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FERC to Rover: Spill Clean-Up Required Before In-Service Authorization

Energy Transfer Partners LP’s (ETP) Rover Pipeline LLC has to complete several "activities regarding rehabilitation and restoration of areas affected by the project" before it is given authorization to enter service, FERC staff told the pipeline Wednesday.

In a letter to Rover Senior Vice President Joey Mahmoud, the Federal Energy Regulatory Commission's Office of Energy Projects (OEP) said authorization for in-service of Mainline A -- part of the initial start-up ETP has said it expects to begin this month -- would be contingent on a list of clean-up efforts that mainly address an April drilling fluids spill near the Tuscarawas River in Stark County, OH.

The Tuscarawas spill -- an estimated 2 million gallon release of drilling mud from a Rover horizontal directional drill (HDD) site -- was the catalyst behind a May order from FERC suspending all new HDD activities for the project pending an independent review. After subsequent tests indicated the presence of diesel in the spilled drilling fluid at the Tuscarawas HDD -- a potential violation of Rover's certificate -- FERC said it would be launching an enforcement investigation of the incident.

"Initiation of future HDD activities...remains suspended at this time," OEP Director Terry Turpin wrote Wednesday. "I note that Commission staff continue to review the underlying reasons for" the Tuscarawas HDD spill, "as well as the presence of petroleum hydrocarbons in the drilling fluid at that site. Work has been progressing on the review undertaken by our third party contractor regarding additional measures to prevent further inadvertent releases.”

Before authorizing ETP/Rover to resume HDD activities for the project, Turpin said FERC "anticipates the development of a set of protocols to prevent future drilling mud contamination. To that end, it is important that Commission staff gain at least a preliminary understanding of the underlying causes for the presence of petroleum hydrocarbons in the drilling fluid...I am concerned that the lack of availability of Rover's personnel and its contractors' personnel is delaying our ability to determine the relevant facts,” he wrote.

"Your prompt assistance in determining the cause of the drilling mud contamination will allow Commission staff to develop the necessary protocols and consider resumption of HDD activities."

Turpin said that to receive in-service authorization for Rover's Mainline A, which would connect producing areas of Ohio, West Virginia and Pennsylvania with the Midwest Hub in Defiance, OH, ETP/Rover needs to:

  • Remove and dispose of "all drilling mud and drill cuttings with the presence of petroleum hydrocarbons from the Oster Sand and Gravel Disposal Pit and the Beach City Quarry" to a solid waste disposal site approved by the Ohio Environmental Protection Agency (Ohio EPA);
  • Remove and dispose of all drilling mud and mud and drill cuttings from the Tuscarawas HDD site to an Ohio EPA-approved disposal site;
  • Develop an OEP-approved remediation and restoration plan for the Tuscarawas River wetland; and
  • Develop a water quality monitoring program -- also requiring OEP approval -- "for water wells in the vicinity of the Tuscarawas River HDD site, the Oster Sand and Gravel Disposal Pit and the Beach City Quarry…”

The program needs to include residential and public water supply monitoring for two years or more if it is determined that contamination is present. Rover also would be required to prepare quarterly reports regarding the results of the monitoring program and file them with FERC. Commission staff and Ohio EPA "may require additional mitigation and remediation for any contamination detected."

Rover, a 710-mile, 3.25 Bcf/d Appalachian takeaway mega-project, is scheduled to enter service in phases this year.

Phase 1, including service to the Midwest Hub, was originally scheduled to come online this month but was later split into two parts, likely a result of an uncompleted HDD crossing for the Clarington Lateral that remains suspended by FERC's order. ETP recently said it expects a section from Cadiz, OH, to Defiance, OH, which would ostensibly include Mainline A, to be in service this month.

The timing of the rest of Phase 1 is contingent on FERC lifting the HDD moratorium, according to analysts.

Genscape Inc. has estimated that the first part of Phase 1 could be delayed until August, with the rest of Phase 1 pushed back to September.

"Our estimated dates will be unchanged by these stated measures for the moment," Genscape analyst Colette Breshears told NGI Wednesday. "We were looking at an August date for interim service for Phase 1 already, and the requirement for cleaning the quarries adds confidence to that outlook. Full service for Phase 1 (and eventually, Phase 2) is dependent on HDD resumption timelines.

"Our optimistic view of Rover receiving HDD permissions sometime this week or next is looking shaky, especially considering" FERC's statement that the lack of availability of Rover personnel and contractors has delayed its fact-finding efforts.

ETP has said recently that it expects Rover’s Phase 2, which would include the full project route and extend service to markets in Michigan and the Dawn Hub in Ontario, to be in service by November.

The Tuscarawas HDD spill, which reportedly took place over a period of almost three weeks, is not the first environmental impact incident involving Rover that has drawn negative attention from FERC.

Before receiving its FERC certificate, Rover acquired and demolished a historic home in Ohio near a proposed compressor station without notifying the Commission ahead of time. FERC addressed the incident as a potential violation of federal historic preservation laws and denied Rover's application for a blanket certificate authorizing routine construction activities as a de facto sanction.

FERC wrote in February -- two months before the Tuscarawas spill -- that Rover’s actions to that point raised "the question of whether Rover would fully comply with our environmental regulations in future construction activities under a blanket certificate."

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