission that the company was "no longer committing to just replace pipe," the chief of the agency’s utilities safety branch expressed concern but concurred, records show.

"We are on the same page," Alan Eastman, then PG&E’s director of system integrity, wrote in a 2000 memo to his company colleagues about his discussions with the commission official.

Loretta Lynch, who was president of the commission in 2000, said Friday that she was "astonished that a midlevel bureaucrat approved such a change"—although she added that it fit a pattern because PG&E was aggressively resisting state oversight at the time.

Now, in the wake of the explosion of the 54-year-old pipe in San Bruno that killed eight people and destroyed 38 homes, the state agency is demanding that PG&E either prove that its old pipe is safe or replace it. PG&E has promised to comply, though it is having great difficulty finding relevant safety records on its aging pipe.

There was no such confrontation 11 years ago.

Before and after

From 1985 to 2000, before PG&E changed course, the company replaced 343 miles of gas transmission pipe in Northern and Central California, according to records on file with the Public Utilities Commission. Included in that were 65 small portions of the pipe that ran from Milpitas through San Bruno and up to San Francisco, though not the section that failed Sept. 9, according to company records.

Over the next nine years, PG&E originally planned to replace an additional 212 miles of pipe. Instead, it dug up and changed fewer than 30 miles.

One of three recent appointees to the five-member commission, Mike Florio, said last week that it may be time to renew the old program.

"There was that program for a reason—I was not aware that had stopped," said Florio, an attorney who was with the advocate group The Utility Reform Network before joining the commission in January. "I think that going forward, we are going to have to start it again."

In the wake of the San Bruno disaster, Florio said, "we are going to have a much more aggressive program and new rules to make sure we have safety."

About two-thirds of the 5,700-plus miles of transmission pipeline in PG&E’s system dates from before 1970, an age that makes it more likely to have been constructed with welds considered more prone to failure than modern pipe.

Ironically, the company cut back on its replacement program in 2000 as it prepared for safety changes it correctly expected the federal government to impose.

Those changes, which Congress required in 2002, required pipeline companies to inspect all transmission lines running through populated areas. In California, the Public Utilities Commission was given the job of overseeing the process.

To get a jump on things, PG&E created its risk management program in 2000 and gave it responsibility for replacing transmission pipe. Until then, the task was handled by a unit PG&E created in 1985 called the Gas Pipeline Replacement Program.

With the shift came an emphasis on pipeline inspection rather than replacement.

PG&E pipeline officials, including Eastman, told the Public Utilities Commission that the "only mitigation option" available to them under the 1985 program was "replacement or abandonment" of pipe, records show.

After the change, the company relied extensively on a newer mathematical formula it created—an algorithm—to compare pipelines for safety. Pipe that PG&E once singled out for replacement was kept in part because it passed the test, company records show.

A PG&E internal audit in October 2009, however, found that the company’s mathematical scoring system had "significant weaknesses" and had "fallen out of favor" in the industry. It ignored age-related threats like fatigue and carried an "inherent risk of bias" that could result in a "masking of risk issues," the audit said.

In the hands of companies such as PG&E that have incomplete or misleading information on their pipelines, the math can create false reassurances that a pipe is safe, said Bob Bea, a UC Berkeley engineering professor who has studied the use of such algorithms.

Focus on smaller pipe

After 2000, PG&E’s pipeline replacement program didn’t cease—it just focused on smaller-diameter distribution pipe.

Yet by any measure, transmission pipe can cause far more damage than distribution pipe. Transmission pipe operates at extremely high pressure and ranges in size to more than 3 feet in diameter, compared with less than a foot for distribution pipe.

The 30-inch-diameter San Bruno pipeline spewed fire for hundreds of feet in all directions when it ruptured Sept. 9. Other lines in PG&E’s system operate at almost three times the pressure that the San Bruno line carried.

"If you’ve got transmission lines that go through neighborhoods, that’s a big risk to the public," said Robert Eiber, one of the country’s senior pipeline safety engineers.

Even so, distribution lines got more replacement money and, today, they are on average much newer than PG&E transmission lines, according to federal records. Only 43 percent of PG&E’s distribution lines predate 1970, while two-thirds of its transmission lines are older than that.

