Crews were still battling the flames many hours after the firestorm on Thursday evening swept through part of San Bruno, a small city near San Francisco International Airport.
Four people were killed and 52 were injured, including three critical burn victims and four firefighters, said California Lt. Governor Abel Maldonado, standing in for Governor Arnold Schwarzenegger who was on a trade mission in Asia.
The ruptured pipeline belongs to utility Pacific Gas & Electric Co, and shares of parent company PG&E Corp dropped about 7 percent on Friday.
The blast left a large crater, and residents said it was so strong they first thought it was an earthquake or plane crash.
With the fire 75 percent contained, firefighters faced the grim task of sifting through the charred homes in search of victims. Many people were still missing, and San Bruno Mayor Jim Ruane said he expected the number of dead to rise.
"The flames were so surreal. It was like out of a sci-fi movie," said Kaila Uniacke, 17, who was at home with her brother when they heard the blast at about 6 p.m. local time on Thursday.
Drivers on their way home from work said they could see the flames from the freeway, and some streets around the area were jammed up with cars shortly after the blast as residents fled in a panic.
Connie Morales described the sound as like "horrible, horrible thunder."
"Then it roared," she added. "It kept going and going and going."
The lieutenant governor, who declared a state of emergency to hurry assistance to the city and victims, saw melted cars and sewage on the street when he toured the site, and he said there would be an independent investigation.
"I want to know more about people that called who smelled gas. Where did they call? Who responded?" Maldonado said in a television interview. "There's a lot of questions still to be asked out there."
Officials had not been able to get near enough to determine what happened, according to PG&E President Chris Johns, who could not yet comment on the reports of people smelling gas.
"But we have records that we are going back right this minute to try to confirm what exactly those phone calls looked like and when they occurred," Johns told a news conference.
PG&E said it isolated the damaged section of the 30-inch (76-cm) steel gas transmission pipeline. The National Transportation Safety Board, which investigates gas leaks, has started an investigation.
