Independent panel criticizes PG&E for lapses that led to San Bruno pipeline blast

Reporting from San Francisco -- Nine months after a pipeline explosion flattened parts of a San Bruno neighborhood and killed eight people, an independent panel sharply criticized Pacific Gas & Electric Co. and state regulators for safety and management lapses that led to the disaster.

“The explosion of the pipeline at San Bruno was a consequence of multiple weaknesses in PG&E’s management and oversight of the safety of its gas transmission system,” the panel wrote in a withering 204-page report released Thursday.

The panel of experts, which was created by the California Public Utilities Commission shortly after the explosion and fire, also found that regulators “did not have the resources to monitor PG&E’s performance” in managing the safety and strength of its natural gas pipeline system.

The report, which included a series of recommendations for improving pipeline safety, was unveiled at the utilities commission meeting in San Francisco. Utilities commission President Michael Peevey called it “damning of PG&E almost across the board.”

“We seem to have drifted — ourselves, this commission and those we regulate — to a culture of complacency,” an emotional Peevey said during the somber meeting. “Just about everything you recommend for this commission, we will do our damndest to implement as soon as we can.”

In addition to discussing the report, the commission ordered all natural gas pipeline operators in California to test or replace pipeline segments that have not been pressure-tested or whose performance has not been sufficiently documented.

The action, whose cost is unknown but expected to be substantial, was in response to the San Bruno explosion. It affects PG&E, San Diego Gas & Electric and Southern California Gas Co.

Although the National Transportation Safety Board continues to investigate the Sept. 9 explosion, the PUC panel also weighed in on the root of the San Bruno disaster, which destroyed 38 homes, damaged 70 others and raised fears nationwide about the safety of gas lines that snake under neighborhoods and thoroughfares.

The NTSB has reported that the metal and welds that made up the ruptured pipeline were substandard, but the agency has not decided what triggered the explosion.

However, the panel report said that an “external force” caused the pipe to fail by increasing stress on its seam. That force “most likely” came from “a 2008 sewer replacement project undertaken by the city of San Bruno that utilized pipe-bursting technology.” The technique generally uses a hydraulic bursting head to break up and push aside an old pipe as a new one is being inserted. The San Bruno work involved replacing 1,600 feet of sewer that ran near the gas pipeline.

In a written statement, PG&E officials said that they “welcome today’s thoughtful report” and promised to review the findings and “take further action to improve the safety, quality and performance of our gas system.”

“It’s clear,” the statement said, “as we’ve openly acknowledged, that we need to make major improvements in our operations and culture in order to deliver the performance our customers rightly expect — and that we expect from ourselves.”

The panel criticized both the utility and its regulator for institutional cultures that place Californians at risk.

PG&E, the panel report asserted, over-emphasizes financial performance to the detriment of safety and has an “insular mind-set” that could breed a “corporate myopia” and keep the company from accurately assessing its strengths and weaknesses.

In addition, the report said, “the question surfaced of whether the CPUC was ‘tough’ enough or inquisitive enough to provide vibrant oversight.... The Panel believes both of these institutions must confront and change elements of their respective cultures to assure the citizens of California that public safety is the foremost priority.”

PG&E was also slammed for “inchoate” data management, which resulted in the utility’s providing “erroneous data” about the ruptured line in the early days of the investigation, and for slipshod identification of threats along its pipeline system.

In addition, the panel said, PG&E has no strategy to improve how it assesses the strength and safety of its pipeline system.

San Bruno Mayor Jim Ruane said he was waiting for the NTSB’s report on the cause of the explosion, whose effects are still felt in his Bay Area suburb. Residents who lost their homes are finally beginning to rebuild; the first new foundations were poured this week.

“People have asked me during this whole process, ‘Are you angry?’ There’s no room for anger,” he said. “My main concern is the residents, putting it all back together. [Pipeline safety] should be a topic of discussion for every community in this country. Hopefully, out of this a lot of communities will feel a lot safer.”

Rep. Jackie Speier (D-Hillsborough) was far less circumspect. “If this is somehow possible,” she said in a written statement, “PG&E is more at fault today than it was yesterday based on the findings of this panel of experts.”

The utility, she said, failed to have a supervisor on site during the sewer project near the segment of pipe that ultimately ruptured. The company also did not conduct construction inspections of a segment of pipeline that was uncovered during the sewer work.

“If PG&E had done its job,” she said, “the assumption is that it would have witnessed the patchwork construction on its pipeline and that, in turn, would have triggered an immediate inspection, if not repair. Instead, eight people died.”

maria.laganga@latimes.com

marc.lifsher@latimes.com