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Date: Tue, 22 Aug 2000 07:07:00 -0700 (PDT)
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Subject: El Paso Articles Today-NGI
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Note:  The following 3 articles deal with 3 different issues:

1st -- Marketing related
2nd - Operations/marketing related
3rd - Legislative/regulatory related


El Paso Explosion Takes 500 MMcf/d Off Market

About 1 Bcf/d of flow on El Paso's South Mainline downstream of Pecos River 
(NM) Station ceased after the 
pipeline exploded early Saturday, killing 10 people and seriously injuring 
two others at a nearby campsite.

El Paso said Monday it was able to compensate for about half that volume 
through a combination of fuel 
switching by downstream customers, maximum storage withdrawals, an OFO and 
other customer cooperation. 

The market reaction was rather predictable as all three California points 
rose by about 35 cents to lead an 
overall price surge. However, utilities in the state did not appear to be 
experiencing any supply problems. 
SoCal Gas said storage and supplies from other Southwest receipt points were 
adequate to avoid any 
problems. A gas operations official for Los Angeles Dept. of Water and Power 
also saw no reason for panic. 
From past similar incidents on Southwest pipelines, he expected that the 
approximately 80-feet-long section 
missing from El Paso's line could be "slapped back into place rather 
quickly." 

El Paso itself had no estimate for when it can restore service in the 
impacted segment; it must get approval 
rom the federal investigators before beginning repairs or evaluating a 
restart of the adjacent lines. But a large 
aggregator and a marketer agreed with the LADWP official that it should be "a 
quick mechanical fix" once 
repairs begin. The aggregator believed downtime could be as short as a week. 

No customers were cut off as a result of the rupture but some were getting 
reduced volumes, an El Paso 
spokeswoman said. 

Northern Natural Gas was seeing a throughput increase of 200-300 MMcf/d 
Monday while Transwestern 
volumes were up 50-75 MMcf/d as a result of shippers diverting gas away from 
El Paso's South Mainline, 
an Enron spokeswoman said. A producer said she diverted as much of her 
company's gas as possible from 
El Paso to Transwestern. 

People were reluctant to trade Permian Basin gas Monday, especially at fixed 
prices, because of doubts 
about how much would be able to flow, several sources said. Permian numbers 
rose a little less than 18 cents 
as part of the general upturn. However, it was Waha prices that saw a bigger 
increase of nearly 30 cents as a 
result. "Everything in El Paso-Permian's Keystone pool was going back into 
Waha," said a marketer, putting 
Waha in the mid $4.60s at a premium of more than a nickel above Henry Hub. 

The Southern California border, at an average of nearly $5.30, led the rest 
of Monday's market by a large margin. 
Before trading began, EnronOnline was offering border swing swaps for the 
rest of the month at $5.85-95, a 
marketer said. With swing swaps priced so high, it gave sellers more 
confidence in what prices they could 
command in the day market, he said. "Either way, I wouldn't want to be short 
right now at the border." 

There were lots of rumors but no facts available on what caused the El Paso 
rupture, noted one aggregator. 
"But it's a good thing it didn't happen until after California had cooled 
off. Otherwise I could easily have seen 
the border basis spread from San Juan Basin go as high as $2.50" instead of 
the approximate gap of $1.70 
egistered Monday by Daily GPI. 

A knowledgeable source provided his analyis of the blast: The structure of 
the crater made the rupture "look 
like a line integrity problem from the way it blew out." The earth can harbor 
leaking gas for a while until eventually 
everything all goes up at once. People nearby would not have detected 
anything because gas is odorless in 
long-haul lines; the mercaptan odorant is not added until it gets to the 
local distribution stage. Pipeline safety 
surveyors usually will look for dead vegetation in the vicinity to detect a 
leak, but this was a desert area with very 
little vegetation. It is easily possible for escaping gas to hug the ground 
for the approximate 500-foot distance to 
the victims' campsite and seek an ignition source there. It is a normal 
tendency for gas leaking into the atmosphere 
to stay close to the ground, and that tendency would have been amplied by the 
chilliness of the pre-dawn desert. 

The source went on to say, "I think there will be lot more of this [ruptures] 
in the future with many pipes becoming at 
least 40-50 years old." El Paso was unlucky in experiencing one of the early 
incidents, he said, because the situation 
applies to the other lines with old pipe. Pipelines used to spend a lot more 
money on maintenance when regulation 
was tighter and they were still paying for depreciation, he said. "Now 
they're more purely for-profit companies after 
having written off their [depreciation] costs many times over." 

_________________________________________________________


El Paso Blast Kills 10; Shuts Down South Mainline

Federal and company investigators Monday swarmed over the scene of the 
devastating El Paso Natural Gas 
mainline explosion that erupted near daybreak Saturday, engulfing a party of 
weekend campers along the Pecos 
River near Carlsbad, NM, and killing 10 people. Two other persons were 
hospitalized in critical condition. 

