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Pennsylvania Fines Sunoco 'Historic' $12.6M, Allows ME2 Construction to Restart

The Pennsylvania Department of Environmental Protection (DEP) has slapped Sunoco Pipeline LP with a “historic” $12.6 million fine to resolve dozens of violations related to the company’s Mariner East 2 (ME2) pipeline project, which has also been cleared to restart construction that was suspended early last month.

The DEP approved Sunoco’s revised operations plan, which sets forth additional measures and controls that Sunoco will put in place to ensure the conditions of its permits are met and to minimize inadvertent returns and water supply incidents that have plagued the project.

Early last month, the DEP said it had no choice but to suspend some of Sunoco’s permits and stop nearly all construction activities in response to more than 30 separate violation notices and more than 100 inadvertent returns of drilling mud, fluids and other substances that have occured over the last year or so.

A permit suspension, DEP said, is one of the most significant penalties it can levy. Secretary Patrick McDonnell said the agency has “consistently held” Sunoco to the “highest standard possible” throughout development of ME2. He added that Thursday’s announcement is “by no means the end” of DEP’s oversight.

“Since the permit suspension over a month ago, Sunoco has demonstrated that it has taken steps to ensure the company will conduct the remaining pipeline construction activities in accordance with the law and permit conditions, and will be allowed to resume,” McDonnell said. “DEP will be monitoring activities closely to ensure that Sunoco is meeting the terms of this agreement and its permits.”

Sunoco entered a consent order and agreement (COA) with DEP to pay the fine and resolve the violations. The fine is one of the largest, if not the largest, ever levied by the DEP against an oil and gas operator. Agency spokesman Neil Shader said DEP doesn't keep those kinds of records.

“It is certainly one of the largest penalties collected in a single settlement,” he added. 

Sunoco also filed an appeal with the state Environmental Hearing Board of the DEP order that halted construction. As part of the COA, that appeal is to be withdrawn, the agency said. 

“While we strongly disagree with their legal conclusions that our conduct was willful or egregious, we felt it was important to our unitholders and to the Commonwealth of Pennsylvania that we move forward rather than engage in continued litigation,” said Sunoco spokesman Jeffrey Sheridan.

He said mainline construction is 93% complete and horizontal directional drilling (HDD) is 64% complete. With the suspension lifted, Sheridan noted that thousands of workers would be back on the job.

Since the state approved construction of ME2 early last year, the project has drawn the ire of environmental and citizen advocacy organizations. Their anger was stoked further last summer, when more than a dozen families in Chester County reported losing water pressure and murky water where HDD for the pipeline was underway. The problems persisted along the route as construction continued.

Some HDD operations were halted over the summer in response to an abnormal amount of inadvertent returns. The company eventually reached a settlement with environmental groups requiring additional safeguards that were eventually violated. Those transgressions factored into DEP’s January order to suspend construction.

Food & Water Watch issued a statement on Thursday criticizing Gov. Tom Wolf’s administration for again allowing the project to move forward and saying of the COA that “this outrageous deal sacrifices the health and safety of Pennsylvanians for mere pocket change from Sunoco.”

The 350-mile ME2 would transport natural gas liquids from processing facilities in Ohio, Pennsylvania and West Virginia to the Marcus Hook Industrial Complex near Philadelphia for domestic and international distribution.

The project, which has long been billed as a key to unleashing more Appalachian liquids, was initially scheduled to enter service in late 2016. But ongoing regulatory setbacks have led to repeated delays. Late last year, Sunoco parent Energy Transfer Partners LP said ME2 would enter service in 2Q2018 instead of coming online in phases beginning in 2017.

The $12.6 million penalty, DEP said, would go to the state’s Clean Water Fund and the Dams and Encroachment Fund.  

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