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Sometimes, Shit Just Blows Up

March 2nd, 2015 No comments

Two Gas Explosions in a Week Raise Safety and Government Oversight Concerns 

Let me begin this post by stating very clearly that I know virtually nothing about the technical aspects of gas pipeline safety and that I have no intention of scaring anybody or opportunistically using disasters to advance an agenda (for context, see Point Pleasant explosion and Stafford explosion).

[Update below]

I post this information so that perhaps those that do have expertise or regulatory responsibility – or media – can investigate what, from a layman’s perspective, looks troubling. I really have no idea if this is a big deal or a trifle – or if the problem has been solved and risks are minimal.

I was recently given credible information about a gas safety issue - including a fire that caused major damage and a lawsuit – related to a defective gas valve that was installed in approximately 70,000 homes and business by the South Jersey Gas Co.

Based on my review of sworn testimony to BPU, is sure seems that neither BPU nor South Jersey Gas are in any hurry to properly diagnose the risks or replace the defective gas valves.

Testimony shows that the problem was discovered not by any SJG or BPU safety program, but by the random discovery of a gas leak that led to a fire with significant property damage.

After the problem was discovered, BPU dod not require SJG to conduct a rigorous safety analysis to determine the full extent and risks of the problem.

SJG initially did not fully investigate the problem and proposed and apparently received BPU approval to replace the defective values – which already have caused fires and explosions with extensive property damage – over an extended 15 year period!

I do not have final documents to be able to understand how this problem was resolved by the final BPU Order or what the current status is.

My source suggests that:

someone in the press should take on the info from Deptford and apply it to an overall analysis of what has happened since then, etc and whether any more valves have been more recently replaced, at what pace, bpu involvement, etc…

Here is what happened, per SJG testimony – I have fill document as a PDF and am unable to post a link but will provide upon request:

IX. Rockford Eclipse Valve Replacement Program 

It is necessary for South Jersey to remove and replace defectively designed riser valves that are installed at approximately 70,000 of the Company’s customers’ residences and businesses to ensure public safety and system reliability. The valves that need to be replaced were manufactured, distributed and sold to South Jersey and other utilities by a combination of the following companies: Rockford-Eclipse, Eclipse, Inc., Mueller Company, and Mueller Group Ltd. in the 1980s and early 1990s.

The valves were also installed at customer locations during that time frame. Based upon several failures associated with these valves, including one that led to significant property damage, and subsequent testing and analysis, South Jersey has determined that these riser valves (“Rockford Eclipse valves”) were defectively designed. To ensure public safety these Rockford Eclipse valves must be replaced.

At the time of this filing, South Jersey has experienced three failures of Rockford Eclipse valves at residential locations and without the proactive measures the Company took when the design defect was discovered, it is possible that more failures could have occurred. The first incident occurred in February 2005 when a Company employee responded to a leak call at a residence in Voorhees, NJ. In response to the leak, the employee attempted to shut off the flow  of gas to the residence by operating the Rockford Eclipse valve. In doing so, the Rockford Eclipse valve’s stem blew out causing a release of gas and subsequent fire. This caused extensive damage at the property. While this failure was the first time South Jersey experienced a problem with the Rockford Eclipse valve, two subsequent failures, testing on the valves and opinions contained in expert reports produced in litigation led South Jersey to conclude that these  valves must be identified and replaced so that this type of incident would not be repeated.

The second known failure occurred in July 2005 when a homeowner operated a Rockford Eclipse valve to perform maintenance inside his Deptford, NJ home. Similar to the first failure, when the Rockford Eclipse valve was operated, the stem blew out of the valve. Fortunately though, this failure did not lead to any personal injury or damage to the homeowner’s property. In response to the failure, South Jersey shut off gas service to the home and replaced the valve.

 In March 2008, a contractor at a third residence in Berlin, NJ operated a Rockford Eclipse valve, again causing the valve stem to blow out of the valve. South Jersey responded, shut off gas service to the home and replaced the valve. Again, fortunately, there was no property damage or personal injury related to this valve failure. At this point, South Jersey still  had approximately 70,000 Rockford Eclipse valves installed in its service territory.

