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US pipeline owner fined $30 million for 2018 explosion

07 January 2020

Energy Transfer Corp. has been fined $30.6 million after a landslide caused one of its pipelines to explode in September 2018. The Texas-based energy company signed an agreement with Pennsylvania’s Department of Environmental Protection (DEP) which also allows Energy Transfer to resume its pursuit of environmental permits for its pipeline projects.

Representative image: Shutterstock
Representative image: Shutterstock

The settlement was announced on January 3 and means Energy Transfer can also begin the process of repairing its Revolution pipeline which suffered an explosion on September 10, 2018 -  just days after it had been activated. Torrential rain and saturated ground caused a slip to occur near a 24-inch diameter gathering segment of the Revolution system which resulted in a rupture and subsequent blast.

There were no injuries as a result of the explosion, which occurred 30 miles northwest of Pittsburgh in Center Township. According to the Pittsburgh Post-Gazette, two major customers of the Revolution pipeline, one of which that has already filed for bankruptcy, remain embroiled in lawsuits with Energy Transfer. 

Regulators have been investigating Energy Transfer and its contractors since the incident and found that poor construction and oversight were leading causes of the blast. The DEP says that Energy Transfer knew about the impacted area’s susceptibility to landslides since January 2016 but failed to notify the engineers who submitted permits for construction. According to internal documents revealed during the DEP’s investigation, the site where the blast occurred suffered several slips in April 2018. However, Energy Transfer failed to consult engineers or geotechnical experts on how to stabilise the ground.

Instead, employees dried the soil out, transported it back uphill and installed underdrains despite not having a permit to do so. A consultant report from February 2019, commissioned by Energy Transfer, said that it was this soil that was affected by torrential rain in September 2018, leading to a slip and the subsequent rupture of the pipeline.

The DEP stopped issuing new environmental permits to Energy Transfer in February 2019 due to repeat violations of environmental rules. These violations came while Energy Transfer attempted to stabilise soil around the ruptured Revolution pipeline and its major Mariner East natural gas pipelines which are nearing completion.

Issues with underground drilling during the construction of the Mariner East pipelines caused several sinkholes in eastern Pennsylvania which meant Energy Transfer had already received $12 million in fines in 2019 before the latest penalty. Now that the DEP and Energy Transfer have reached a settlement for the September 2018 explosion, the DEP will resume its evaluation of the energy company’s plans for its Mariner East pipelines.

In a press release announcing the $30m penalty, DEP Secretary Patrick McDonnell said the settlement shows that Energy Transfer “has demonstrated its intention to correct its unlawful conduct to DEP’s satisfaction.”

The Pittsburgh Post-Gazette reports that $30.6 million is the highest penalty ever for an oil and gas project in Pennsylvania. $28.6m of the sum will go towards the DEP’s oil and gas program and clean water fund, while the remaining amount will be given to community environmental projects.

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