March 19 (Bloomberg) -- Federal investigators found a leak on a natural gas pipeline next to one of the two buildings in New York City destroyed in an explosion that killed eight people last week.
The 8-inch main pipeline, parts of which are 120 years-old, failed a pressure test, the National Transportation Safety Board said in a statement yesterday. Segments of service pipelines found in the basements of the buildings have been removed and will be shipped to the NTSB lab in Washington for further investigation.
The failed test is the “first solid evidence” that a gas leak from a Consolidated Edison Inc. pipe probably caused the explosion, Kit Konolige, a New York-based analyst for BGC Partners LP, wrote today in a note to clients. That “puts the spotlight” on the utility’s inspection and maintenance of the line, he wrote. Konolige rates the shares at hold and owns none.
The blast near 116th Street, reported about 9:30 a.m. March 12, collapsed two buildings at 1644 and 1646 Park Ave. Eight people were killed and 49 were treated for injuries, according to the office of New York Mayor Bill de Blasio. Con Edison, the utility serving that part of the city, said it had received a report of a suspected gas leak before the explosion in East Harlem and had dispatched a crew in response.
The explosion was heard miles away and turned into a five-alarm fire. Windows were blown out as far as 10 blocks away, and cars parked on the street were wrecked. Debris flung onto adjacent elevated train tracks disrupted commuter rail services in and out of Grand Central Terminal.
The NTSB sent a team of investigators to the scene. The cast iron line was installed in 1887, the agency said.
Bob McGee, a spokesman for Con Edison, had no comment on the NTSB statement or the investigation. He referred all questions to the NTSB. The agency has not yet identified the cause of the explosion.
Con Edison fell 1.4 percent to $53.63 at 10:08 a.m. today in New York. The shares have dropped 2.8 percent since the explosion.
Con Edison workers detected gas in the ground in the area after the explosion, NTSB member Robert L. Sumwalt said at a March 14 press conference at the site. Gas analyzers discovered methane in five of 50 holes dug, with gas concentration in one hole at about 20 percent, he said. The samples were taken before Con Edison had cut off gas service to the area, he said.
Soil in New York City normally contains no gas, Sumwalt said.
“We’d expect to find zero gas,” Sumwalt said. “This was a pretty good concentration. It further leads to the hypothesis that this may have been a natural gas leak.”
The investigation will include collection and review of Con Edison documents, and interviews with Con Edison employees, first responders to the explosion and witnesses, according to Sumwalt.
“The leak is a potential cause of the accident and something investigators will be looking at,” said Brigham McCown, an industry consultant and former acting administrator of the Pipeline and Hazardous Materials Safety Administration. “It suggests a path for natural gas to potentially escape and pool,” he said in a telephone interview yesterday.
Investigators and other regulators are zeroing in on pipe age and condition as a possible cause, McCown said. It’s possible that the explosion could have weakened the gas pipe or created the leak, he said.
“We’ve known for some time we have aging infrastructure,” he said. “Cast iron pipe is really old and utilities have embarked on replacing it.”
It’s too early to say if Con Edison was responsible for the leak in the main pipeline, said Samya Lutz, outreach coordinator for the Pipeline Safety Trust, a watchdog group. Main lines can be damaged by a variety of causes, she said. The NTSB statement also doesn’t clarify whether the leak is in a cast iron or plastic segment of the line. Regulators have been pressing utilities to replace cast iron, which has been implicated in leaks, with plastic, she said.
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