New York Legislation Proposing Pipeline Construction Subsidy

The Post Star, April 4, 2000, Glens Falls, New York:   A New York State Assemblywoman has introduced legislation that would provide state funding to county industrial development agencies to construct and own natural gas pipelines in remote areas. The so-called "Natural Gas Infrastructure Act" would fund up to 50 percent of the cost of constructing natural gas pipelines.

The article identifies potential beneficiaries as International Paper Company's Ticonderoga mill, employers in Cambridge, Salem, Granville and Whitehall, and mentions possible pipeline routes such as "a soon-to-be developed New York State Electric & Gas pipeline intended to run from the Canadian border to Port Douglas in Chesterfield to an undetermined point in northern Warren County; and the same route south to Whitehall in Washington County with a Vermont termination point."

VCE questions whether the gas industry is an industry that needs to be subsidized. In 1998, natural gas pipelines averaged net earnings, after taxes, of 22 percent of revenues. To compare, the median annual return on sales by Fortune 500 corporations in 1998 was 4.2 percent. The "economic development" being proposed in New York is for taxpayers to subsidize NYSEG, Iroquois, and the gas supply of Transcanada Pipelines and increase the possibility of siting polluting natural gas power plants in rural communities. There is no evidence that natural gas pipelines or power plants guarantee economic development, but there is no question that hosting hazardous high pressure pipelines and polluting power plants increases risks to public health and safety.

New Pipeline Routes

On April 6, VCE issued a press release announcing a new pipeline route from Canada south through Whitehall to Saratoga and Glenville/Scotia, site of the power plant proposed by Glenville Energy Park, a holding of Vermont Energy Park Holdings [VEPH]. The Rutland Herald followed this up with an investigatory article.

Committee to Study NOx Waiver

On April 7, Vermont's Senate Committee on Natural Resources and Energy, chaired by Senator Elizabeth Ready, heard testimony on whether or not to withdraw the state's request for a waiver of NOx offset requirements of the Clean Air Act, or to agree to continue to place the waiver "on hold". Secretary of Agency of Natural Resources [ANR] John Kassel agreed to find out what "on hold" means and what is required to remove the waiver from the "on hold" status. He further agreed to find out what the Environmental Protection Agency [EPA] would require to begin the waiver request from scratch if it were withdrawn, and also what it would cost to start over.

The committee agreed to establish a Committee, by Executive Order or through Legislation, to study how the NOx waiver could be used to encourage industry to reduce emissions and make Vermont's air cleaner. An Executive Order is being drafted. The committee would be co-chaired by Secretary Kassel and Department of Public Service Commissioner Richard Sedano. The Governor will appoint the rest of the committee, which will be comprised of legislators, environmental organizations, citizens groups, industry representatives, planning commissioners, and others.

National Pipeline Safety Reform Conference

On April 9 and 10, VCE's Executive Director Annette Smith attended the first National Pipeline Safety Reform Conference in Washington D.C.

Participants included mayors, fire marshal, attorneys, industry lobbyists, statisticians, environmental organizations, citizens groups, pipeline accident investigators, doctors, politicians, parents of children killed by pipeline explosions, landowners, representatives of state, city, and federal governments, and news media. More than 30 presentations detailed experiences with the pipeline industry. Natural gas, oil, propane, and gasoline pipelines were included in the discussion. The Cable News Network [CNN] is planning to follow up with extensive coverage of pipeline safety in the United States.

People from Alaska, Washington, California, Texas, Minnesota, Illinois, Ohio, Pennsylvania, New Jersey, New York, Georgia, Florida, Washington State and the District of Columbia converged on Washington to share their experiences. In most cases, local communities led by courageous citizens and their government officials demonstrated how they have been dealing with concerns about new siting, construction, maintenance, operation, safety inspections, aging pipelines, and a lack of coordination and cooperation between the pipeline industry and the communities in which they operate.

The impetus for the conference was what happened in Bellingham, Washington on June 10, 1999, when a pipeline exploded. Three children were killed. But the reason for national action on pipeline safety is what has happened in the 10 months since that tragedy. A doctor from the community of 65,000 talked about how the people are continuing to suffer. Firefighters, police officers, and paramedics are traumatized. The parents of the children who were killed described seeing their children burned over 90% of their bodies, orange in color, walking out of the burned-out park in which they had been playing, still able to talk. Fourteen hours later they were dead. They still don't know why this tragedy occurred.

