A day after The Tyee first reported on the marred environmental record of Kinder Morgan, the company wanting to take over Terasen, the Texas based pipeline giant was hit with a corrective action order from the US Department of Transportation's Pipeline and Hazardous Materials Safety Administration.
According to PHMSA spokesperson Damon A. Hill, the August 24 order, addressed to co-founder Richard Kinder, tells Kinder Morgan to review their operating procedures.
"We issued this order to get this company to address the recent rash of incidents that they've had in the past couple of years," says Hill. "They've had a significant number of them."
Now, Hill says, the PHMSA wants Kinder Morgan to restructure their safety procedures in hopes of creating a sound network. "We did an analysis of what we thought could be going wrong with the company. We looked at their integrity management (and) the way they implement their integrity management," he says.
Hill adds although no clear cut violations were found, the PHMSA "did see weaknesses in use of their tools to interpret the data that they receive when they conduct integrity management inspections."
'A widespread failure'
The order points out "recent accidents indicate a widespread failure to adequately detect and address the effects of outside force damage and corrosion. This failure has systematically affected the integrity of the Pacific Operations Unit."
It focuses on eight more severe accidents out of the 44 Kinder Morgan has experienced over the last two years. Such as the Suisun Marsh diesel spill, which leaked 70,000 gallons of fuel into the Northern California marsh. According to the order, the cause of that spill was a 14-foot section of corroded pipe that was not identified as requiring repair.
Of the seven remaining incidents, five of them are listed to have been the result of an outside force, meaning third party involvement. One such case was an explosion that killed five people. Kinder Morgan was found to have not marked the pipeline properly and was cited $140,000 for their part in the accident.
The order goes on to point out three of the accidents were not addressed by Kinder Morgan in a timely manner, among them the Suisun Marsh spill.
'We fully intend to comply'
Hill says the company has a problem with organizing its own internal inspection reports with other information key to safely running pipelines.
According to the order, Kinder Morgan practices internal inspection relying on multiple departments, however those departments don't always have access to each other's information. And the order says the "internal inspection geometry tools employed by the respondent (Kinder Morgan) are generally insufficient."
Kinder Morgan spokesperson Rick Rainey says the company is taking the order seriously.
"Many of those steps we have already taken including a third party review of our operations and procedural practices as well as a restructuring of our internal inspection program," says Rainey. "We fully intend to comply with the order in that regard."
Kinder Morgan is appealing some elements of the order, but Rainey was unable to say which ones by press time.
Effect on sale not clear
The British Columbia Utilities Commission is currently reviewing the intended sale of Terasen gas when its owner, Terasen Inc, is taken over by Kinder Morgan.
BCUC spokesperson Bill Grant says the only way the corrective action order can have an effect on the sale of Terasen is if one of the sale's 15 registered interveners submits the order as part of their contention. Grant adds such a submission could be considered because part of the BCUC's responsibility is to ensure Terasen offers quality service to customers.
"If parties can demonstrate that (circumstances prompting the order) might have an impact on Terasen gas, then that would have an impact on the reliable service issue," says Grant. "I don't believe anybody's made a submission on that."
During the interview with The Tyee, Rainey repeatedly mentioned Terasen pipes would be maintained by the same people performing the task now. "One of the issues that's kind of gotten lost in this whole discussion is that following the completion of this sale, you're essentially going to have the same people that are in charge of pipeline integrity for those Canadian assets in place once the sale goes through," he says.
This is not the first time Kinder Morgan has been dealt with by the PHMSA. Their website has many instances where Kinder Morgan shows up on a list of compliance section orders served to numerous companies since the early 90s.
Jeremy J. Nuttall is a Penticton radio reporter and freelance writer. To read his previous report on Kinder Morgan's safety record, go here.
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