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Q&A: Federal pipeline regulator fines Energy Transfer $40M, blamed “corporate culture” for large spill into Ohio wetland


The Federal Energy Regulatory Commission issued a $40 million fine to Texas-based energy transfer for a drilling mud spill in the eastern part of the state in 2017. The spill was connected to the company’s Rover pipeline, which carries natural gas liquids from Pennsylvania and Ohio to Canada.

According to FERC, the spill revealed a “corporate culture that favored speed” over compliance. New details about the spill were first reported by Mike Soraghan of E&E News. He joined Reid Frazier of The Allegheny Front to talk about it.

LISTEN to the interview



ALLEGHENY FRONT: Tell us about the spill and what caused it.

Mike Soraghan: The spill was a couple million gallons of this thick stuff called drilling mud. On its own, it’s not toxic in and of itself. But the crew had been adding diesel fuel, which is kind of a cheat when they’re drilling to ease things. The drill bit, when things are stuck, it’s maybe like pouring a little WD 40 in there. But diesel fuel is toxic. It presents a problem. You’re just not supposed to put diesel fuel in the stuff you’re pumping underground.

When you’re drilling under a river or when you’re drilling a pipeline, you use drilling mud and it is supposed to return back out of the hole you’re drilling. And in this case, it was not circulating back out, which means it’s going somewhere. It’s called an ‘inadvertent return’ or a ‘frack out.’

You’re not supposed to ignore it and let it go for a month, and you’re not supposed to put diesel fuel in it. It either stays in the ground where it can contaminate groundwater and turn it brown or it spurts out somewhere. [FERC’s] allegation is that this crew was just kind of being inattentive and using a cheat. 

Frazier: And how long did this spill go on?

Soraghan: They were not getting returns, which means it was not coming back [out of the well bore] for a month. We don’t really know where it was going.

When someone finally found it, they had a third-party expert come in and estimated that it had been pumping out of the ground, spurting out of the ground in that location for three or four days.

“FERC…concluded that there was a corporate culture here that said the speed justifies the means, that it was all about getting the pipeline done and compliance was pretty much an afterthought.”

And that was another flaw [found by FERC], that [the pipeline company] should have had more inspectors going out and looking [for the drilling mud], especially when you know that you’re pumping stuff underground and it’s not coming back.

Frazier: So the stuff that spilled was drilling mud. What’s so bad about it? 

Soraghan: It’s bentonite, mixed with water. It’s clay. On its own, it isn’t a big deal. You’re supposed to be careful with it. If a little bit comes spurting out in the middle of nowhere it’s not that bad.

If it gets into a stream, it can kill plants and animals and fish and things like that. But when you introduced diesel fuel, that is more toxic and it’s dangerous for people to breathe in. So the damage it caused was in a wetland, so it’s more smothering fish and other critters and diesel fuel just add a level of toxicity. 

Frazier: What does FERC conclude in this report about who was responsible ultimately for this spill? 

Soraghan: The FERC enforcement staff concluded that there was a corporate culture here that said the speed justifies the means, that it was all about getting the pipeline done and compliance was pretty much an afterthought.

That raises the question, if we’re only getting to this for years afterward, what can [FERC] do with a pipeline company, or an oil company that treats compliance as an afterthought?.

Critics are saying this $40 million [fine] on a multibillion-dollar pipeline that’s already brought in more than $1 billion dollars [in revenue] before the fine is even proposed – that [fine is just] a cost of doing business.

Frazier: Energy Transfer is the subject of a criminal investigation by the attorney general of Pennsylvania and over $20 million in fines for the Mariner East pipeline, and owns the Revolution pipeline, which exploded near Pittsburgh in Beaver County about a week after it was first put in service a few years ago. How has the company responded to these charges? 

Soraghan: Their main point is they’re not denying that diesel wound up in the drilling mud, although they did originally. They’re saying that it was a contractor that did it and they can’t be held liable for that. The problem is FERC does not have jurisdiction over those contractors. It only has jurisdiction over its permit holders. 

Mike Soraghan is a reporter with E&E News.

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Read More: Q&A: Federal pipeline regulator fines Energy Transfer $40M, blamed “corporate culture” for large spill into Ohio wetland

2022-04-01 12:36:53

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