These three failures represented the only known problems that the Company experienced with the Rockford Eclipse valves.

As a result of the extensive damage purportedly caused by the first failure of the Rockford Eclipse valve, litigation was commenced by the property owner and others against  South Jersey and the manufacturers of the Rockford Eclipse valve in Superior Court of New Jersey – Law Division, Camden County. This matter was captioned McKee Duncan, et als. v. South Jersey Gas Company, et als. and docketed as CAM-L-686-07 (“Duncan litigation”). During the course of the Duncan litigation, specifically in 2008, South Jersey learned for the first time that the failure of the Rockford Eclipse valve was caused by a flaw in the design of the valve. To our knowledge, the valves had caused no problems during the first twenty years or so of their lives following installation. This design defect was revealed in expert reports submit in the Duncan litigation. This design defect caused the Rockford Eclipse valve to corrode internally and seize up, which prevented proper operation. In addition to the internal corrosion problem, the Rockford Eclipse valve does not have a nut opposite the valve plug which would allow a service technician to loosen the valve if it seizes.

Although the valves present no safety hazard in their current (dormant) state, they become problematic when used for their intended purpose, which is to stop the flow of gas.

Precautionary actions have been and continue to be taken by South Jersey to mitigate future damage from valves malfunctioning. We believe the problem is limited to Rockford Eclipse  valves and does not extend to valves manufactured by companies other than Rockford-Eclipse, Eclipse, Inc. Mueller Group, Ltd. and Mueller Company.

In response to this situation, South Jersey has conducted a survey to identify the location of Rockford Eclipse valves throughout its service territory. This survey identified 69,167  locations as having a Rockford Eclipse valve on the service riser. Yellow plastic safety/warning  caps stating “Warning – Tampering subject to prosecution” were then purchased and installed on each identified Rockford Eclipse valve to deter unauthorized personnel from operating the  Rockford Eclipse valve.

Once tagged, South Jersey commenced its plan to replace all of the defective valves.

Pursuant to this plan, each Rockford Eclipse valve in the South Jersey distribution system will be inspected by no later than April 30, 2011 to determine evidence of atmospheric corrosion. Valves which are graded as poor in this survey will receive the highest priority in the replacement plan. Following completion of the survey, a plan for prioritizing and replacing all Rockford Eclipse valves will be developed and provided to the Board by no later than July 31, 2011.

Here are excerpts of the sworn BPU testimony to get the ball rolling –  very troubling flaws revealed (link)

Q: Does McFadden Consulting have any comments or recommendations concerning the Company’s Rockford Eclipse Valve Replacement Program?

In response to data requests requesting all information related to the RE valve situation, SJG did not provide any documentation indicating that it conducted a formal analysis to determine if its proposed program was a prudent course of action. For example, apparently no analysis was performed to determine:

  • The probability of future incidents verses the expenditure involved in making a wholesale replacement of the valves
  • The proper timeframe (i.e.the proposed program’s 15 years to complete) for any such replacement program

Because the Company did not conduct any such analyses, McFadden Consulting is not able to determine if the proposed program is reasonable or prudent. In other words, McFadden Consulting is unable to either take issue with the Company’s proposed Rockford Eclipse gas service riser valve replacement program or to endorse the program as being adequate.

SJG has indicated that it will formalize its plan for prioritizing and replacing all RE valves and provide such plan to the Board of Public Utilities no later than July 31, 2011.42 McFadden Consulting recommends the Board require the Company to prepare a formal analysis as described above as a part of any such plan submission

[Update:  Here is the most recent BPU document I was just provided, after this post was written. I am reading it now. ** The testimony seems to focus exclusively on costs not safety, but I found this interesting – safety plan is secret:

Q - How was the 15-year time frame chosen?

A – The 15-year time frame is in conjunction with the Plan submitted by South   Jersey to the BPU Bureau of Pipeline Safety, entitled “Summary of Actions to Date and Path Forward”, dated May 20, 2009. It was submitted on a confidential basis and will be provided to the parties to this proceeding when appropriate safeguards are in place. ~~~ end update ]

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Missing The Key Point on Christie DEP Deal With Exxon Mobil for Bayway Refinery

March 2nd, 2015 No comments

DEP Lacks Regulations To Quantify Natural Resource Damages (NRD)

Lack of NRD Regulations Opens The Door To Abuse

Open Space Advocates OPPOSED Constitutionally Dedicating NRD Funds

There’s been quite a lot of press coverage and expressions of outrage over the Christie DEP’s sweetheart deal with Exxon Mobil regarding decades of pollution from the Bayway refinery that caused  ”Natural Resource Damages” (NRD).

