Builder of $2.5B Gas Liquids Pipeline Faces 48 Pa. Criminal Charges
Pipeline developer Energy Transfer LP faces 48 criminal charges in Pennsylvania for repeatedly allowing thousands of gallons of drilling fluid to escape during construction of the $2.5-billion Mariner East natural gas liquids pipeline system across the state from the western Marcellus Shale region to a Philadelphia area export terminal.
Energy Transfer failed to report the fluid losses to the Pennsylvania Dept. of Environmental Protection (DEP), and at multiple locations along the 350-mile route of the project's twin 16-in. and 20-in. pipes, the company used fluid that contained unapproved additives which spilled into groundwater, Attorney General Josh Shapiro said on Oct. 5 in announcing a state grand jury’s findings. “There is a duty to protect our air and water, and when companies harm these vital resources through negligence—it is a crime,” he said in a statement.
The grand jury that investigated the spills recommended Energy Transfer be charged under the state’s Clean Streams Law, including one felony count for non-disclosures to state officials. The firm also is the parent of Sunoco Pipeline LP. No project contractors have been charged.
The developer has not responded to multiple ENR queries. it said in previous public comments that it is cooperating with officials but intends to "vigorously defend itself.”
Energy Transfer also is owner of the 1,712-mile operating Dakota Access oil pipeline from the Dakotas to Illinois, for which the firm now is petitioning the U.S. Supreme Court to stop a lower-court required Army Corps of Engineers environmental review of a 1.7-mile segment that crosses under a lake near a Sioux reservation.
Tough Going
On the Mariner East project, Energy Transfer already has faced project shutdown and has been fined more than $20 million by DEP for at least 120 violations on the line, routed through 17 counties, crossing 2,700 properties and beneath 1,200 streams or wetlands. These include a $12.6-million penalty in 2018 that was one of the largest ever imposed by DEP. Shapiro received a criminal referral from DEP for Energy Transfer’s use of a guided auger bore that led to impact to a wetland and a nearby creek.
Construction began in early 2017 but is more than two years behind schedule, and subject to a number of consent decrees resulting from citizen lawsuits, says nonprofit publication StateImpact Pennsylvania. About 80,000 gallons of contaminated fluid were released during the construction of one pipeline section in Chester County between 2017 and 2020, Shapiro said. In addition to groundwater, lakes, rivers and streams were contaminated.
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In its second-quarter results reported on Aug. 3, Energy Transfer CFO Tom Long said Mariner East pipeline volume rose 15% over the same period in 2020. Remaining unfinished pipe sections are in Delaware and Chester counties near its eastern terminus.
"We now expect the next significant phase of the Mariner East project to be in service in the third quarter of 2021 and the final phase ... is expected to be completed in the fourth quarter," said Long. "Today, we are seeing demand exceed our current throughput capacity."
'Unfamiliar'
Pipeline construction was divided into six sections, each with its own prime contractor. Texas-based Energy Transfer wanted to have the pipeline under construction quickly, hiring horizontal directional drillers from out of state “who were unfamiliar with Pennsylvania geology and water features as well as the regulatory landscape in the state,” says the grand jury report. “The subcontractors applied their standard practices to an unusual environment, which resulted in environmental impacts.”
A former Energy Transfer employee testified before the grand jury that “leaks and spills of drilling fluid began to occur almost immediately,” said its report. One subcontractor lost drilling fluid 22 different times in drilling of the 20-in. line, and another faced a similar result nine times during work on the 16-in. line. Only two losses were reported to DEP. The volume of fluid lost totaled close to 3 million gallons, the grand jury said.
Its report also shows evidence that Energy Transfer failed to properly notify DEP of locations where the company did not have authorization to use horizontal directional drilling but began that process without permit modification in hand. In 22 locations, open cuts were permitted “but were changed in the field to some type of trenchless construction,” without proper permits or DEP notification,” says the grand jury.
In suspending Energy Transfer’s permit in 2018, DEP said its “conduct demonstrates a lack of ability or intention to comply with the Clean Streams Law” and other statutes, the grand jury said. “Failures to report were not the product of insufficient information from the field. Evidence before the grand jury demonstrated ... an elaborate system of recordkeeping.”
If found guilty, the company will face fines and restitution, but no jail time, Shapiro said. He also does not have authority to revoke the firm’s permits, which is for DEP to determine.
“That’s why we are, once again, calling for stronger laws to hold these companies accountable and protect Pennsylvanians’ health, and demanding [DEP] toughen up the independent oversight ... for the industries they regulate,” he said. DEP told media it was reviewing the grand jury report to determine any added action.
