Let’s look and see what the NEC has to say;
300.3 Conductors.
(B) Conductors of the Same Circuit. All conductors of the same circuit and, where used, the grounded conductor and all equipment grounding conductors and bonding conductors shall be contained within the same raceway, auxiliary gutter, cable tray, cablebus assembly, trench, cable, or cord, unless otherwise permitted in accordance with 300.3(B)(1)](http://code.necplus.org/document.php?field=jd&value=necss:70-2011:id02011004879#70-2011:id02011004879) through (B)(4)](http://code.necplus.org/document.php?field=jd&value=necss:70-2011:id02011004887#70-2011:id02011004887).
(2) Grounding and Bonding Conductors. Equipment grounding conductors shall be permitted to be installed outside a raceway or cable assembly where in accordance with the provisions of 250.130(C)](http://code.necplus.org/document.php?field=jd&value=necss:70-2011:id02011004494#70-2011:id02011004494) for certain existing installations or in accordance with 250.134(B)](http://code.necplus.org/document.php?field=jd&value=necss:70-2011:id02011004508#70-2011:id02011004508), Exception No. 2, for dc circuits. Equipment bonding conductors shall be permitted to be installed on the outside of raceways in accordance with 250.102(E)](http://code.necplus.org/document.php?field=jd&value=necss:70-2011:id02011004282#70-2011:id02011004282).
250.130 Equipment Grounding Conductor Connections.
(C) Nongrounding Receptacle Replacement or Branch Circuit Extensions. The equipment grounding conductor of a grounding-type receptacle or a branch-circuit extension shall be permitted to be connected to any of the following:
(1) Any accessible point on the grounding electrode system as described in 250.50](http://code.necplus.org/document.php?field=jd&value=necss:70-2011:id02011004004#70-2011:id02011004004)
(2) Any accessible point on the grounding electrode conductor
(3) The equipment grounding terminal bar within the enclosure where the branch circuit for the receptacle or branch circuit originates
(4) For grounded systems, the grounded service conductor within the service equipment enclosure
(5) For ungrounded systems, the grounding terminal bar within the service equipment enclosure
Informational Note: See 406.4(D)](http://code.necplus.org/document.php?field=jd&value=necss:70-2011:id02011009172#70-2011:id02011009172) for the use of a ground-fault circuit-interrupting type of receptacle.
Now let’s look and see what constitutes an equipment grounding conductor;
**250.118 Types of Equipment Grounding Conductors. **
**The equipment grounding conductor run with or enclosing the circuit conductors shall be one or more or a combination of the following: **
**(1) ****A copper, aluminum, or copper-clad aluminum conductor. This conductor shall be solid or stranded; insulated, covered, or bare; and in the form of a wire or a busbar of any shape. **
**(2) ****Rigid metal conduit. **
**(3) ****Intermediate metal conduit. **
**(4) ****Electrical metallic tubing. **
**(5) ****Listed flexible metal conduit meeting all the following conditions: **
**a. ****The conduit is terminated in listed fittings. **
**b. ****The circuit conductors contained in the conduit are protected by overcurrent devices rated at 20 amperes or less. **
**c. ****The combined length of flexible metal conduit and flexible metallic tubing and liquidtight flexible metal conduit in the same ground-fault current path does not exceed 1.8 m (6 ft). **
**d. ****If used to connect equipment where flexibility is necessary to minimize the transmission of vibration from equipment or to provide flexibility for equipment that requires movement after installation, an equipment grounding conductor shall be installed. **
(6) Listed liquidtight flexible metal conduit meeting all the following conditions:
a. The conduit is terminated in listed fittings.
b. For metric designators 12 through 16 (trade sizes through ½), the circuit conductors contained in the conduit are protected by overcurrent devices rated at 20 amperes or less.
c. For metric designators 21 through 35 (trade sizes ¾ through 1¼), the circuit conductors contained in the conduit are protected by overcurrent devices rated not more than 60 amperes and there is no flexible metal conduit, flexible metallic tubing, or liquidtight flexible metal conduit in trade sizes metric designators 12 through 16 (trade sizes through ½) in the ground-fault current path.
d. The combined length of flexible metal conduit and flexible metallic tubing and liquidtight flexible metal conduit in the same ground-fault current path does not exceed 1.8 m (6 ft).
e. If used to connect equipment where flexibility is necessary to minimize the transmission of vibration from equipment or to provide flexibility for equipment that requires movement after installation, an equipment grounding conductor shall be installed.
(7) Flexible metallic tubing where the tubing is terminated in listed fittings and meeting the following conditions:
a. The circuit conductors contained in the tubing are protected by overcurrent devices rated at 20 amperes or less.
b. The combined length of flexible metal conduit and flexible metallic tubing and liquidtight flexible metal conduit in the same ground-fault current path does not exceed 1.8 m (6 ft).
(eight) Armor of Type AC cable as provided in 320.108](http://code.necplus.org/document.php?field=jd&value=necss:70-2011:id02011006219#70-2011:id02011006219).
(9) The copper sheath of mineral-insulated, metal-sheathed cable.
(10) Type MC cable that provides an effective ground-fault current path in accordance with one or more of the following:
a. It contains an insulated or uninsulated equipment grounding conductor in compliance with 250.118](http://code.necplus.org/document.php?field=jd&value=necss:70-2011:id02011004403#70-2011:id02011004403)(1)
b. The combined metallic sheath and uninsulated equipment grounding/bonding conductor of interlocked metal tape–type MC cable that is listed and identified as an equipment grounding conductor
c. The metallic sheath or the combined metallic sheath and equipment grounding conductors of the smooth or corrugated tube-type MC cable that is listed and identified as an equipment grounding conductor
(11) Cable trays as permitted in 392.10](http://code.necplus.org/document.php?field=jd&value=necss:70-2011:id02011008439#70-2011:id02011008439) and 392.60](http://code.necplus.org/document.php?field=jd&value=necss:70-2011:id02011008541#70-2011:id02011008541).
(12) Cablebus framework as permitted in 370.3](http://code.necplus.org/document.php?field=jd&value=necss:70-2011:id02011007938#70-2011:id02011007938).
(13) Other listed electrically continuous metal raceways and listed auxiliary gutters.
(14) Surface metal raceways listed for grounding.
Informational Note: For effective ground-fault current path, see 250.2](http://code.necplus.org/document.php?field=jd&value=necss:70-2011:id02011003616#70-2011:id02011003616) Definition.
The singe equipment grounding is not landing on one of the 5 places outlined in 250.130(C) nor does the water pipe that it lands on meet any of the requirements of 250.118.
Therefore the conductor as pictured is in violation of the NEC and is useless and needs to be removed.