The settlement was apparently leaked to the NY Times, who ran a huge story on Friday. I assume it was leaked by some one from DEP or the AG’s Office who was outraged by the sellout.

The media coverage correctly has stressed major abuses – as I did in my initial post -  including:

  • the $250 million recovery is less that 3 cents on the dollar of an $8.9 billion claim
  • those funds are likely to be used to close budget deficit and pay for Christie’s corporate tax cuts
  • the sellout is linked to Gov. Christie’s political fundraising – implied corrupt quid pro quo

I expect the mainstream press to not understand complex issues of environmental law and to play up the politics. So I am not surprised that they missed key points.

But I expect more of the environmental community and of NJ Spotlight, who are not bound by the soundbite and 24 hour news cycle and instead are – or should be – focused on policy.

So, I was disappointed by today’s Spotlight story:

To claim that Superior Court Judge Hogan found Exxon liable for NRD and use that finding to imply that he would render an opinion that hit Exxon with almost $9 BILLLION in damages is absurd and misleading  (especially given Hogan’s prior role as chief counsel to the pro-business and anti-regulatory Whitman DEP Commissioner).

Worse, to claim that DEP has a “complex formula” for calculating Natural Resource Damages (NRD) is simply false and obscures the critical point.

Bureaucracies shield themselves from this kind of abuse of enforcement discretion via regulations – with numeric standards and methodologies.

If DEP had regulations and standards in place for quantifying NRD damages, the dirty Exxon deal could not have been done.

DEP does not have such NRD damage determination rules in place and we’ve criticized that fact for YEARS now. (DEP has methods for groundwater injury and ecological injury, but these are not enforceable regulations)

In a 2004 settlement agreement of the case New Jersey Society of Environmental & Economic Development v. Campbell (N.J. Super. Law Div., Mercer County), DEP legally committed to propose formal natural resource damage regulations.

For 10 years, DEP has failed to honor that settlement and has not adopted NRD regulations that provide standards and methods for calculating NRD damages.

NJ Courts have rejected DEP NRD claims based on DEP’s failure to promulgate regulations, see:

N.J. Dept. of Envtl. Prot. v. Exxon Mobil Corp., Docket No. MER-L-2933-02 (N.J. Super. Ct. Law Div. Aug. 24, 2007).

We discussed that case here:

Trenton — In a stunning legal setback, the State of New Jersey cannot recover damages from polluters in what may be thousands of contaminated groundwater cases, according to Public Employees for Environmental Responsibility (PEER). The problem stems from the state’s failure to adopt regulations governing how to calculate “natural resources damages” (NRD) for polluted drinking water. As a result, polluters can avoid compensating the public for treatment of tainted groundwater, replacement water supply lines, drilling new wells and associated damages — leaving taxpayers with uncalculated costs.

On August 24, 2007, a state Superior Court dismissed with prejudice an attempt by the New Jersey Department of Environmental Protection (DEP) to recover a natural resource damage claim involving benzene and toluene contamination of private wells in the Hillwood Lakes area of Ewing Township. (N.J. Dept. of Envtl. Prot. v. Exxon Mobil Corp., Docket No. MER-L-2933-02 (N.J. Super. Ct. Law Div. Aug. 24, 2007)). The Court found that DEP did not follow the rule making process to establish, by regulation, a reliable formula for calculating natural resources damages. In the absence of regulations, the Court also found DEP lacked adequate scientific support to proceed on a case-by-case basis.