Key year for gas safety

The year 1970 was key for gas safety, because after 1970, federal law required better welding techniques on pipes. The 1956-vintage San Bruno pipe ruptured at a bad seam weld, according to National Transportation Safety Board tests.

The tests also showed there were bad girth welds holding the doomed segments of pipe together, which should have made it an early target under the criteria of the 1985 replacement program.

Records show that the original 1985 program was initially focused on the replacement of pre-1931 pipe, cast-iron distribution lines and transmission lines with girth welds that don’t meet current standards. Later, PG&E added lines that had been built between 1931 and 1970, along with transmission pipe that is threatened by earthquakes.

More pre-1970 pipe is on the 51-mile San Bruno line—86 percent—than is on the average PG&E line, records show.

PG&E spokesman Joe Molica said splitting off the transmission pipe replacement program in 2000 made sense at the time.

Molica said that after the federal law changed in 2002, PG&E spent more money on safety, not less. The goal was a "reduction in systemwide pipeline risk," he said.

Cast iron is mostly gone from the PG&E system today. But the company operates 267 miles of steel transmission pipe that dates from before 1940.

As recently as a year ago, PG&E had 23 miles of 1930-vintage transmission pipe on a priority list for replacement because of concerns about manufacturing defects such as flawed welds and other design issues, records show. The pipe isn’t scheduled to be replaced for another one to three years unless PG&E speeds up the process, which it has indicated since the San Bruno disaster that it will now do.

Molica noted that after the San Bruno disaster, PG&E established "a longer-term program to modernize its transmission pipeline system," although the company hasn’t provided many specifics.

Back in 2000, Eastman was the PG&E official who discussed the change in the pipeline replacement program with the state Public Utilities Commission’s safety chief, Mahendra Jhala.

"He said his primary concern was to ensure that the program wouldn’t significantly cut spending below appropriate levels," Eastman wrote in a June 2000 memo to company colleagues.

Eastman said he had replied that "it wasn’t a scenario where we had projected $20 million and were only spending $1 million." In the end, Eastman said, he and Jhala were "on the same page" regarding the company’s new risk management approach.

"He understands we are using it for managing the risks on our gas transmission system only, and understands that we are no longer committing to just replace pipe to manage these risks," Eastman said.

Jhala, who retired in 2001, said he didn’t recall his conversations with Eastman.

"There were never enough resources to do everything," he said. "Every year we used to fight for budget. For manpower. We never got what we asked for to do the right job."

Eastman, who now works for the pipeline testing firm Mears Group, has not responded to interview requests.

Changed focus

To measure transmission pipeline safety after 2000, PG&E focused on a type of inspection technique known as direct assessment that isn’t appropriate for most problems associated with vintage pipe.

The federal government says direct assessment can’t be used to detect aging pipeline problems such as bad welds. It is best used for external corrosion, which can affect all ages of pipe.

The San Bruno pipe ruptured at a bad seam weld that was missed in a PG&E direct assessment inspection in 2009, according to National Transportation Safety Board records.

The pipe that exploded, known as Line 132, runs from Milpitas to San Francisco. Parts of the line were replaced before the post-2000 cutbacks, but not the portion running under San Bruno.

Between 1985 and 2000, 65 segments of the line were replaced, totaling 2.8 miles, including sections just south and north of the blast site. During one project in 1995, the company stopped just yards short of replacing the defective pipe that caused September’s explosion.

Company records also show that at the time of the San Bruno accident, PG&E had plans to replace an additional 1.4 miles of the pipeline. That section, dating from 1948, is located 3 miles north of the blast site.

As it stands today, Line 132 is an original relic, with 70 percent of its mileage dating to its earliest installation years of 1944, 1947 and 1948, company records show.

The situation could have been better.

In a 1993 briefing, PG&E representatives told San Bruno planning officials that "the older portions" of the pipeline "will be replaced by the year 2000."

They did not define "older," but at the time, the doomed section of the San Bruno pipeline had been in the ground for almost four decades.

Chronicle staff writer Jaxon Van Derbeken contributed to this report.

This article appeared on page A-1 of the San Francisco Chronicle