Rover Natural Gas Pipeline Still Dogged by Environmental Issues

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Researched by Industrial Info Resources (Sugar Land, Texas)-- Environmental regulatory issues continue to plague the Rover natural gas pipeline project in the upper Midwest. The Federal Energy Regulatory Commission (FERC) last week reminded the project developers that they still need to show they are working to clean up drilling mud spills in Ohio and remediate the sites before more drilling work will be allowed to proceed; and Ohio's environmental regulators want the state's attorney general to file civil action against the developers.

Energy Transfer Partners' (NYSE:ETP) (Houston, Texas) $4.2 billion Rover Pipeline is designed to transfer up to 3.25 billion cubic feet per day about 710 miles from the Marcellus and Utica areas to markets in the Midwest, Northeast, East Coast, Gulf Coast and Canada, with direct deliveries to Ohio, West Virginia, Michigan, and into the Dawn Hub in Ontario, Canada, which has a broader network of distribution points back into the U.S. Construction began shortly after FERC gave its conditional approval, with a targeted in-service date this year for Phase I. For more information, see Industrial Info's project reports on the Ohio, Michigan and West Virginia portions of the pipeline.

Problems arose in April as a result of a 2 million-gallon spill of bentonite-based drilling fluid over 6.5 acres of wetland in Ohio. The spill occurred while Energy Transfer's Rover Pipeline LLC was performing horizontal directional drilling (HDD) under the Tuscawaras River. FERC ordered a halt to drilling at Rover project sites where drilling has not already commenced. For related information, see May 12, 2017, article - Here's (Drilling) Mud in Your Eye: Regulatory Troubles Not Over for Rover.

FERC issued a letter July 12 last week reminding Rover Pipeline that it must complete rehabilitation and restoration activities in Ohio before FERC lifts its suspension of future HDD activity for the project. FERC said that it was awaiting the findings of a third-party contractor regarding the underlying reasons for the spill.

"I am concerned that the lack of availability of Rover's personnel and its contractors' personnel is delaying our ability to determine the relevant facts," wrote Terry Turpin, director of FERC's Office of Energy Projects. "Your prompt assistance in determining the cause of the drilling mud contamination will allow Commission staff to develop the necessary protocols and consider resumption of HDD activities."

Prior to authorizing future HDD activity, FERC said it "anticipates the development of a set of protocols to prevent future drilling mud contamination."

The project also faces regulatory issues at the state level, where Ohio EPA Director Craig Butler has asked the state's attorney general to pursue civil penalties against Rover Pipeline for violations of state environmental regulations. The state EPA issued a unilateral order on July 7 for Energy Transfer Partners to take several measures to monitor groundwater for potential contamination and submit a wetlands restoration plan.

In a press conference last week, Butler said that his agency has tried without success to negotiate with Rover Pipeline to resolve past environmental violations.

"It is very infrequently that you get a company that frankly reacts the way that Energy Transfer Partners has to us--which is basically a stiff arm to the state of Ohio, saying, 'We don't care what problems we cause. We're just marching across Ohio, and we are not really concerned about the environmental impact," Butler said to WOSU Radio last week.

Spokespersons for Energy Transfer Partners have said the company was working to resolve the issues, according to local news media accounts.

Things seem to be going better for the project in Michigan, where the state's Department of Environmental Quality has decided construction of the pipeline may proceed, despite the opposition of residents in two counties that lie in its path, according to local news media accounts.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.