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Federal, state agencies probing Shell’s Falcon ethane pipeline after whistleblowers’ allegations

Federal, state agencies probing Shell’s Falcon ethane pipeline after whistleblowers’ allegations

Early last year, Penn­syl­va­nia’s top en­vi­ron­men­tal of­fi­cial tried to raise an alarm at the high­est level of the fed­eral agency re­spon­si­ble for pipe­line safety.

“I write to you re­gard­ing a very se­ri­ous pub­lic safety mat­ter for Penn­syl­va­nia,” the let­ter from Patrick McDon­nell, sec­re­tary of Penn­syl­va­nia’s Depart­ment of En­vi­ron­men­tal Pro­tec­tion, be­gan.

The DEP, he said, had cred­i­ble in­for­ma­tion that some sec­tions of Shell Pipe­line’s Fal­con proj­ect “may have been con­structed with de­fec­tive cor­ro­sion coat­ing pro­tec­tion.”

He also men­tioned wit­nesses with “first-hand knowl­edge of bad cor­ro­sion coat­ings, fal­si­fi­ca­tion of records and re­ports, re­tal­ia­tory fir­ings and other ac­tions by Shell.”

A coat­ing pro­tects the metal pipe­line from be­ing ex­posed to el­e­ments that can cause it to cor­rode. Cor­ro­sion doesn’t typ­i­cally oc­cur early in the pipe­line’s life, but is a lead­ing cause of rup­tures in older pipe­lines.

“These are very se­ri­ous al­le­ga­tions, they de­serve thor­ough in­ves­ti­ga­tion and ap­pro­pri­ate res­o­lu­tion,” Mr. McDon­nell stressed to Howard El­li­ott, ad­min­is­tra­tor of the Pipe­line and Hazard­ous Ma­teri­als Safety Ad­min­is­tra­tion.

Also cop­ied were then-Sec­re­tary of Trans­por­ta­tion Elaine Chao and mem­bers of Con­gress with over­sight of trans­por­ta­tion com­mit­tees.

That Feb­ru­ary day in 2020, the warn­ings about Shell’s Fal­con eth­ane pipe­line — a 98-mile link be­tween gas pro­cess­ing plants in Ohio and Washington County and the huge petro­chem­i­cal com­plex that Royal Dutch Shell is build­ing in Beaver County — had come full cir­cle.

It was, in fact, PHMSA that re­ceived in­tel­li­gence from a whis­tle­blower in early 2019 with con­cerns about how the proj­ect was be­ing han­dled. The fed­eral agency over­sees the in­stal­la­tion and op­er­a­tion of pipe­lines, not en­vi­ron­men­tal mat­ters. So when it came across con­cerns of po­ten­tial un­der­re­p­ort­ing of drill­ing mud spills on the pipe­line, PHMSA sent that in­for­ma­tion to the DEP.

For months, the two agen­cies ex­changed in­for­ma­tion. The DEP, alarmed about what it was find­ing, had also started to loop in in­ves­ti­ga­tors from the Penn­syl­va­nia at­tor­ney gen­eral’s of­fice. It briefed of­fi­cials at the U.S. En­vi­ron­men­tal Pro­tec­tion Agency and made con­tact with the U.S. Oc­cu­pa­tional Safety and Health Ad­min­is­tra­tion, which was also con­tacted by a whis­tle­blower on the Fal­con proj­ect.

As late as Jan­u­ary 2020, DEP in­ves­ti­ga­tors were email­ing with the head of safety at PHMSA about the Fal­con pipe­line, while at the same time send­ing the lan­guage of Mr. McDon­nell’s let­ter to PHMSA’s head to var­i­ous DEP law­yers for re­view.

What Mr. McDon­nell was say­ing — that a PHMSA in­quiry into po­ten­tial cor­ro­sion de­fects was “in­com­plete” and urg­ing the agency to take a more se­ri­ous look at the is­sue, while es­sen­tially copy­ing its su­pe­ri­ors on the note — was a se­ri­ous ac­tion.

DEP spokes­man Neil Shader said Tues­day that the DEP be­lieves PHMSA had “taken these con­cerns se­ri­ously.”

PHMSA con­firmed that its in­ves­ti­ga­tion into the proj­ect was on­go­ing. “We looked into the con­cerns raised by the DEP but the re­sults are not yet avail­able,” the agency said.

