TradeEdge Exchange:Rover Gas Pipeline Builder Faces Investigation by Federal Regulators

Federal regulators will investigate Energy Transfer Partners,TradeEdge Exchange the company behind the controversial Dakota Access pipeline in North Dakota, for alleged violations associated with its $4.2 billion Rover natural gas pipeline in Ohio.

The investigation comes as the number of violations and fines against the company over the Rover project continue to grow.

The Federal Energy Regulatory Commission has preliminarily determined that Energy Transfer Partners and its subsidiary Rover Pipeline, LLC, did not “fully and forthrightly” disclose all relevant information to the commission in its application for the pipeline, according to a notice filed by the commission on July 13.

“Rover falsely promised it would avoid adverse effects to a historic resource that it was simultaneously working to purchase and destroy,” FERC wrote in its Notice of Alleged Violations. “Rover subsequently made several misstatements in its docketed response to the Commission’s questions about why it had purchased and demolished the resource.”

The historic resource in question was the Stoneman House, a historic home built in 1843 in Dennison, Ohio. “We have resolved all outstanding issues regarding the Stoneman House with the Ohio State Historic Preservation Office (Ohio SHPO),” Energy Transfer Partners spokesperson Alexis Daniel said in an email.

Rover Pipeline LLC has agreed to pay more than $4 million to the Ohio SHPO after razing the historic building.

“The revised MOU [Memorandum of Understanding] between Rover and the Ohio SHPO is in effect, and we look forward to cooperatively working with them to implement the MOU,” Daniel said. “At the same time, we will continue to work with FERC to address any remaining Stoneman House issues.”

A Dec. 5, 2016, letter from FERC to the federal Advisory Council on Historic Preservation stated that the house, which was eligible for inclusion in the National Register of Historic Places, was located across the street from a proposed compressor station for the pipeline. FERC officials expressed concern to pipeline company representatives about the visual impact of the compressor station on the historic house in February 2014, according to the letter.

Rover purchased the Stoneman House on May 11, 2015, and a year later, without notifying FERC, demolished the building in late May of 2016. Unaware that the building had just been destroyed, FERC recommended on July 29, 2016, that Rover develop a revised visual screening plan for the proposed compressor station to shield views from the historic property.

Energy Transfer Partners said in a subsequent filing with FERC that it had initially intended to convert the house into office space but decided to demolish it instead because the house was “too small and ill-suited for its intended purpose.”

Farmers Urge Investigation of Field Damage 

Pipeline opponents say they aren’t surprised.

“I think it’s somewhat consistent with this company and what they are doing in Ohio,” said Craig Wilson, an attorney who represents approximately 140 clients, mostly farmers concerned about damage to their farmland from the pipeline. “They just go do things and ask for forgiveness after the fact.”

Heavy rains in Ohio this spring have caused trenches dug by the pipeline company to flood, Wilson said. The company then pumped the water onto surrounding agricultural fields, flooding crops, according to Wilson, who has petitioned FERC to investigate the damage. In addition, he said, the trench work has mixed topsoil that is good for growing crops with underlying, nutrient-poor layers that will permanently reduce crop yields once the work is completed.

“We’ve never experienced anything like this company in Ohio before,” he said. “They had that culture since day one when they came into Ohio. They were running a pipeline through here, and they were basically telling the landowners to get out of the way.”

Wetlands Flooded Again, Among 10 Violations

Environmental officials in Ohio express similar frustrations.

The Ohio Environmental Protection Agency has received 34 complaints and issued 10 notices of violation since construction started in March, agency spokesman James Lee said on July 14.

In April, Rover Pipeline LLC spilled several million gallons of drilling mud—mud laced with chemicals used to tunnel underground to create space for new pipelines—into wetlands in Stark County in eastern Ohio.

The company was subsequently transporting the mud to a nearby quarry as part of its cleanup measures before regulators discovered the mud contained diesel fuel that could potentially contaminate nearby drinking water.

FERC barred the pipeline company from initiating drilling at any new sites in May but allowed the company to continue work at sites where drilling had already begun, including the site of the massive Stark County spill. Additional spills occurred at the Stark County site on July 2-3, when 6,500-7,500 more gallons of drilling mud flowed into the same wetlands area, agency records show.

Civil Penalties Close to $1 Million Proposed

Energy Transfer Partners has not formally acknowledged the violations and administrative orders issued by the Ohio EPA, orders that proposed civil penalties close to $1 million, Lee said.

“Generally, when the agency is dealing with a company and there are violations and proposed orders, the company will respond in writing and show some degree of contrition and make some sort of a counter offer or alternate proposal,” Lee said. “In three rounds of proposed administrative orders, Rover would not do that.”  

Daniel, the spokesperson for Energy Transfer Partners, disagreed.

“We continue to work with the Ohio EPA and FERC to resolve any issues in a manner that is satisfactory to everyone involved,” Daniel said.

On July 7, Ohio EPA sent a letter to the state’s attorney general requesting that the office pursue civil penalties against Rover Pipeline LLC.

The company has laid more than half of the pipe for the 713-mile line that runs from Pennsylvania and West Virginia through Ohio to Michigan.