More recently, after the Appellate Division struck down a DEP NRD claim, we petitioned the NJ Comptroller to intervene and require that DEP adopt regulations EXACTLY to AVOID this kind of political abuse, see:

Trenton — The State of New Jersey is forfeiting hundreds of millions of dollars in damages from polluters in contaminated groundwater cases, according to Public Employees for Environmental Responsibility (PEER), which has asked for a review of the program by the state Comptroller.   The state’s failure to adopt regulations governing how to calculate “natural resources damages” (NRD) for polluted drinking water has contributed to its inability sustain assessments against polluters. [...]

“This mess was wholly preventable but even now the state is not taking the measures everyone agrees are needed,” Wolfe added. “It appears that we have utterly lost the capacity for enlightened environmental leadership in New Jersey.”

PEER is asking the Comptroller to review the performance of the NRD, determine the extent to which taxpayers are not attaining full NRD recoveries and make recommendations for putting the program back on track in a more transparent and accountable fashion.

The Corzine DEP under Lisa Jackson failed to adopt regulations, as did the anti-regulatory Christie administration.

Those failure to adopt rules are what allowed this most recent abuse to occur – a predictable and predicted abuse.

Finally, to whine that the revenue from the settlement will go to the State budget and not natural resource restoration and public compensation for lost use of natural resources is disgraceful.

As I’ve written, the introduced version of the Open Space Resolution SCR84  (see lines 31 – 33 on page 3) would have Constitutionally dedicated NRD settlement funds to the Open Space fund, but environmentalists OPPOSED Constitutionally dedicating this funds.

I repeat: that is one of the biggest blunders of all time, as both eh Passaic and now the Exxon settlement proves.

Environmentalists need to spend more time working on what DEP actually does that in the media.

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Pipe Dreams – The False Promise of Local Pipeline Jobs

March 1st, 2015 No comments

NJ Falling Further Behind on the Jobs Front –

Missing Strategic Manufacturing Opportunities 

No Vision, No Leadership On Energy & Economic Development

US Pipe plant, closed (

US Pipe plant, closed (Burlington, NJ)

Like almost everything else in the US and world economy, NJ was once a pioneer in pipe manufacturing.

Not any more.

Like so many industries NJ pioneered, shortsighted corporate profit driven decisions and failure to innovate and invest led to decline and obsolescence (and export of US jobs to third world countries where corporations could exploit labor and the environment with impunity, a well documented process that began over 40 years ago, known as “deindustrialization“, which would later become known as “global trade” and “financialization”.

That process has created what Chris Hedges calls “sacrifice zones”. Neoclassical economists, in contrast, call this the “creative destruction” of capitalism. Marxists economists describe the process as revealing the contradictions of capitalism. Economic historian Karl Polanyi lays out the dynamic and framework in his classic 1944 book as The Great Transformation).

A symbol of this failure, the closed US Pipe plant on the Delaware dates to 1866 –  those mothballed industrial sites are now producing more tourism revenue than manufacturing revenue, see:

The decline is not limited to 19th century heavy industrial manufacturing technologies -

A recent NJ Department of Labor report titled:  New Jersey’s Advanced Manufacturing Cluster Winter 2014 – 2015  focuses on so called ”advanced manufacturing”. The report paints a shockingly dismal picture:

New Jersey’s manufacturing sector averaged marginal growth of 0.3 percent per year from 1997 through 2008, but tumbled to decline by an annual average of 5.1 percent from 2008 through 2013    

(Source:

(Source: NJ Dept. Of Labor)

Look at that chart – at that NJ jobs gray line dropping like a stone – it is astonishing!

Repeat: under Gov. Christie, NJ’s “advanced manufacturing” sector “tumbled to decline by an annual average of 5.1 percent from 2008 through 2013″. 

Last month, Senate President Sweeney seemed to show an inkling of strategic understanding of this set of challenges.

During a Senate Environment Committee hearing, Sweeney emphasized that he had done his homework and strongly supported off shore wind development based on the number of manufacturing jobs it could produce in NJ.

Sweeney began the discussion of a pro-wind bill, S-2711 after 4 years of inaction by the Christie Administration. Sweeney had some strong words (verbatim remarks by Sweeney):

In March 2011, BPU was supposed to publish the wind regulations. The  fact that the BPU has not published regulations is a clear statement from the Administration that they’re opposed to wind energy, at the cost of the economy of the state of NJ.

