Toughening its enforcement of environmental infractions on large completed natural gas pipelines during construction, the Federal Energy Regulatory Commission said Dec. 16 it will propose $40 million in civil penalties against Energy Transfer Partners LP and its Rover Pipeline LLC unit for both intentional and inadvertent discharge of diesel fuel and other toxics during drilling of the Rover pipeline in Ohio.

FERC also said it is weighing a penalty against Midship pipeline in Oklahoma and a unit of owner Cheniere Energy Inc. for impacts from construction debris left behind on private land. Both line owners must demonstrate to FERC why they should not be fined. 

Agency Commissioner Alison Clements said the environmental violations by Energy Transfer and Cheniere do not represent standard industry behavior but should motivate sector firms to help identify reforms that would build confidence in in FERC’s “decisionmaking and compliance oversight.”

Related to Rover, a 711-mile, $4.2-billion line (see map) that was fully commissioned in 2018, FERC alleged it “intentionally and routinely” discharged unapproved diesel fuel and other toxics with drilling mud during drilling under the Tuscarawas River in Ohio. A second violation involved the 2017 inadvertent release of two million gallons of diesel-tainted drill mud into a protected wetland. 

FERC did not propose a fine against, nor identfiy, any project contractor or subcontractor. 

In a statement, Energy Transfer cited “no evidence to show" that it or its Rover unit "had any knowledge of, or involvement in this action.” The firm says it  learned months later that a “rogue employee” of the unidentified drilling subcontractor "admitted under oath to the discharge on his own volition and then tried to hide it."

The energy firm says the area has been restored to a “pristine condition” and that it will seek recovery from the contractor for any FERC fine.

FERC also ordered the Midship line and equity owner Cheniere Energy to explain to the agency why its also unidentified contractor has not removed construction debris from private land along the 36-in. line’s 234-mile route. The agency said its enforcement office will further investigate and recommend penalties if necessary.

A Cheniere statement said the firm “has dedicated tremendous resources to restoration efforts and welcomes continued engagement with FERC and all stakeholders.”

New Approval Debate

At the meeting, commissioners debated FERC's changing role in energy infrastructure approval, particularly under Chairman Richard Glick (D), elevated to that rop role this year by President Joe Biden.

Clements, another Democrat, told fellow commissioners and others that "to address the challenges ahead, we need to stop debating whether change is necessary and take the forward-looking steps required to meet our statutory obligations.” 

FERC opened in February a review of its 1999 pipeline certification policy that includes need for new agency analysis of how pipeline and LNG project emissions contribute to climate change and whether projects should include mitigation steps to win approval, said Clements. 

But Mark Christie, a Republican commissioner, raised concern that the added analysis will delay projects. and that commissioners "have to face the reality that the need for gas-fired generation is not going to go away next month, next year, or in the short term. It is not.”

Sen. John Barrasso, (R, Wyo.). ranking member of the Senate Energy and Natural Resources committee, said in a December 15 letter to FERC that delays and uncertainty associated with applications to build new pipelines have “contributed to the cancellation” of projects. He did not name the projects, but said it has “shaken customers’ and investors' confidence” necessary for pipeline development.

Glick said FERC will remain vigilant in ensuring that holders of a "certificate of public convenience" to build pipelines on non-federally-owned or managed land are in full compliance with every condition of their certificates.

Clements noted that two pipeline projects, PennEast in New Jersey and Jordan Cove LNG and pipeline in Oregon, are examples of growing skepticism that some states, landowners and citizens have toward proposed new natural gas projects.

Both had been approved by FERC, but neither were able to gain state permits to move forward and were recently cancelled by their developers..

The agency revoked their permits at its Dec. 16 meeting.