TPT May 2011

G lobal M arketplace

more frequent inspections; pipe-burrowing cameras and automatic or remote-controlled gas shut-off valves; as well as specialised firefighter training and public awareness campaigns. Despite PG&E’s claims that automated shut-off valves offer marginal benefits, their installation was mandated after the San Bruno event. PG&E estimates that it would cost $225 million to replace the 300 manual valves throughout its gas distribution system in Northern California. At the Washington hearings, the utility agreed to promptly replace 12 of them. (“PG&E Faces High Costs on Pipelines,” 3 March) In addition, under measures already enacted as a result of the explosion in San Bruno, the company that provides natural gas and electricity to some two-thirds of the state of California has pledged to spend up to $300 million this year to inspect aging pipes for weaknesses and to update pipeline paperwork. › Bay Citizen’s Mr Upton noted that, under the rules governing California’s utilities, customers pay for safety improvements, a tab that includes an 8.79% profit margin for PG&E. The safety measures already identified by the company could cost customers nearly $100 apiece in rate increases, which if approved by the California Public Utilities Commission would show up in bills over several years. With the extent of the requirements to be imposed on PG&E as yet unclear, Mr Upton observed that final costs to customers could be much higher. Utility Reform Network, a consumer advocacy group, said it welcomed the prospect of improved safeguards but called on state legislators to force PG&E’s shareholders to help pay the bill. “Every dime PG&E has originates with ratepayers,” a spokeswoman for the reformers told the news organisation. “PG&E should be forced to shift money from profits to safety.” Not an open and shut case “Pacific Gas and Electric decided in June 2006 not to equip its gas pipelines in many locations with valves that the federal government said could limit the damage from pipeline failures, a top company official testified on 1 March.” Writing from Washington in the New York Times , Matthew L Wald went straight to a central feature of National Transportation Safety Board hearings on the San Bruno pipeline rupture: an inquiry into the relative importance of valves. Pipeline workers reached the scene quickly, but – not qualified to operate the line’s valves – required 90 minutes to shut off the flow of gas. Testimony was taken that the more advanced valves decided against by PG&E in 2006 could have closed automatically, or been closed by remote control. But Chih-Hung Lee Sr, a senior consulting gas engineer in the risk management area of PG&E, testified on a memo of his from 2006, to the effect that automatic shutoff valves, known as ASVs, are of limited efficacy. “They will not provide additional safety to people or prevent property damage,” he wrote then. “The damage will happen before [the ASV] can have any effect” on the ruptured pipeline. (“Valves Are Focus in Hearing on San Bruno Pipeline Explosion,” 1 March) Another PG&E official told the hearing that, even if automatic shutoff valves had been in place, they may not have helped in the San Bruno rupture. Edward Salas, the senior vice president for engineering and

operations, said, “I don’t think we have the analysis yet to quantify what that impact might have been.” The US Department of Transportation had registered a contrary view in 1999, asserting that at many locations “there is significant risk as long as gas is being supplied to a rupture site, and operators lack the ability to quickly close existing manual valves.” Stating the obvious, the agency added that any fire “would be of greater intensity and would have greater potential for damaging surrounding infrastructure if it is constantly replenished with gas.” › Automatic shutoff valves are expensive. (Mr Lee of PG&E estimated their cost at about 20 times the value of the gas saved if a ruptured pipeline were to be sealed faster.) But, given the magnitude of the San Bruno disaster – eight deaths, 38 houses destroyed, many more injuries sustained and structures damaged – it seems likely that the relative value of ASV’s is a topic that will be revisited often. For its part, Pacific Gas and Electricity has been reconsidering its position on the devices since the September accident. “Clearly, something went wrong,” Mr Salas told the hearing. “So we’re re- evaluating our program, re-evaluating the notion of threats and where they come from.” On 3 March, at the conclusion of the hearings in Washington, PG&E issued a statement that read, in part: “Today’s panel of experts underscored the need for pipeline operators to have multiple inspection tools available so the method best suited to each pipeline can be applied. The discussions also reinforced the importance of developing new and better technologies to enhance safety.” Metals In the larger picture of a devastated Japan, five crippled steel mills While nuclear facilities received the emphasis in the immediate aftermath of the earthquake and tsunami that struck Japan on 11 March, the London-based price service Steel Index reported that at least five major Japanese steel mills halted production and could be out of action for as long as six months. The five mills are Nippon Steel Corp’s Muroran and Kimitsu works; JFE Holdings Inc’s Chiba

The earthquake in Japan had consequences for the steel industry in the country

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