DOWNEY - A proposal to grant franchise rights to an oil pipeline running beneath the city is temporarily on hold amid concerns over the pipeline's stability and whether $20 million in insurance coverage is sufficient in the unlikely event of a catastrophic disaster.The issue is expected to be revisited at the March 22 City Council meeting. Councilman David Gafin asked if the pipeline is safe, and spoke of the natural gas explosion that killed eight people and destroyed 38 homes in Northern California last year. A representative of LT Pipeline Inc., which is seeking a 20-year franchise agreement to take control of the pipeline, said his company is not "completely certain of the pipeline's integrity" but added that testing would be conducted under the purview of the state fire marshal. "Our intent is to make the pipeline safe before we put our product in," he said. Councilman Mario Guerra also questioned the $20 million cap on insurance coverage outlined in the franchise agreement. If the City Council eventually approves the franchise deal, the city would collect $19,553 in annual payments, with yearly adjustments based on the Consumer Price Index. LT Pipeline would also pay the city a one-time franchise granting fee of $10,000. The pipeline dates to 1995, when it was installed by Arco as a means to transport oil, gas and petroleum. The 4-inch pipeline begins on Columbia Way where it turns west on Imperial Highway, north on Paramount Boulevard, west on Quill Drive, north on Old River School Road and west on Stewart and Gray Road, where it heads into South Gate.
********** Published: March 10, 2011 - Volume 9 - Issue 47