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US FERC orders ETP to halt Rover gas pipeline drilling in some areas after spills

Highlights

Days after the Ohio Environmental Protection Agency fined Energy Transfer Partners over alleged water and air pollution violations along the route of its Rover natural gas pipeline, the US Federal Energy Regulatory Commission ordered the company not to conduct any more horizontal directional drilling activities in some areas where it has not commenced work.

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The roughly 500-mile, 3.25 Bcf/d greenfield Rover Pipeline is designed to move Marcellus and Utica shale gas to markets in the Midwest, Gulf Coast and Canada.

Backed almost entirely by Marcellus- and Utica-focused gas producers, the project is expected to impact numerous upstream and downstream markets.

FERC's actions follow two separate and sizable leaks of drilling fluid into Ohio wetlands in April.



The spills, discovered April 13 and 14, both resulted from horizontal directional drilling, or HDD operations, typically performed when traversing beneath a river or other large body of water.

The stoppage enforced by FERC affects HDD in eight out of 30 drilling areas associated with the project, according to a table included in the FERC letter.

It would affect roughly half of the 23 miles of HDD work needed, according to data from Rover's February implementation plan.

Also as a result, no activity associated with HDD crossing may occur on Mainline B of the project, which comprises one of the two parallel, 42-inch diameter pipelines that traverse north-northwest across Ohio.

FERC also required Rover to immediately obtain independent third-party contractor proposals to study drilling activity at the Tuscarawas River further.

The release of drilling fluid during HDD of the Tuscarawas River resulted in about 2 million gallons of bentonite-based drilling fluid spilling into a state-designated category 3 wetland, covering an area of about 6.5 acres and coating wetland soils and vegetation with bentonite clay and bore-hole cuttings, according to a Wednesday letter from Terry Turpin, director of FERC's Office of Energy Projects, to the developer.

Turpin said that, based on drilling logs, returns of drilling mud were absent or intermittent during work in the areas at issue for nearly three weeks.

FERC staff has "serious concerns" about the magnitude of the incident, its environmental impacts, and the "lack of clarity regarding the underlying reasons for its occurrence, and the possibility of future problems," he said.

The contractor study would assess actions taken by Rover and its drilling contractor, and develop a plan for measures to ensure similar problems do not occur on the remaining HDDs during project construction, Turpin said.

FERC staff would have complete control over the scope, content and quality of the contractors' work.

Based on the outcome of the analysis, the matter may also be referred to FERC's enforcement office, he added.

ETP said there has been no change at this point to its construction schedule, which would have the first phase of Rover in service in July and a second phase online in November.

"We have received the letter from the FERC. We continue to work with them and the [Ohio Environmental Protection Agency] on a resolution to this matter," Alexis Daniel, a spokeswoman for ETP, said in an email.

Earlier in May, Ohio asked ETP to pay a fine of over $400,000 for alleged water and air pollution violations, including those associated with the drilling mud releases.

This is not the first time the project's missteps have drawn repercussions from FERC.

In approving the project's certificate order February 2, FERC took action in response to what it called Rover's "intentional demolition" of the 173-year-old Stoneman House in Dennison, Ohio, a property eligible for listing in the National Register of Historic Places that sat across from the site of a proposed compressor station.

At that time, FERC denied a so-called blanket certificate that would have allowed for future modifications and minor construction without additional certificate approvals.

--Maya Weber, maya.weber@spglobal.com
--Eric Brooks, ebrooks@spglobal.com
--Edited by Keiron Greenhalgh, keiron.greenhalgh@spglobal.com