We would have captured 1,000 manufacturing jobs in this industry. We were so far ahead of other states, up and down the east coast.

Gov. Christie’s failure to follow through on off shore wind development cost NJ over 1,000 good manufacturing jobs.

The Gov.’s diversion of $1 billion of Clean Energy Funds has cost thousands more good paying contractor and trade union jobs.

So, given those failures in wind, clean energy, and advanced manufacturing, what is Sweeney focusing his political energies and investing his political capital on?

A handful of temporary construction jobs installing another natural gas pipeline, though the Pinelands, no less.

Senate President Sweeney recently defended his role – in what the Asbury Park Press editorial Board called ” a new low in sleaziness” – in support of the South Jersey Gas Co. pipeline through the Pinelands, see:

Sweeney defends role in Pinelands Commission flap

NEPTUNE – Senate President Stephen Sweeney and Gov. Chris Christie have had some famous disagreements, but not over Christie’s pick for a seat on the Pinelands Commission.

Sweeney, D-Gloucester, says he has no apologies for actions he took that led to the Senate Judiciary Committee approving Ocean City resident Robert Barr in an 8-4-1 vote Tuesday. [...]

“I am in favor of the pipeline, I absolutely am. I’m not backing away from that,’’ Sweeney said. “I’m not against the Pinelands. I want to save the jobs.’’ [...]

Sweeney said the Pinelands will be fine if developer South Jersey Gas wins final approval because the company’s application is laden with beefed-up environmental standards.

“I had South Jersey Gas jump through hurdles, and for one reason: They’re going to make a lot of money selling gas,’’ Sweeney said.

So, Senator Sweeney,  it’s jobs, eh?

Or is it the corporate profits?

Or is it really all about the “hurdles” SJG jumped through (a euphemisms for campaign contribution shakedowns? Kickbacks?)?

  • False Promise On Jobs

First, let’s take a look at the jobs claims.

A recent Report by the Chair of the Department of City and Regional Planning Department at Cornell (the program I attended) about the job creation associated with fracking is instructive for looking at the economic geography of the pipeline industry as well, see: The false promise of fracking and local jobs

But opening the door to fracking doesn’t lead to the across-the-board economic boon most people assume. We need to consider where oil and gas industry jobs are created and who benefits from the considerable investments that make shale development possible. A look at the job numbers gives us a much better idea of what kind of economic boost comes with fracking, how its economic benefits are distributed and why both can be easily misunderstood.

The Cornell Report concludes that: 1) far fewer jobs are created than claimed by industry and their paid cheerleaders; 2) there is little impact on the in-state unemployment rate; and 3) there are small in-state economic benefits.

Ironically, literally adding insult to injury, the Report concludes that the majority of the few good jobs that are created by fracking primarily benefit Texas not the Marcellus shale states where the drilling is occurring that suffer all the public health and environmental impacts and public health risks & harms:

This [data] tells us that the production sites aren’t necessarily the places that get the economic boost. The most skilled workers on drilling crews are from Texas and Oklahoma and they return home to spend their earnings. 

So, how many NJ based jobs would the SJG Pinelands pipeline create and how are this jobs and economic benefits distributed?

What jobs and economic benefits does NJ receive? Are they commensurate with the costs? Who wins, who loses?

Pipeline supporter Senator Van Drew (D-Cape May) estimates that the pipeline would create just 75 temporary construction jobs and retaining 60 jobs at BL England plant (Cape May Herald).

A recent Rutgers University econometric Report suggests somewhat larger job creation.

(And don’t think I didn’t notice how Rutgers is touting job creation associated with fossil infrastructure, while Cornell is critiquing and demolishing fossil energy industry jobs and economic claims – could that be related to energy industry contributions to Rutgers? – Good questions for another day!)

The pipeline would cost about $100 million and the BL England plant re-powering about $400 million. So this is a $500 million investment that would be paid for by NJ residents and businesses.

What benefits would NJ get for that significant investment?

No new manufacturing jobs would be created in this $500 million pipeline and power plant project.

That is virtually no return on a massive investment that NJ ratepayers will finance.

In terms of retaining existing jobs, that is an incredibly tiny jobs to investment ratio: a cost of some $8.3 million per job retained!