The State of Washington, which has more than 30,000 miles of pipelines, has taken the lead in finding out what happened and making sure it never happens again, anywhere. What they have learned about the pipeline industry and the federal government's failure to regulate it to ensure public safety has outraged them.

The pipeline industry falls under the jurisdiction of the federal government. For siting issues, the regulatory agency is the Federal Energy Regulatory Commission [FERC]. Safety issues fall under the Office of Pipeline Safety [OPS]. Accidents are investigated by the National Transportation Safety Board [NTSB]. States have limited powers to regulate pipelines within their borders. Safety and inspection of intrastate pipelines is subsidized by state taxpayers who pay 50 percent of the cost. OPS recently announced that it intends to phase out state's rights to regulate pipelines over the next 3 years.

OPS has a staff of 105 people, with about 45 field inspectors to police 1.7 million miles of oil and natural gas pipelines nationwide. OPS has repeatedly failed to act on Congressional mandates and NTSB recommendations, failed to fund inspection technology research adequately, maintained erroneous and inadequate accident data, and failed to train its field inspectors or establish certification requirements for pipeline operators.

Massive leaks and tragic explosions are far more common that the industry wants the public to know. The pipeline industry has faced no meaningful reform for decades -- in fact regulations have been relaxed in recent years. Currently there is no requirement for old pipelines to be replaced, ever. There are no requirements for regular testing of pipelines with "smart pigs", a device that identifies anomalies when it runs through a pipeline. If a pipeline company does a test and finds an anomaly, there is no requirement to share that information with the community in which it is located or to dig it up. If they do dig it up, there is no requirement that they replace sections that show anomalies. In fact, there are no maps of pipelines, and many communities have no idea what kinds of pipelines they have running through their towns and cities or where they are located. There is no national policy to repair or rebuild an aging system that transports more than a million miles of hazardous fuels throughout our country.

We learned beyond a shadow of a doubt that the pipeline industry is not regulated, and has fought regulation with the immense power of its money. It is urgently in need of reform. Bob Rackleff, President of the National Pipeline Reform Coalition, said in his Keynote Address "it makes little sense to let an industry expand when it has shown itself unfit to operate safely what it already has."

• The National League of Cities adopted a resolution calling for pipeline safety improvements at its meeting December 4, 1999.
• The National Governors Association passed a resolution calling for reform of the Office of Pipeline Safety at their Winter, 2000, meeting.
• Two bills, H.3558 and S.2004, have recently been introduced in Congress calling for pipeline safety reforms.
• On April 11, Vice President Al Gore proposed comprehensive new legislation to reform the pipeline industry.

Frank King is the father of one of the children who died. He speaks with passion, focus, and outrage while his wife sobs quietly by his side. Wade was the light of his life, and Frank describes seeing his son walking out of the park with melted skin dripping off his fingertips. Instead of cooperating with federal officials, the operators of the pipeline have taken the Fifth Amendment. The pipeline company is still operating. On Friday, April 7, the pipeline company sued the city of Bellingham, claiming the city was responsible for the explosion. Mr. King asked the representative of the Office of Pipeline Safety who was present at the conference to hold accountable the pipeline company that is responsible for the death of his son. He wants them shut down until OPS and NTSB can tell him why his son died and assure him that it won't happen again. The OPS representative was without answers, except to tell him that the pipeline company will continue to operate. Mr. King does not want his son to have died in vain. And he does not want anyone else to go through what he and his community are going through.

Of the pipeline industry, Frank King says "they lie, they are arrogant, they are outrageous."

The outrage of the people of the State of Washington is tangible; their sorrow is deep. They will not rest until they see meaningful change in an industry that is out of control.

Vermont is fortunate that we have so few pipelines within our state. But continuing efforts by industry to get into and through Vermont with their high-pressure, hazardous natural gas pipelines represent a true and real threat to our safety if they succeed. The citizens of Southwestern Vermont have experienced some of the tactics of a pipeline company. They came into our communities and told us that if the pipeline crosses our land, we can get gas for $5,000; they told us that they will put gas service in a little town with 10 houses, but it will be expensive, it will cost them $70,000. We now know that these statements are false. The interaction at the Washington Conference has made it clear to VCE that this is how this industry operates.

If this pipeline company will lie to us about who will get the gas and how much it will cost, how can we trust them when they tell us that they construct the best pipelines in the industry and operate them in the safest manner. Why should we believe? Why should we trust them with our children? The best thing that Vermont could do for its citizens is to have a committee formed by the governor and address these issues before they occur, not after.