Three officials from the federal Office of Pipeline Safety (OPS) and 11 with 
the National Transportation Safety 
Board (NTSB) have been at the site of the blast since late Saturday, and two 
more OPS officials were en route 
Monday. New Mexico Gov. Gary Johnson, who flew to the area on Sunday, said he 
wanted to know how many 
other potential pipeline "dangers" there are in the state. He called for a 
thorough investigation. 

About 1 Bcf/d of capacity on El Paso's southern leg initially was lost from 
the ruptured 30-inch line and two looped 
lines nearby that were shut in after the accident. El Paso was making up some 
of the shortfall by drawing the 
maximum, 200 MMcf/d from its Washington Ranch Storage Field downstream of the 
accident. Increased use of 
other pipelines, allocations and cutbacks by customers, and the fact that 
weather had moderated in California 
helped ease the supply situation. Nevertheless, spot prices increased by 
about 35 cents for points in California, 
while the rest of the market (spurred by Hurricane Debby) went up about 20 
cents. 

There was no estimate as to when the looped lines would be back in service, 
according to El Paso spokesperson 
Kim Wallace. 

"We don't intend to put anything back into service until we know for certain 
that the remaining pipelines are safe," 
Wallace said. She did not expect them to be back in service today, and could 
give no time frame on when they 
would be returned to service. 

It is "much too premature at this point" to predict when the three disabled 
El Paso westbound lines will return to 
service, said Patricia Klinger, a spokeswoman with the Department of 
Transportation's Research and Special 
Programs Administration (RSPA), which oversees the OPS. 

"The one that ruptured is definitely going to be out of service for awhile, 
and [another line] is badly damaged 
from the fire." As for a third adjacent line, that "could potentially be 
re-opened," but "we have to test the integrity 
of that line" and have it examined by metallurgists, she told Daily GPI. 
"Everyone will be working, of course, to 
try to get this [line] back in service. But the safe operation of the 
pipeline is of premiere importance." The three 
lines shared the same right-of-way. 

"We're just now able to start looking at exactly what happened, and how to 
get that one line back in service," 
Klinger said. "Our metallurgist is on his way right now. I know he's going to 
meet with the NTSB when they're 
examining the 50-foot section of pipe that's out of the ground" as a result 
of the explosion. "I think the company 
also wants to decide what types of tests can be done on this line. It's not 
piggable." 

The NTSB, which has set up a command center in Carlsbad, NM, declined to make 
any preliminary speculation 
about the cause of the explosion. "It's much too early for us to even think 
about the cause of this accident. We're 
only dealing with the facts...Right now, we're documenting the pipe itself 
and surveying the land. We're going to 
look at the chronology of when the [emergency] calls came in..... document 
damage to vehicles, and injuries," 
said NTSB spokesman Keith Holloway. 

"Probably at this point we're looking at nine months to a year, maybe more" 
before the results of the investigation 
are publicly disclosed, Holloway noted. 

The rupture occurred at 5:30 a.m. MDT in the underground line near the Pecos 
River crossing, which is about 30 
miles south of the Carlsbad Caverns National Park in a spot popular with 
local campers and fishermen. The blast 
tore a crater in the earth about 86 feet long, 46 feet wide and 20 feet deep. 

According to preliminary reports, the pipeline was underground at the point 
of rupture, sending two sections of pipe, 
each about 20-feet long, flying hundreds of feet. The gas then ignited and 
shot flames from the broken pipe toward 
sleeping campers. The NTSB estimated there was a gap of 50 to 60 feet between 
broken ends of the pipeline at 
the site. The fire burned for about 40 minutes before El Paso workers 
manually shut off pipeline valves. 

Ten members of two families were burned to death in the blast. The families, 
who were related by marriage, were 
camping on public land along the river near where the pipeline emerged from 
the ground to cross the Pecos in an 
aerial crossing alongside a bridge. Six were pronounced dead at the scene and 
four others died at Texas hospitals 
Saturday night. The dead included five children under the age of six, 
including six-month-old twins. Two adults were 
listed in critical condition Monday at a hospital in Lubbock, TX. 

The ruptured pipeline, which El Paso said was constructed in 1950, is one of 
four that runs along the southern branch 
of El Paso's pipeline system. There is an adjacent 30-inch pipeline and 
another 26-inch pipeline. The fourth, a 
16-inch pipeline, was abandoned and is not available for service, Wallace 
said. El Paso and federal officials are 
particularly interested in the integrity of the second 30-inch pipeline that 
ran close to the broken line. 

Wallace said that none of the company's customers had been cut off of 
service, but they were receiving gas as 
reduced levels. 

She also said that on Aug. 2, a "patrol" inspection, either done by air or 
vehicle, was conducted on the pipelines 
located near the Pecos River by El Paso officials and no problems were found. 
El Paso conducted the last 
corrosion test in February and no problems were found then either. Visual 
inspections are conducted on all of the 
system's pipelines once a month, she said, and the company follows all 
federal pipeline requirements for inspections. 

Asked whether El Paso planned to change its inspection system immediately, 
Wallace said that she did not think 
so, but said that if the NTSB review finds something that needs to be 
changed, the company will do whatever needs 
to be done immediately. 