And just like fracking, the good manufacturing jobs are located in Texas and Louisiana -

According to US Economic Census data, Texas is #1 in pipe manufacturing jobs and Louisiana #2, with over 10,000 jobs. 

Meanwhile, NJ pipe manufacturing jobs are hardly visible – just 250 – 499 jobs at 18 NJ plants, with just 4 of this plants employing more than 20 workers.

According to the NY Times, the steel manufacturing jobs from all the fracking and pipeline expansions are  few, and they are located in Ohio steel mills. Few new additional jobs are projected due to heavy automation:

In Canton, Timken executives said they expected to complete the Faircrest mill’s additions by 2014, and production will increase to 925,000 tons annually from 750,000 tons this year. Mr. Miraglia said 425 people worked at the plant and that automation in the new buildings most likely meant that few if any jobs would be added.

So, what does all this tell us?

1) There is virtually no real strategic economic development or energy planning going on in NJ State Government.

Instead, there are Pipe Dreams and “new lows in sleaziness”.

2) What little economic development policy there is is reactionary and limited to costly and ineffective corporate subsidies that reflect no larger strategic vision.

Energy policy is driven by existing fossil fuel dominated producers and distributors and the narrow and blinkered policies of ratepayer concerns.

3) We are missing huge opportunities to develop good manufacturing and construction jobs in energy efficiency and renewable nervy industries.

4) In addition to fatal failure to focus on jobs and economic development using long standing traditional methodologies and policy tools, the climate change imperative and existing economic tools like the social costs of carbon are completely ignored.

5) Therefore, it seems apparent to me that the supporters of alternative energy also are missing opportunities to make effective economic development arguments and to critique the aforementioned flaws.

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Pines In Winter

February 28th, 2015 No comments

No words

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Mr. Barr, Please Withdraw Your Nomination to the Pinelands Commission

February 28th, 2015 No comments

An Open Letter to Bob Barr

Dear Mr. Barr:

Sometimes, a good man of conscience and integrity  - which I believe you are – needs to take a step back from the daily hubbub and reflect on the essence of things.

This is one of those moments.

As a good man of conscience and integrity, I now urge you to do so, and, upon reflection, withdraw your name from Senate consideration as a Pinelands Commissioner. Here’s why:

I’ve listened closely to your good friend Senator Van Drew’s praise of you as a man and a public servant. Indeed, you have struggled and overcome obstacles and achieved many good things, both for yourself and your community.

And that is precisely why I urge you to withdraw your name from consideration.

The context for your nomination by the Governor is deeply troubling.

You personally had nothing to do with creating this context, but you are immersed in its fabric and caught in the crossfire.

You now must make a choice. Your choice will have consequences. Listen to reason and follow your conscience in doing so.

Your confirmation by the Senate would do lasting damage to individuals and institutions, including yourself.

I am certain that you would never cause this kind of damage, but your decisions now may contribute to it.

First of all, the Pinelands Commissioner you would replace, Mr. Jackson, is a man of integrity. He has served the Commission well for a decade. He wants to continue that service.

Commissioners have routinely been reappointed when their terms expire. The Governor’s proposed replacement of Mr. Jackson’s is obviously in retaliation for his NO vote on the South Jersey Gas pipeline. Whetether you agree with this or not is irrelevant – it is widely perceived to be true.

Your appointment to the Commission under these circumstances would forever taint you personally – you could not serve effectively as a Commissioner when your fellow Commissioners and the public would never forget and blame you for the Gov.’s scheme.

Second, your confirmation by the Senate would undermine the independence of all members of State and regional boards and commissions by sending a message that if you defy the will of the Governor or powerful political interests, you will be replaced.

That is redolent of the old Stalinist Soviet Union.

Do you want your name associated with that?

Third, your confirmation by the Senate would taint the Senate itself, rendering its Constitutional advise and consent role subordinate to the power politics of the Governor.

The stench of these politics would stick to your skin forever.

Do you really want to go through public life under these conditions?

Is all this damage worth a handful of very temporary jobs?

Reflect on that, then take a drive through the Pinelands forests and do the right thing.

Please withdraw. Now.

Respectfully,

Bill Wolfe

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