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FERC Launches Probe Into Rover Pipeline Spill After Diesel Fuel Detected in Drilling Mud

FERC said its Office of Enforcement (OE) will immediately launch an investigation into Rover Pipeline LLC's spillage of drilling fluid into Ohio wetlands, after state regulators found traces of diesel fuel in drilling mud samples taken from the mid-April incident.

In a letter to Rover on Thursday, Terry Turpin, director of the Office of Energy Projects (OEP) at the Federal Energy Regulatory Commission, said the OE would launch the probe based on samples collected in late May by the Ohio Environmental Protection Agency from wetlands near the Tuscarawas River in Stark County.

"While the Ohio EPA has concluded that the diesel fuel contamination does not constitute an imminent threat to human health and the environment, there are nevertheless still concerns regarding the potential long-term environmental impacts resulting from the presence of the diesel fuel," Turpin told Joey Mahmoud, senior vice president at Rover. The probe by OE would "determine the underlying facts that led to the presence of petroleum hydrocarbons in the drilling fluid."

Turpin said FERC staff is continuing a separate investigation into the actual cause of the spill.

Rover filed incident reports with FERC [CP15-93] on April 15, stating that drilling mud was inadvertently released during horizontal directional drilling (HDD) activities from the pipeline's construction. The incident caused about 2 million gallons of bentonite-based drilling fluid to spill into a state-designated wetland.

In a separate joint statement on Thursday, FERC's two commissioners said they were "troubled" by the discovery and said the OEP and OE would closely monitor the pipeline's progress going forward. They added that they expect Rover and its parent company, Energy Transfer Partners LP (ETP), to mitigate the potential impacts from the spill and cooperate with a FERC probe into its cause.

"We are troubled by the Tuscarawas River HDD spill and the indications that diesel fuel is present in the drilling mud utilized for the Tuscarawas River HDD," wrote Acting FERC Chairman Cheryl LaFleur and Commissioner Colette Honorable. "Although we have no reason at this point to believe the release represents an imminent threat to human health or the environment, this incident raises concerns about potential long-term environmental impacts, including impacts on sensitive wetlands in Ohio."

LaFleur and Honorable added that the presence of diesel fuel, found in samples collected by the Ohio EPA, "is inconsistent with the commitments made by Rover on which the Commission relied to certificate its project...

"Going forward, we expect that Rover will act consistently with its commitments in the certificate order and will undertake the future actions directed by Commission staff to mitigate the potential impacts caused by any introduction of diesel fuel into its drilling mud, however it might have occurred."

In a note to clients Thursday, ClearView Energy Partners LLC said it was unclear what would happen with the project going forward.

"Whether OEP will lift the hiatus of HDD activities before the formal investigation concludes (it appears to be moving in parallel) is unclear," said ClearView Managing Director Christi Tezak. "At this time, we are not expecting a full halt on construction operations, given potential environmental risks associated with halting in-process construction activities, but we also cannot rule it out entirely."

Tezak added that the Ohio EPA may require Rover to remediate the spill, pay civil penalties and/or conduct environmental mitigation.

FERC ordered Rover to suspend all new HDD work for the pipeline on May 10, pending a third-party review of the spill. In late May, the Commission denied a request by Rover to finish HDD activities at two sites critical to laterals in Ohio and West Virginia.

Rover, a 710-mile 3.25 Bcf/d pipeline project designed to connect Marcellus and Utica shale gas to markets in the Midwest and Gulf Coast, was originally scheduled to come online in two phases this year. Phase 1 to the Midwest Hub in Defiance, OH, was scheduled for service in July, while Phase 2, connecting to the Vector Pipeline in Michigan and the Dawn Hub in Ontario, was scheduled to come online in November.

Last week, ETP said a portion of Phase 1remains on schedule and would come online in early July, with the remaining portion of the first phase coming online within 60 days, or by late July. ETP said Phase 2 remains on track, with an in-service date of Nov. 1.

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