Deadly Gas Explosions Near Boston Put Focus on Pipe Safety



(Bloomberg) -- Federal investigators were dispatched to three towns outside Boston after dozens of explosions and fires along NiSource Inc.’s natural gas network left at least one person dead, injured 13 and displaced over 8,000 customers.

Massachusetts State Police reported 39 incidents on the network in Lawrence, Andover and North Andover on Thursday. The blasts appear to be pipeline explosions, the National Transportation Safety Board said Friday in a briefing.

NiSource shares had their biggest intraday drop in a decade. Some of the company’s bonds slid to a record low.

NTSB Chairman Robert Sumwalt told reporters in Washington the agency sent a “go-team” of investigators that will arrive in the area at about noon local time. The inquiry will include looking at the design of the pipeline, any recent maintenance or upgrades and the integrity management system, he said.

"This will be a multidisciplinary investigation," Sumwalt said.

CreditSights Inc. analysts Nick Moglia and Andy DeVries said in a note that there will be “a higher potential for a financial impact to the utility” because work was in progress before the explosions.

“Unlike other gas utility explosions that unfortunately occur every few years, this one appears to have been caused by the utility working on the gas lines,” the analysts said. That could point to a “higher potential for gross negligence rather than just a corroded pipe.”

Ken Stammen, a NiSource spokesman, said in an email that he could not confirm whether the blasts were caused by work underway immediately beforehand.

Leonel Rondon, an 18-year-old from Lawrence, died after an explosion sent a chimney crashing into his car, the Associated Press reported. Thirteen people were treated at Lawrence General Hospital for injuries, according to the hospital’s Facebook page. One patient was transported to a Boston trauma center.

Officials believe the blasts were caused by over-pressurized gas lines, Andover Police Department Lieutenant Eddie Guy told NBC’s Today television show Friday morning. Columbia Gas of Massachusetts, the NiSource unit responsible for the local network, said in a statement that its crews would need to visit each of the 8,600 affected customers to shut off each gas meter and carry out a safety inspection.

Aging Infrastructure

National Grid Plc, which operates the electric utility in the area, was asked to shut power to all of Lawrence, North Andover and pockets of Andover, spokeswoman Christine Milligan said. The supply cuts were affecting about 18,000 customers as of 7 a.m., National Grid said on its website. The area is home to Phillips Academy Andover, whose alumni include George W. Bush and Humphrey Bogart.

In April, Columbia Gas filed a petition with the state’s Department of Public Utilities to increase annual revenues by $24.1 million in part to help the company replace aging infrastructure. All three towns were listed as areas where neighborhood lines would be replaced, the utility said on its website Thursday.

“Replacing leak-prone infrastructure is a leading priority,” the utility said in April. “However, it will take a number of years to eliminate the aging pipe from the gas distribution system.”

San Bruno

The explosions -- just days after the eight-year anniversary of a deadly blast on a PG&E Corp. gas transmission line in San Bruno, California -- may intensify the growing opposition across New England to using gas to heat homes and produce electricity. The San Bruno tragedy killed eight people and triggered more than $1 billion in fines and penalties.

“Right now, this looks like it could be comparable to the San Bruno fire in California, which had an onerous financial outcome” for PG&E Corp.,” Greg Gordon, an analyst at Evercore ISI, said in a research note.

With assistance from Rita Devlin Marier, Brian K. Sullivan, Elizabeth Wasserman, Mark Chediak and Rick Green. To contact the reporters on this story: Naureen S. Malik in New York at nmalik28@bloomberg.net; Rachel Adams-Heard in Houston at radamsheard@bloomberg.net; Terrence Dopp in Washington at tdopp@bloomberg.net; Brian Eckhouse in New York at beckhouse@bloomberg.net. To contact the editors responsible for this story: Simon Casey at scasey4@bloomberg.net Joe Ryan.



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