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State audit: Pipeline oversight too lax


The Constitution Pipeline, now under construction and pictured in January 2015, will bring natural gas from the fracked fields in Susquehanna County, Pennsylvania to eastern and southern parts of New York. The pipeline is awaiting approval from New York regulators. The state comptroller's office has criticized the state Public Service Commission for lax oversight of the existing pipeline network.

After finding operators of natural gas pipelines failed to report six incidences involving safety hazards last year, state Comptroller Thomas DiNapoli is advising regulators to improve their reporting process and upgrade their data management systems.

In an audit released Tuesday, DiNapoli also called for the Public Service Commission to improve risk assessment of the state’s 92,000 miles of pipeline, and to better verify the qualifications of the operators who run them.

Between 1995 and 2014, New York had 194 pipeline “incidents” resulting in 23 fatalities, 123 injuries and $77 million in property damage, according to the report.

But the audit focused on recent incidences of reporting and disclosure. It found commission staff does not verify information provided by pipeline operators during field audits, lacks a process to identify instances where operators don't provide required notifications, and fails to analyze all available data to identify potential high-risk areas.

During a review covering the first eight months of 2015, the comptroller’s office found six of 950 “gas-related instances” that pipeline operators did not notify to the commission, according to the audit. The incidents, reported in the media, involved evacuations, road closures, the closure of a business, and other situations that left businesses and residents without gas for several days.

The incidents were in Yorkville, Guilderland, Albany, Buffalo, Manhattan and Long Beach, according to a spreadsheet from the comptroller's office. Most of them were gas leaks and ruptures, though one involved an interruption in service to residents in Manhattan.

DiNapoli’s report — critical though not scathing — focused mostly on the need for improvements in documenting issues.

“When DPS (the Department of Public Service) is not notified of reportable incidents involving a gas pipeline, it cannot properly carry out its monitoring responsibilities,” the report stated. “DPS cannot ensure the operators performed all required actions to correct problems, nor can it respond to public inquiries of the incident adequately or in a timely manner.”

Though the audit raised no explicit issues with the way regulators carried out inspections or issued violations, it noted that the Public Service Commission “relies almost exclusively on the operators to report any accidents and incidents.”

New York State Comptroller Thomas DiNapoli’s office, criticized the Public Service Commission's oversight of natural gas pipelines. (Photo: AP)

Commission officials said problems have been or are being addressed. By the time the audit was released, the agency had documented and investigated two of the six unreported incidences noted by the audit, according to a written response to the audit from Public Service Commission Chairwoman Audrey Zibelman.

The agency also has subscribed to an electronic news feed “expected to provide staff with real-time information,” and revised a manual “to clarify that the annual audit letters sent to all operators should include all accidents that met reporting criteria, including any that were not reported by the operators as required.”

DiNapoli’s report comes as the state faces intense scrutiny on plans to expand pipelines to bring shale gas from Pennsylvania to markets in New York and New England.

Several projects awaiting state permits have become the focus of campaigns by regional activists opposed to shale gas development. These include the Constitution and the North East Energy Direct projects proposed from Susquehanna County, Pennsylvania to New York’s Capital District.

Other controversial projects include Dominion’s New Market Project from the Pennsylvania border southwest of Elmira to Schenectady, and a proposal by Crestwood Equity Partners, of Houston, to store liquid propane in abandoned salt mines on the southwest shore of Seneca Lake.

Walter Hang, an environmental database specialist and activist from Ithaca, said the audit validates arguments that pipeline opponents have been making to deny pending permits on the grounds of public safety and environmental protection.

“This carries tremendous weight, and the governor can’t ignore it,” Hang said.

Zibelman characterized the findings of the audit as minor.

The agency “is committed to ensuring all opportunities for improvement are thoroughly assessed and … enacting, where beneficial, appropriate changes to its operations.”