SALT LAKE CITY — The Public Service Commission issued a $100,000 penalty and ordered the shutdown of a 21-mile natural gas pipeline near Moab after state regulators found several operational and emergency violations in an inspection two years ago that they say continue to persist.
The action against Pacific Energy & Mining taken Wednesday by the commission was requested by the Utah Division of Public Utilities after its pipeline safety team conducted a 2016 inspection and found numerous violations of state law.
By April 2018, the division filed the enforcement action against the pipeline operator and ultimately, it proved 11 ongoing state code violations.
The 16-inch steel pipeline runs from the company's processing plant near the intersection of Ruby Ranch Road and Power Line Road to the Williams’ pipeline tap near the Archview Resort northwest of Moab.
Although it is a lightly populated area, the division says the pipeline's safe operation is critical given its proximity to a regional airport, a public campground and outdoor recreation activities.
“Natural gas is part of Utah’s economic success and the Division of Public Utilities is committed to minimizing safety risks of natural gas facilities. (The company's) practices left us with no confidence in its pipeline’s integrity. Though we are aware of no immediate risk to the public, continued operation is a danger to the public until regulators can be assured of safe practices,” said Chris Parker, division director.
When the case was presented to the commission last year, company President Tarik Ahmad said the pipeline didn't fall under the division's regulatory authority.
"We are a small company that has run this for a long time and we were never regulated. It is a gathering system. It is not a transmission line," he said.
Parker had argued that when Pacific took ownership of the pipeline, operational changes put it within the state's jurisdiction, which he said was agreed to by all parties.
In a filing with the commission last year, Ahmad disputed state jurisdiction.
"(Pacific Energy & Mining) is not a transmission company. Rather it gathers the gas and delivers the same to the gas meter at its own property and equipment before it is transferred to Northwest Pipeline," Ahmad wrote.
In August of last year, the Public Service Commission issued an order disagreeing with the pipeline operator's nonjurisdiction arguments.
The Hazardous Facility Order issued this week by the commission states the pipeline operator failed to fix the majority of the problems identified in the inspection.
Parker said its relatively rare for the division to seek penalties or request a shutdown.
"In our view they did not make a good faith effort in complying with the law," he said. "Our main goal is to get people to comply."
The pipeline operator can appeal the Public Service Commission order.