Source: http://www.journalgazette.net, June 25, 2017
By: Catherine Traywick
Energy Transfer Partners is making a mess of its biggest project since the Dakota Access pipeline.
Construction of the $4.2 billion Rover natural gas line has caused seven industrial spills, polluted fragile Ohio wetlands and angered local farmers. The company owes $1.5 million in restitution after demolishing a historic house.
The Ohio Environmental Protection Agency is furious and a federal energy regulator has launched a rare public investigation that threatens to delay the pipeline’s scheduled Nov. 1 completion.
“We’ve not seen a project in Ohio with spills at this size and scale, and if we can’t even trust Rover to construct this pipeline, how can we trust them to operate it when it’s complete?” said Heather Taylor-Miesle, executive director of the Ohio Environmental Council.
Energy Transfer, the Dallas-based company led by billionaire Kelcy Warren, promised part of the 713-mile pipeline would open in July, but work is stalled on key segments until the company’s responsibility for the spills can be assessed by the Federal Energy Regulatory Commission, or FERC.
“We are working with FERC and the OEPA to resolve these issues in a manner that is satisfactory to everyone involved, and most importantly ensures the complete remediation of these areas,” said Energy Transfer spokeswoman Alexis Daniel. Recent developments have not affected the project’s timeline, Daniel said.
Any delay would pinch natural gas producers that contracted to ship on the line, which will bring resources from the Marcellus shale to the Midwest.
Seven companies have booked 2.9 billion cubic feet a day, enough to power 51,000 homes for an entire winter, once Rover is completed. The company stands to lose more than $10 million a week if it misses the deadline, according to Bloomberg Intelligence analyst Michael Kay.
Gas traders, too, are on alert for work interruptions. When FERC ordered Energy Transfer to halt new construction after the Ohio spills, natural gas futures hit a 14-week high.
For Rover, the hold-up stems from mishaps that have prompted federal regulators to look closely at Energy Transfer’s conduct before allowing work to finish.
The first hint of trouble came last year, when Energy Transfer disregarded a FERC recommendation and razed the 173-year-old Stoneman House in Carroll County, Ohio. The agency used the demolition as a basis for denying Rover a blanket construction permit, forcing Energy Transfer to seek federal approvals at virtually every stage of construction.
With that restriction, FERC approved the project in February, and Energy Transfer undertook an aggressive construction push. In a matter of weeks, workers cleared 2,918 acres of trees along 511 miles of the pipeline’s route, finishing just in time to beat bat-roosting season, which would have halted work. The company said it’s hired 13,000 workers over the past four months.
Rover’s construction, through flat, wet farmland, coincided with heavy rains. Crews had to drain excessive water and find a way to dispose of it.
Farmers complained that the company was dumping it on their fields, interrupting planting. Between April 5 and May 8, the Ohio EPA cited Energy Transfer at least 16 times for improperly disposing of sediment-laden water in streams.
“While we are working within the parameters of our FERC permit as it relates to storm water, we understand the landowners’ concerns and we are working with them to resolve this issue in a way that is satisfactory to everyone involved,” Energy Transfer’s Daniel said.
Many farmers bristled at Energy Transfer’s attitude, said Matt Strayer, an attorney representing about 200 landowners that have easement agreements with the company. The tight timeline meant that paying for damage was preferable to preventing it, Strayer said.
“They’ll do what they want, and they don’t care who they step on to get there,” said Ben Polasek, an Ohio wheat farmer who owns five parcels on the pipeline’s path. “It’s all about how quickly they can get that pipe in the ground.”
Energy Transfer’s parent company, Energy Transfer Equity, has one of the highest incident rates for oil pipelines among the top operators, according to a Bloomberg analysis of data from the Pipeline and Hazardous Materials Safety Administration.
Energy Transfer said it was cooperating with regulators. But according to the director of the Ohio EPA, Craig Butler, the company had rebuffed efforts to settle violations and refused to pay $700,000 in civil penalties the agency had levied. The agency has since raised the fines to $914,000.