The Pennsylvania Public Utility Commission (PUC) on Thursday said Sunoco Pipeline LP’s Mariner East (ME) 1 could restart natural gas liquids (NGL) service after it was suspended again last month, but commissioners upheld a stay on construction of the ME 2 and 2X projects until they have more information.
With few NGL takeaway outlets in the Appalachian Basin, the 70,000 b/d pathway for ethane and propane that ME 1 provides is considered crucial, while the other projects also are said to be needed. Service on ME 1 was also suspended by the PUC earlier this year after the Bureau of Investigation and Enforcement (I&E) determined that three sinkholes that had formed near it were a threat. The PUC eventually lifted the order after the I&E was satisfied by the surveys, analysis and corrective actions undertaken by Sunoco.
Counting both suspensions, ME 1 has been offline for nearly three months this year.
“Upon review of the record in this matter, I do not believe the integrity of ME 1 remains at issue as Sunoco performed all of the necessary steps as directed in that matter to the satisfaction of our Bureau of Investigation and Enforcement,” Chairman Gladys Brown said during a hearing, referring to the first suspension and the work that went into reversing it.
The ME project has experienced significant delays, hit regulatory snags and was even ordered by the state Department of Environmental Protection (DEP) earlier this year to pay $12.6 million in fines for dozens of spills and violations during the construction of ME 2 and 2X. Despite such mishaps, Brown said there is no “new credible evidence to support a finding that the continued operation of ME 1 poses a clear and present danger to life or property in West White Township.”
Administrative Law Judge Elizabeth Barnes ordered the latest halt to operations and construction in response to a complaint from state Sen. Andrew Dinniman, which was filed after the sinkholes were discovered in a residential area in West Whiteland.
Dinniman, who represents citizens in Chester County living near the ME right-of-way that have staunchly opposed the project, sought to stop construction and clarify the role that the PUC should play in the installation and safety of such pipelines. Barnes granted an interim emergency order to halt activity while the broader complaint is pending.
The PUC, however, gave Sunoco 20 days to provide inspection and testing protocols, an emergency response plan and the safety training curriculum it uses for employees and contractors. Sunoco must also file the permission it receives from the DEP to continue with construction in West Whiteland. The commission would then review all of that information so it can make a decision about the status of ME 2 and 2X construction.
“We are concerned that upholding other aspects of the administrative law judge’s order does not follow applicable law and if not corrected brings uncertainty to Pennsylvania's entire regulatory environment,” said spokeswoman Lisa Dillinger, of Sunoco’s parent Energy Transfer Partners LP. “This can only be seen as an inherently political decision as Sen. Dinniman does not have legal standing to bring this suit in his political capacity,” she said, adding that the company is considering its legal options to ensure ME 2 stays on schedule for service in 3Q2018.
Barnes’ order lays out a litany of conditions Sunoco has to meet in order to resume activity. The PUC decided on Thursday not to address many of those, such as requirements for additional geophysical and geotechnical testing and a another that the company provide training and education to first responders. Instead, Brown said the commission would review those matters during proceedings for Dinniman’s complaint.
The commission voted 3-2 to allow ME 1 to resume operations and uphold the construction stay. Commissioners John Coleman, Jr. and Norman Kennard dissented with the decision to prevent construction from resuming, saying Dinniman failed to prove an immediate safety threat.
“To date, the commission’s pipeline safety experts have not reported any safety issues that warrant halting the construction of ME 2 and 2X,” Coleman said at the hearing.
ME 2, which is nearly complete, and 2X would run parallel along the same route as ME 1 to move ethane, butane and propane from processing facilities in Ohio, Pennsylvania and West Virginia to the Marcus Industrial Complex near Philadelphia. The work stoppage in West Whiteland impacts a 3.5 mile segment, while construction continues on other parts of the system.