Pennsylvania regulators have once again halted Mariner East (ME) 1 operations just weeks after a similar suspension was lifted, this time granting an emergency order that lays out a laundry list of requirements that Energy Transfer Partners LP subsidiary Sunoco Pipeline must meet before natural gas liquids (NGL) can resume moving on the system.
The order also stops construction on both ME 2 and ME 2X in West Whiteland Township. State Sen. Andrew Dinniman filed a complaint last month with the Pennsylvania Public Utility Commission (PUC) seeking the emergency order and questioning the safety of the entire system.
The complaint was filed partly in response to a PUC order in March that shut down ME 1 after three sinkholes formed near it in West Whiteland. That order was lifted earlier this month, when operations resumed.
Dinniman, a Democrat, has been a vocal critic of the ME project. He represents citizens in Chester County living near the sinkholes, who have also voiced concerns about the proximity of all three pipelines to area homes. Despite a review of ME 1’s integrity and geophysical testing in the construction area where ME 2 and 2X are being built along the same right-of-way, Dinniman has argued that the geology in the area is hazardous for such infrastructure.
It’s unclear how long operations may be suspended. PUC spokesman Nils Hagen Frederiksen said emergency orders are effective immediately and require no ratification vote from the full commission. Any challenge to Administrative Law Judge Elizabeth Barnes’ order, he said, must be filed within seven days and would go straight to the full commission for its consideration. Sunoco said it would “pursue all legal remedies to overturn the order,” including an appeal with the PUC.
In addition to the ME 1 suspension and work stoppage on ME 2 and 2X, the order requires a full suite of actions be taken by Sunoco. Among other things, Sunoco would be required to provide a full assessment of the condition of all three pipelines; submitting an emergency response plan, additional geophysical and geotechnical studies of ME 2 and 2X in West Whiteland; creating a public integrity management program and risk analysis; and require the operator to address its willingness to provide specialized equipment to area first responders to help them deal with any potential disasters created by the system.
Earlier this month, Sunoco moved to dismiss Dinniman’s complaint, arguing he does not have standing. Barnes denied the motion.
“We strongly disagree with Judge Barnes’ order and believe there is no evidence or legal basis to support Sen. Dinniman’s claims in his petition and the order that followed,” Sunoco said Thursday. “Further, the order directly contradicts the detailed work of PUC staff and the May 3, 2018 unanimous decision of PUC commissioners to return ME 1 to service.”
The company said it would continue with the construction of ME 2 and 2X in all areas along the route except for the 3.5-mile segment that runs through West Whiteland.
Environmental groups and area residents in Chester County, in the southeast part of the state near Philadelphia where unconventional natural gas development does not occur and has faced more resistance, have rallied against the project for months.
“Sunoco’s reckless and dangerous construction poses a threat to communities across Pennsylvania,” said Food & Water Watch organizer Sam Rubin. The latest decision “gives hope to the communities along the pipeline route who have demanded protection from Sunoco’s dangerous and unnecessary pipeline.”
ME 1 moves ethane and propane from the shale fields of western Pennsylvania to the Marcus Hook Industrial Complex near Philadelphia. ME 2 and 2X would run parallel along the same route for about 350 miles to move ethane, butane and propane from processing facilities in Ohio, Pennsylvania and West Virginia to Marcus Hook. ME 2, which is nearly complete, has already experienced several delays. Earlier this month, Energy Transfer again pushed back the in-service date from 2Q2018 to 3Q2018.
The previous ME 1 outage had limited impacts on producers that managed to find workarounds during the suspension. But there are limited NGL takeaway outlets available to serve the Appalachian Basin, making the ME project crucial to operators.
East Daley Capital Advisors Inc.’s Andy Ptacek, who directs research, told NGI’s Shale Daily on Thursday that he expects lower netback prices for Appalachian producers until ME 2 comes online, particularly this summer as operators continue to ramp up liquids production in the basin on stronger commodity prices.