POWER April 2012 - 28

Suing for (Pipeline) Safety
A
s a Valentine's Day present to federal regulators, San
Francisco City Attorney Dennis Herrera took the unusual
step of suing the U.S. Pipeline and Hazardous Materials
Safety Administration (PHMSA). The complaint alleges
that the PHMSA has " abjectly failed to oversee the [California
Public Utilities Commission's (CPUC's)] pipeline safety program
or to ensure that federal pipeline safety standards are
enforced. " The complaint chastises the PHMSA for " shirking
that duty for over a decade, if not longer. "
The complaint links these failures by the PHMSA to the
natural gas pipeline disasters recently experienced in the Bay
Area. These incidents, most infamously, the horrible tragedy
in 2010 in San Bruno that killed eight people and injured
more than 50 others and destroyed or damaged more than
100 homes, involve pipelines owned and operated by Pacific
Gas and Electric Co. (PG&E). The complaint asserts a direct
causal nexus: " [b]y abdicating its duties as a regulator and
by improperly delegating those duties to gas pipeline operators
like PG&E, PHMSA has placed the lives and property of
millions of men, women and children-including hundreds of
thousands of men, women, and children in San Francisco-at
substantial and unnecessary risk. "
The complaint also criticizes what it asserts to be ineffectiveness
by the CPUC in regulating PG&E and other operators
of natural gas pipelines. Interestingly, it does not name the
CPUC as a defendant and actually compliments the CPUC's
" actions to restructure and increase its pipeline safety enforcement
resources " as " ostensibly designed to address the
concerns raised " by the City of San Francisco.
The complaint expresses the city attorney's hope that the
CPUC " will conduct a thorough and independent examination
of its own failures and adopt meaningful reforms to its own
practices, " but it also expresses the concern that the CPUC
" will revert to its past practice of failing to fulfill its duty to
enforce federal pipeline safety standards in compliance with
its certification [at the PHMSA]. " However, the complaint
contrasts the CPUC's limited actions thus far with what it
deems to be the total lack of any response by the PHMSA to
similarly correct any of its own failings.
The lawsuit seeks injunctive relief directing the PHMSA to
comply with its " duty to oversee certified state authorities and
to ensure that federal pipeline safety standards are enforced as
required by the [Pipeline Safety] Act. " It further requests that
the court enjoin the PHMSA " from improperly delegating their
authority to do so to gas pipeline operators like PG&E. " In other
words, the San Francisco city attorney is requesting that a federal
judge in San Francisco direct PHMSA to " do its job. "
Ensuring Pipeline Safety Is Complicated
To grant the relief the complaint demands, the court must
find that the PHMSA has failed to fully discharge its statutory
28
responsibilities. Any such determination is inextricably intertwined
with a policy debate encompassing the proper level of
safety oversight Congress intended the PHMSA to provide and
the appropriate safety standards the PHMSA should enforce to
fulfill its mandate to promote pipeline safety.
Resolving these issues is well beyond the proper ambit for
a judicial body. Society's desire for perfection with respect
to pipeline safety demands that robust debates assessing
such critical safety issues as hydrostatic testing, proper
pipe engineering and installation, and future infrastructure
investment should be conducted. However, allowing these
debates to be conducted by legal adversaries, decided by a
single judge, and based on legal precedents will not yield
optimal results. Rather, the debates should be conducted
by legislators and regulatory agencies that are sensitive to
the necessary tradeoffs between ensuring reliable natural
gas supply at the lowest possible cost while best ensuring
public safety.
Litigation Produces Illusory Benefi ts
We assume that the San Francisco city attorney sincerely believes
that prevailing in the litigation will increase pipeline
safety and thus directly benefit his constituents and at least
indirectly benefit the greater populace. However, the supposed
linkage between a judicial declaration directing the
PHMSA to act in accordance with its statutory responsibilities
and advancing the objective of increased safety is at best an
abstract theory predicated on the dubious assumptions that
perfection in promulgating and enforcing regulations can be
achieved and that achieving such perfection will guarantee
absolute safety.
In any event, while the possible benefits of prevailing in the
litigation are amorphous at best, the costs are real and detrimental.
The PHMSA's defense of the City of San Francisco lawsuit
will require it to divert already constrained financial and human
resources from enforcing safety regulations to producing documents
and being deposed.
Instead, lobbying Congress to provide the PHMSA with sufficient
funding to accomplish its statutory responsibilities
would provide the City of San Francisco with a more positive
approach to reach the results that it seeks through this lawsuit.
After all, an agency can only take steps to ensure safety
if it is correspondingly provided a sufficient budget.
Just as the San Bruno tragedy served to jumpstart the national
debate on pipeline safety, the City of San Francisco's
lawsuit may at least serve to ensure that the focus of national
lawmakers is not diverted from this very important issue with
the passage of time. However, actual tangible benefits derived
directly from the lawsuit seem unlikely. ■
-Vidhya Prabhakaran (vidhyaprabhakaran@dwt.com) is an associate
in Davis Wright Tremaine's Energy Practice Group.
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POWER April 2012

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