Wednesday, March 28, 2018

Shale Law in the Spotlight: Rover Pipeline Project – An Overview of Status and Current Legal Developments

Written by Chloe Marie – Research Fellow

This article is intended to provide an overview of the current status of the Rover Pipeline project as well as a review of recent legal developments related to construction activities in the project.

Overview of the pipeline project current status

The Rover Pipeline is a 713-mile new project designed to carry 3.25 Bcf per day of natural gas produced from the Marcellus and Utica Shale areas to markets in the Midwest, Northeast, East Coast, Great Lakes, and Gulf Coast regions of the United States as well as Canada. More specifically, 68% of natural gas produced will be shipped to U.S. markets via interconnection points located in West Virginia, eastern Ohio, and Midwest Hub facilities near Defiance, Ohio. The remaining 32% will be sent off to markets in Michigan and on to the Dawn Hub in Ontario, Canada, through the existing Vector pipeline.

Rover Pipeline LLC, a subsidiary of Energy Transfer Partners, is responsible for the construction and operation of the Rover Pipeline. On February 20, 2015, Rover Pipeline LLC filed an application for construction and operation of the Rover Pipeline project pursuant to Section 7(c) of the Natural Gas Act. The Federal Energy Regulatory Commission (FERC) granted such application through the issuance of a Certificate of Public Convenience and Necessity dated February 2, 2017.

In July 2016, FERC released a Final Environmental Impact Statement and concluded that approval of the Rover Pipeline project would create adverse and significant environmental impacts; however, these impacts could be reduced to acceptable levels through the implementation of mitigation measures that were suggested by FERC staff.

Several other permits necessary for the construction and operation of the Rover Pipeline project have been issued by various federal, state, and county agencies including the U.S. Forest Service, U.S. Fish and Wildlife Service, U.S. Army Corps of Engineers, West Virginia Department of Environmental Protection, West Virginia Department of Natural Resources, West Virginia Division of Culture and History, Pennsylvania Department of Environmental Protection, Pennsylvania Department of Conservation and Natural Resources, Pennsylvania Game Commission, Pennsylvania Fish and Boat Commission, Pennsylvania Historical & Museum Commission, Washington County Conservation District, Ohio Department of Environmental Protection, Ohio Department of Natural Resources, Ohio State Historic Preservation Office, Michigan Department of Environmental Quality, Michigan Department of Natural Resources, Michigan State Housing Development Authority, and several County Drain Commissions in Michigan. For more information on these approvals, please see the following link.

According to Rover Pipeline LLC, the Rover Pipeline is expected to be fully operational in the second quarter of 2018; however, recent legal challenges may delay such expectation.

Overview of the current legal developments

On April 13, 2017, Ohio EPA recorded a spill incident that occurred in Stark County, Ohio, resulting from the horizontal directional drilling (HDD) process on the Rover Pipeline project. This incident involved 2 million gallons of bentonite-based drilling fluid spilled into wetlands by the Tuscarawas River. Consequently, in a letter dated May 10, 2017, FERC ordered Rover Pipeline LLC to interrupt further horizontal directional drilling where drilling activity had not yet started. FERC stated that its staff would review Rover Pipeline LLC’s plan of action to prevent further incidents.

On May 26, 2017, Ohio EPA found detectable levels of diesel fuel contamination near the Tuscarawas River. Despite concluding that the diesel fuel contamination did not represent any danger to human health and the environment, Ohio EPA determined that concerns remained over the potential long-term environmental impacts resulting from the presence of the diesel fuel. Therefore, FERC informed Rover Pipeline LLC in a follow-up letter dated June 1, 2017, that it would analyze “the underlying facts that led to the presence of petroleum hydrocarbons in the drilling fluid.” On September 18, 2017, FERC granted permission for Rover Pipeline LLC to resume construction.

On September 22, 2017, Ohio EPA issued a notice of violation #13  reporting another illegal discharge of soap wastewater used in the company’s boring operations into a tributary of Irish Creek, Loudon Township, Carroll County. Ohio EPA stated that “approximately 500 feet of waterway was impacted by the spill requiring 6,000 gallons of water to be recovered by vacuum truck.”

On November 3, 2017, Ohio Attorney General Michael DeWine filed a lawsuit against Rover Pipeline, LLC, on behalf of Ohio EPA alleging that Rover Pipeline LLC “illegally discharged millions of gallons of drilling fluids to Ohio’s waters, causing pollution and degrading water quality on numerous occasion and in various counties across the state” throughout the pipeline construction. Rover Pipeline LLC was asked to comply with Ohio EPA-approved plans to prevent water quality pollution and degradation and implement mitigations and relief measures. If it failed to do so, Rover Pipeline LLC would be mandated to pay a $10,000 fine per day of violation.

On November 24, 2017, Ohio EPA identified various spill incidents during the period from September 26 through November 16, 2017 and thus issued another notice of violation #19. The agency declared that the recurrence of such incidents is “completely unacceptable;” and in a letter dated November 22, 2017, Ohio EPA mandated Rover Pipeline LLC to develop a plan of action to prevent further incidents resulting from the company’s Horizontal Directional Drilling (HDD) activities.

In January 2018, Ohio EPA claimed another spill incident near the Tuscarawas River associated with the pilot hole installation in Stark County and requested Rover Pipeline LLC to halt its drilling activity. On February 6, 2018, FERC approved Rover Pipeline LLC’s revised drilling plan and allowed the company to resume its HDD activities.

On March 5, 2018, West Virginia DEP ordered Rover Pipeline LLC to “immediately cease & desist any further land development activity” pending review of the company’s compliance with the terms and conditions of the Water Pollution Permits and relevant laws and rules. This order is the result of multiple environmental violations in the state relating to water quality and protection. 

Stay tuned for further legal developments!

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