An affiliate of Energy Transfer LP (ET) has agreed to pay a $30.6 million fine related to a 2018 natural gas pipeline explosion in Western Pennsylvania, and it reached a deal with regulators to lift a nearly year-old suspension of regulatory reviews for all the projects in the state.
The Pennsylvania Department of Environmental Protection (DEP) called the fine “historic” and said it is one of the largest civil penalties ever collected in the state in a single settlement. The agency in 2018 also called it historic when it took in $12.6 million to resolve violations related to constructing the Mariner East (ME) 2 pipeline, another ET project.
ET affiliate ETC Northeast Pipeline LLC signed a consent order and agreement (COA) to pay the latest penalty for violations related to the explosion of the Revolution Pipeline in Beaver County’s Center Township. A landslide caused the pipeline to separate and explode in September 2018, which scorched nearby forested areas, destroyed a home, barn and vehicles, and caused six high voltage electric transmission towers to collapse. There were no injuries.
Revolution, a 100-mile system that moves 400 MMcf/d in the state from Butler County to Washington County, has been offline since the explosion. Pennsylvania producer PennEnergy Resources LLC has said the outage has cost it revenue, and EdgeMarc Energy LLC cited the blast in its bankruptcy filing.
The COA also allows ET to resume work on Revolution and other major projects, such as the ME system, that was halted after the DEP suspended regulatory reviews last February. At that time, regulators put a hold on pending permits for what they said was ETC’s failure to comply with an October 2018 order to stabilize and repair erosion controls in the area of the Revolution blast.
ET welcomed the COA shortly after it was announced late Friday, saying “this has been a thorough and detailed process that involved a great deal of analysis.” Spokesperson Lisa Coleman said ET would “mobilize the necessary resources” to complete projects as its permits are approved.
Under the COA, $28.6 million would go to the state’s Oil and Gas Program Fund and Clean Water Fund to help strengthen DEP’s energy industry oversight and fund water remediation projects. The other $2 million is to go toward a state-approved environmental project.
As it struggled with terrain in the area of the blast, ETC last year hired a new management team and consultants to address outstanding regulatory issues. Last month, DEP approved an implementation schedule, a temporary slope stabilization plan and a landslide hazard evaluation, among other things. The COA also requires ETC to restore and mitigate stream and wetland impacts that occurred during construction of the pipeline and to permanently stabilize all areas along the pipeline corridor.
Now that DEP is lifting the permit suspension, work can resume on Revolution. The halt also impacted some work on ME, which has been plagued by regulatory and legal issues, as well as subsidence problems and strong opposition in some parts of the state. ME 2X is nearly complete. Along with ME 1 and 2, the system moves natural gas liquids from Ohio, Pennsylvania and West Virginia to the Marcus Hook Industrial Complex near Philadelphia.
ME 1 and 2 are now in full service. With the suspension lifted, Coleman said the company now expects to receive the remaining clearances it needs to finish construction on ME 2X, the system’s third pipeline, which is expected to be completed by mid-2020.
“We remain committed to adhering to the rules and regulations specified in the approved permits as we complete the construction and restoration phases of these projects,” ET said.
DEP said additional work on Revolution would occur in the coming months, noting that ETC has agreed to let the agency know where and when it will finish that work so regulators can oversee it.
“DEP will continue to carefully monitor ETC’s activities to ensure that ETC meets the terms of this agreement and all approved permits,” agency Secretary Patrick McDonnell said. “The conditions imposed by this agreement seek to ensure that ETC will get this right. Anything less is unacceptable.”
In unrelated news, ET said Friday former Department of Energy Secretary Rick Perry would rejoin the board of general partner LE GP LLC. Perry stepped down at DOE about a month ago. He previously joined the ET board after his tenure as the governor of Texas ended in 2015, but relinquished the position prior to taking the helm at DOE in 2017.