Status of Summerlin natural gas pipeline case shrouded in secrecy

By Steve Green

Tuesday, Sept. 14, 2010 | 11:20 a.m.

The Sept. 9 fatal natural gas pipeline explosion in San Bruno, Calif., may have some Las Vegans wondering what happened to last year's lawsuit challenging expansion in the capacity of an even-larger gas pipeline in western Las Vegas and Summerlin.

The answer is: only a handful of attorneys know the status of the litigation, since a federal judge in Las Vegas issued a sealed, or secret, order closing the case in May.

However, more facts may come to light in the future as both sides have appealed the secret ruling to the 9th U.S. Circuit Court of Appeals in San Francisco.

The Las Vegas dispute arose in April 2009 when Howard Hughes Corp., developer of the Summerlin planned community in Las Vegas with 100,000 residents, sued Kern River Gas Transmission Co. of Salt Lake City to block Kern's plan to boost pressure in Kern's 36-inch pipeline by 11 percent to 1,333 pounds per square inch.

The line runs from Wyoming to Southern California and has a stretch that runs through Summerlin. Kern River said it needed to expand pressure in its pipe because it had signed up more gas customers on the pipeline route.

The line that exploded in San Bruno, killing four people and destroying 37 homes, was 30 inches in diameter.

Hughes charged in the 2009 lawsuit: "a higher-pressure pipeline may contribute to marketplace concerns about safety, the mere perception of which could have an immeasurable negative impact on Summerlin's viability and appeal as a residential community."

Attorneys for Kern River, however, argued that the Federal Energy Regulatory Commission has the exclusive authority to regulate its pipeline and that FERC had signed off on the plan. They also said the U.S. Department of Transportation approved the expansion.

Despite the lawsuit and objections filed with FERC by Hughes, Kern River proceeded with the expansion and boosted the pressure in the line in April of this year.

Because of the secrecy surrounding the lawsuit, it's unclear what is being appealed to the 9th Circuit.

After it was sued, Kern River filed a counterclaim against Hughes saying: "FERC determined that there is no evidence supporting Hughes' allegation that the (pressure) increase will adversely impact the economic health of the affected communities."

"The FERC determined that there will be no adverse safety impacts resulting from Kern River’s operation of its facilities in accordance with the U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration standards and the conditions imposed by the Department of Transportation in its special permit order," Kern River attorneys said in a court filing.

Kern River also complained it had unable to obtain an easement amendment from Hughes and was unable to "agree with Hughes as to the compensation to be paid, if any, for the easement amendment."

"Kern River contends the increase in (pressure) will have no financial impact on the real property at issue and therefore the just compensation due the defendants is nominal, if any," the filing said.

Much of the case was shrouded in secrecy, with both sides agreeing to seal many documents in the case, citing federal law designating "Critical Energy Infrastructure Information" related to Kern River's pipeline.

A separate lawsuit filed in August by Kern River against the Summerlin North Community Association, charging it was failing to cooperate with the expansion plan, was later settled under undisclosed terms.

One thing appears to be clear from the litigation: The Kern River pipeline, which was installed in the early 1990s as the development of Summerlin was beginning, is probably in better shape than the Sun Bruno line installed in 1956.