Even to­day, as the pipe­line is al­ready com­pleted, bur­ied and wait­ing for the Shell petro­chem­i­cal plant to be­come op­er­a­tional some­time in 2022, the DEP’s in­ves­ti­ga­tion of the Fal­con proj­ect con­tin­ues.

The state at­tor­ney gen­eral’s of­fice de­clined to com­ment. An OSHA com­plaint by a whis­tle­blower fired from the Fal­con proj­ect by one of its con­trac­tors was dis­missed March 1, the agency con­firmed.

Is­sues on the pipe­line

A spokes­man for Shell Pipe­line said PHMSA of­fi­cials “con­ducted three on-site au­dits of the Fal­con Pipe­line and found no is­sues with in­stalled coat­ings.”

The com­pany also listed steps it took to pre­vent cor­ro­sion. Since the pipe­line was in­stalled, Shell said, it had com­pleted “100% post-in­stal­la­tion in­spec­tions of all welds,” pres­sure-tested the pipe­line and con­ducted an in­line in­spec­tion, the re­sults of which were shared with PHMSA.

The com­pany also stressed that it went be­yond re­quire­ments on the proj­ect by us­ing thicker pipe, bury­ing it a foot deeper than fed­er­ally man­dated, and in­stall­ing more emer­gency shut­off valves than nec­es­sary.

“We be­lieve we have demon­strated an un­wav­er­ing com­mit­ment to safe con­struc­tion and op­er­a­tions through the ro­bust de­sign and in­stal­la­tion of the Fal­con Pipe­line,” the com­pany said.

Asked about the var­i­ous in­ves­ti­ga­tions into the pipe­line, Shell re­plied that “as with all ma­jor con­struc­tion proj­ects, gov­ern­ment and reg­u­la­tory agen­cies have been pro­vid­ing over­sight through­out the con­struc­tion pro­cess.”

Notices of vi­o­la­tion

Lit­tle is known about the scope of the DEP’s find­ings. Mr. McDon­nell’s let­ter to PHMSA was one of a hand­ful of doc­u­ments that sur­faced af­ter the en­vi­ron­men­tal ad­vo­cacy group FracTracker Al­liance re­quested pub­lic records re­lated to the agency’s in­ves­ti­ga­tion.

A log of 111 doc­u­ments that were not re­leased, how­ever, sug­gests the DEP was in con­tact with at least two con­fi­den­tial in­for­mants, had ac­cess to pho­tos and notes from the pipe­line job, and fol­lowed up with other agen­cies to see how their in­ves­ti­ga­tions were pro­gress­ing.

Within its own ju­ris­dic­tion, the DEP is­sued sev­eral no­tices of vi­o­la­tion to Shell Pipe­line.

In July 2019, the proj­ect was cited for un­sta­ble soil and other ero­sion con­trol vi­o­la­tions. A few months later, an 800-gal­lon spill of drill­ing mud im­pacted a wet­land.

In No­vem­ber 2019, the DEP asked Shell Pipe­line to stop all un­der­ground drill­ing work af­ter learn­ing that the com­pany wasn’t us­ing in­stru­ments to mon­i­tor and record how those drill­ing jobs were go­ing in real time, as per its per­mit.

The in­for­ma­tion was use­ful to doc­u­ment and mit­i­gate an in­ad­ver­tent re­turn, a spill or an un­in­tended sur­fac­ing of mud that’s pumped un­der­ground to drill a tun­nel for the pipe­line.

Such spills are com­mon when pipe­lines are laid through the hor­i­zon­tal di­rec­tional drill­ing method, which is used when dig­ging a trench is not pos­si­ble or un­de­sir­able.

Energy Trans­fer Co., a Texas-based driller that built the Mari­ner East pipe­lines across the south­ern part of Penn­syl­va­nia, had hun­dreds of in­ad­ver­tent re­turns that sig­nifi­cantly slowed the proj­ect and gave reg­u­la­tors a crash course in this kind of pipe­line con­struc­tion.

From doc­u­ments ob­tained by FracTracker, it seems the DEP was con­cerned that Shell was not al­ways forth­com­ing about such spills.

Anya Litvak: [email protected]

First Published March 17, 2021, 9:00am



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