January 2014, Vol. 69 No. 1
Newsline
INGAA President Lauds House Approval Of Pipeline Permitting Bill
Don Santa, president and CEO of the Interstate Natural Gas Association of America, praised the U.S. House of Representatives’ passage of Representative Mike Pompeo’s legislation to improve the natural gas transmission pipeline permitting process. The bill was approved 252 to 165:
“We applaud the House for approving this legislation, which will improve the permitting process for interstate natural gas pipelines. Pipelines are the key to America’s natural gas revolution because they are the indispensable link from the supply source to the ultimate gas consumer.
“The Pompeo bill is consistent with the principal recommendation of an INGAA Foundation report on permitting released in December of 2012. The report found that, while FERC does an effective job of reviewing applications to build new pipelines, it lacks the authority to enforce permitting deadlines for other federal and state agencies. This deficiency increasingly is causing pipeline project delays. Providing clear permitting deadline authority will add certainty to the process and encourage timely decision-making.
“Under this legislation, the deadline to approve a project permit would not start until after completion of the NEPA (environmental) review. By that point, a pipeline project developer would have been in consultation with both FERC and the permitting agencies for 12 to 18 months, and sometimes longer. Consequently, it is entirely reasonable to expect a permitting agency to be able to make a final decision within 90 days of the NEPA process completion.
“We hope the Senate takes prompt action on this legislation that will facilitate the responsible and orderly development of infrastructure that will enable consumers to realize more fully the benefits of the shale revolution.”
JM Eagle found liable for faulty PVC pipes
A California jury found JM Eagle, formerly known as J-M Manufacturing Inc., knowingly manufactured and sold substandard PVC pipes to government entities for water and sewage systems across the country from 1996 to 2006. The trial exposed JM Eagle’s deliberate efforts to cut costs by using shoddy manufacturing practices to make weaker but more profitable polyvinyl chloride (PVC) pipe.
The unanimous verdict reached Nov. 14 comes seven years after whistle-blower John Hendrix alleged J-M, which is now called JM Eagle, violated the False Claims Act by selling products with shorter life spans than promised.
Hendrix is a plaintiff along with the states of Nevada, New Mexico and Virginia, 21 cities in California and 21 water districts in California. Originally filed by Hendrix in 2006, the suit was unsealed Feb. 8, 2010, in Los Angeles in U.S. District Court, when the government entities formally joined the suit.
Los Angeles-based JM Eagle plans to appeal the verdict. It said the lawsuit was brought by a disgruntled former employee.
JM Eagle is on the line for paying billions of dollars in damages to the plaintiffs, as well as dozens of other states, cities and water districts that bought the company’s pipe products but didn’t join the lawsuit.
During the seven-week trial, the jury heard technical testimony about various pipe failures, Underwriters Laboratories Inc. (UL) standards and the forensic analysis of plastic to determine the root causes of failure. They also saw more than 300 JM Eagle documents.
In addition to Reno, the claims in the trial focused on the city of Norfolk, VA, and the Calleguas Municipal Water District, South Tahoe Public Utility District and Palmdale Water District, which are all in California.
Those five government entities were selected from the larger group as exemplar plaintiffs. However, all the states, cities and water districts named in the case could share in the damages that are recovered. The damages are supposed to cover the cost to replace pipes that have failed as well as the cost government entities will pay to replace PVC pipes sooner than expected. Nevada was one of the largest purchasers of JM Eagle pipe and experienced many failures of that pipe.
Meanwhile, Formosa Plastics, which was formerly the owner of JM Eagle, has agreed to pay $22.5 million to those same government entities to settle claims in the qui tam lawsuit about its role in the fraud. The settlement was reached shortly before the JM Eagle trial began in September but wasn’t announced at that time. The court must approve the settlement before it is final.
In Memoriam
Ben Montgomery, 95, passed away Nov. 3 in Mesa, AZ. Prior to his retirement as a vice president of CRC-Evans Pipeline International Inc., Montgomery was elected to honorary membership in the Pipe Line Contractors Association. He is survived by his wife Karen, two daughters, one son, six grandchildren and five great grandchildren.
Donations may be made in Ben Montgomery’s name to the Arizona Humane Society, Phoenix, AZ, or the Boyce Thompson Arboretum, Superior, AZ.
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