Response to flawed pipe is criticized
By R.A. Dyer, Star-Telegram Staff WriterMar. 31, 2004
AUSTIN - The Texas Railroad Commission is drawing fire from public watchdog groups amid revelations that it waited 17 years before ordering the removal of faulty natural-gas pipe in Metroplex neighborhoods.
The regulatory agency did not assess fines for accidents linked to the pipe, known as Poly 1, which is prone to cracking. All told, the accidents killed five people and injured at least that many.
Documents gathered under the Texas Open Records Act also show that the commission didn't fine any companies for pipeline accidents until 1998 despite receiving the authority to do so in 1983.
"The public would be better served if the railroad commission were a tougher watchdog," said Janee Briesemeister, senior policy analyst for the Austin office of Consumers Union.
Sydna Gordon, whose parents were killed in a Poly 1 pipe explosion in 2000 in Garland, said the agency remains too close to the industry it regulates. She said commission officials knew of problems with Poly 1 years before the explosion killed her parents but did not order its removal until afterward.
"The railroad commission does not seem to be minding the store with regards to the safety of the people," Gordon said.
But Commissioner Michael Williams characterized pipeline safety as a top priority for the railroad commission. Since he took office in 1999, the agency has established tough safety rules related to Poly 1, Williams said.
"We have made tremendous strides in advancing the cause of pipeline safety," he said.
The Texas Railroad Commission primarily regulates the oil and gas industry, gas utilities, pipelines, railroads, the liquefied petroleum gas industry and mining.
Much of the current controversy revolves around Poly 1 pipe, which was laid beneath Metroplex neighborhoods by Lone Star Gas, the predecessor to TXU Gas.
Newly released company documents show that officials knew the pipe was prone to cracking almost as soon as it was installed in 1970 and 1971.
The company stopped using the pipe almost immediately and by 1977 began efforts to remove it, according to company correspondence. Mary McDaniel, the railroad commission's chief safety officer, said the agency did not become aware of problems until a fatal explosion in Terrell six years later.
As a result of that accident, the commission secured an agreement from Lone Star to shore up Poly 1 with protective clamps. After an explosion and fire in 1996 destroyed a Grand Prairie house, the commission obtained an agreement from the utility to remove the pipe altogether.
But not until 2000, 17 years after the agency reportedly learned of problems with the pipe, did commissioners order its removal.
The commission's order was prompted by the worst accident to date -- the Garland explosion that killed three people, including Gordon's parents.
Before that, the utility "didn't want to spend the money to find out where the pipe was, and the railroad commission wouldn't make them do it," Gordon said.
But Williams said the commission has acted aggressively since he assumed office in 1999. Besides ordering the pipe's removal, the commission created a program to inventory the faulty pipe and fined TXU Gas $250,000 for missing deadlines for its removal.
Melissa Columbus, a spokeswoman for Charles Matthews, who was first elected to the commission in 1994, said the commissioner proposed an even greater fine.
She also said that the three-member elected panel adopted new pipeline enforcement rules during Matthews' tenure as chairman in 1997.
"His record will show how he has consistently voted for pipeline-safety measures," Columbus said. Citing an ongoing regulatory proceeding related to Poly 1, Matthews declined to comment.
For its part, TXU Gas says Poly 1 was state-of-the-art when it was created in 1970. The company also says that all state and federal guidelines were met with regard to the pipe and that the company worked voluntarily to remove and monitor it even before the Garland explosion.
The agency never fined the company for the Garland explosion or any other accident related to the pipe. Neither did the agency levy fines in any other pipeline accident until Dec. 15, 1998, when it assessed a $7,500 penalty against Entex, according to commission records.
The agency receives reports of 40 to 80 pipeline incidents each year, spokesman Lance Lunsford said.
The commission has had some oversight of pipeline safety since 1972, according to McDaniel, the agency's chief safety regulator. In 1983, the Legislature granted the agency authority to assess fines for safety violations, according to commission staff.
But it did not use that authority for a pipeline accident until after 1997, when the commission adopted new enforcement guidelines.
"As part of that, there were criteria for administering administrative penalties, and one of the criteria was for a violation that contributed to an accident," McDaniel said.
Of the 17 fines assessed for pipeline accidents, none exceeded $225,000, according to agency records. By contrast, the Texas Public Utility Commission has fined companies as much as $750,000 in cases where the public was never in harm's way.
"To put it in perspective, the PUC imposes stiffer penalties for companies that slam long-distance service than the railroad commission has against companies involved in accidents that result in deaths," said Briesemeister, of Consumers Union.
Andrew Wheat, an analyst with Texans for Public Justice who monitors the effect of money on politics, said business interests typically provide most of the contributions to railroad commissioners.
Wheat said that Commissioner Williams raised about $1.2 million during the 2002 election cycle and that three-fourths of the money came from contributors with ties to industry. He said an analysis by his group found that 41 percent of Williams' contributions came from the energy sector.
"The Texas Railroad Commission is a textbook case of a captured regulatory agency," Wheat said. "Commissioners who owe their office to hundreds of thousands of dollars from the energy industry attempt to balance the public interest against that of their benefactors. In this balancing act, consumer interests such as public safety repeatedly get shortchanged."
Nonsense, says Williams. He said his top contributions have come from conservative activists like San Antonio doctor Jim Leininger, not from energy interests.
"And I'm a resident of the state of Texas, so I'd like to make sure the pipe is safe as well," Williams said. "The fines that we imposed are greater than the fines we've imposed in the past. All these are aggressive moves made by the commission in the last five years."
Commission Chairman Victor Carrillo, who was appointed to the office by Gov. Rick Perry in 2003, could not be reached for comment.
