Wichita Eagle Eyes Regulatory Cracks Before a Failure

Here’s a solid Wichita Eagle report that shows the holes in a regulatory system—ones that could have deadly consequences.

What I particularly like about Dion Lefler’s story is that it is anticipatory reporting on the regulatory system—before a failure reveals holes in oversight. That’s the most important kind of regulation story.

A year and a half ago, a federal judge overturned Kansas regulations on storing natural gas underground, ruling that they violated the commerce clause since the gas is ultimately transported across state lines.

So Kansas ends up helpless to protect its own people, despite having its people reside atop pits that hold 12 billion cubic feet of explosive gas. The Eagle puts it well:

The state can’t inspect them.

The federal government has chosen not to.

As a result, thousands of Kansans live on and around uninspected gas-storage fields that dwarf the system that caused the Hutchinson disaster.

That’s followed by this from the company that sued Kansas to stop its inspections:

The gas company that sued Kansas says it’s not a concern, that internal inspections and policies are enough to ensure public safety.

In other words: Duck and cover. Self-regulation hasn’t worked out so well throughout history.

Indeed, the stepped-up regulations were passed in the wake of a 2001 explosion in Hutchinson that killed two, destroyed several businesses, and sent geysers of natural gas popping up around town, which brought the National Guard in for evacuations. A pipe had busted, leaking 140 million cubic feet of gas from an underground storage facility.

So why is the federal government letting gas companies self-regulate their massive underground storage facilities?

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum. Tags: , , ,