"These situations are so rare," she said. "We don't feel that we need to 
change what we're doing now. But if the 
situation warrants, we certainly will make any changes necessary." 

El Paso is working with family members to take care of their immediate needs, 
including hotel accommodations, 
food, travel arrangements and medical treatment. The company also is 
providing additional services as needed. 

"This is a tragic accident and our heartfelt condolences go out to the 
families involved," said El Paso Energy President 
William Wise. He said the company was working with the NTSB "to investigate 
diligently all matters surrounding this
 accident and to establish its cause as quickly as possible." 

The fallout of the explosion is expected to extend all across the country, as 
federal legislators consider more 
stringent pipeline rules following an explosion in Bellingham, WA, that 
killed three in June 1999. Locally, Carlsbad 
Mayor Gary Perkowski said that he wanted to find out what happened and keep 
it from ever happening again. 

That reaction was echoed by the New Mexico governor. "I have a lot of 
questions," said Johnson. "What is the 
reliability of these pipelines? What went wrong? Was it preventable?" 

Meanwhile, RSPA was sifting through its history to determine whether the El 
Paso blast was the biggest pipeline 
disaster on record in terms of fatalities. 

Timeline: 

5:26 a.m. Aug. 19: El Paso Natural Gas' automated computer reading of the 
pressure in the pipeline indicates 
673.5 pounds per square inch. 

Around 5:30 a.m.: An El Paso Natural Gas employee bow-hunting in the area 
sees a large fireball at the scene. 

5:30 a.m.: El Paso Natural Gas' automated computer reading of the pressure in 
the pipeline drops to 377.19 
pounds per square inch. 

5:30 a.m.: Carlsbad Fire Department responds to the emergency. 

6:12 a.m.: Carlsbad Fire Department arrives at the scene. 

6:21 a.m.: El Paso Natural Gas workers shut off the gas line using manual 
valves. 

Between Jan. 1 and June 30 of this year, there have been 40 transmission 
pipeline incidents, according to the OPS. 
Fourteen were caused by either external or internal corrosion; 11 were 
damaged by outside forces; three were due 
to construction or material defects; and 10 were unknown. There was only one 
fatality until June 30 of this year on 
transmission pipeline incidents, which was caused by an outside force. Eleven 
people had been injured through June. 

In August 1999, OPS sent a warning letter to El Paso, citing it for a number 
of pipeline safety violations in Arizona. 
The OPS did not impose a civil fine on El Paso, but it advised the pipeline 
that "should you not correct the 
circumstances leading to the violation, we will take enforcement actions when 
and if the continued violation comes 
to our attention." 


------------------------------------------------------------------------------
--

El Paso Blast May Cinch Tough Pipe Safety Bill

The explosion on El Paso Natural Gas' system, which killed 10 people over the 
weekend, may give Congress 
the added boost to pass a tough pipeline safety reauthorization bill when it 
returns from recess in September, 
Capitol Hill insiders said Monday. 

"This just sadly proves why Congress needs to act as soon as it returns [on 
Sept. 5] to pass the Pipeline Safety
 Improvement Act before any more innocent lives are taken," said a 
spokeswoman for Sen. John McCain (R-AZ). 

In June, Chairman McCain's Senate Commerce Committee voted out the Pipeline 
Safety Improvement bill that 
would, among other things, give states inspection and oversight authority 
over interstate pipelines; require 
interstate pipelines to consult with states about their integrity plans; 
create stiffer penalties for pipeline safety 
transgressors; and offer protection to whistle-blowers who report pipeline 
violations. McCain proposed the 
agressive safety bill following the product pipeline explosion in Bellingham, 
WA, that killed three in June 1999. 

"McCain has always been determined to pass this bill this year, but this 
obviously sadly strengthens that resolve," 
she said. He "will make a determined effort for this to happen," but whether 
it's brought up for a vote on the Senate 
floor will be up to Senate Leader Trent Lott (R-MS), the McCain spokeswoman 
said. 

"I have no doubts" that the Senate will push for pipeline safety when it 
returns, said Terry Boss, vice president of 
environment, safety and operations for the Interstate Natural Gas Association 
of America (INGAA). 

On the House side, a companion to McCain's bill has been introduced, as well 
as a number of other pipeline safety 
measures, but most are at the subcommittee level. But the issue could pick up 
steam in the wake of the El Paso 
blast. "We must examine why this accident occurred and ensure that it must 
never happen again," said Rep. Joe 
Skeen (R-NM). 

"Definitely it's a tragic situation," Boss said, referring to the explosion 
near Carlsbad, NM, which reportedly left a 
crater about 20 feet deep, 46 feet wide and 86 feet long. Five of the 10 
fatalities were children, who were spending 
a weekend camping and fishing with their family along the Pecos River. 

The political fallout from the disaster was being assessed in Washington D.C. 
yesterday. "Any kind of incident 
has political ramifications.....We're just not sure how this is going to 
'directly impact'" pending legislation and 
regulations, Boss noted. 
