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Pennsylvania opens investigation into gas liquids pipeline

March 12, 2019

HARRISBURG, Pa. (AP) — Pennsylvania’s attorney general said Tuesday that his office has opened an investigation into construction on a 350-mile natural gas liquids pipeline project across southern Pennsylvania that has been blamed for polluting waterways in dozens of places and causing sinkholes near homes.

Attorney General Josh Shapiro took the investigation on a referral from Delaware County’s district attorney, which said it will work with the state to investigate the Mariner East 1, 2 and 2x pipeline projects.

Shapiro’s office received the referral around March 1. A spokesman declined to say more about the investigation, including what prompted it.

“We will leave no stone unturned in this case,” Shapiro said in a brief statement.

The Mariner East pipelines run alongside each other and are owned by Texas-based Energy Transfer LP, a multibillion-dollar firm that owns sprawling interests in oil and gas pipelines and storage and processing facilities.

The company’s projects have drawn more than $13 million in fines in Pennsylvania — primarily for polluting waterways from spills of drilling fluid and construction methods not approved by state regulators — and several temporary shutdown orders by state agencies.

Sinkholes on the lawns of homes in Chester County have highlighted the lack of state authority to regulate the routes and safety features of intrastate pipelines, and prompted the county’s district attorney to start a criminal investigation.

The pipelines are the subject of various lawsuits and challenges in front of state regulators. At one point, the state Department of Environmental Protection accused an Energy Transfer subsidiary of “egregious and willful violations” of state law.

Last month, Gov. Tom Wolf criticized the company, saying “there has been a failure by Energy Transfer and its subsidiaries to respect our laws and our communities.”

Energy Transfer said Tuesday there is no legitimate basis for a criminal investigation.

It said it is confident that it hasn’t violated any criminal laws and intends to defend itself. It also said it has worked closely with state officials and inspectors, and hopes to speak to prosecutors’ offices to bring the matter “to an appropriate resolution.”

“The safety of all those who live and work along our pipeline is our first priority, and this project was planned and implemented based on that fact,” the company said.

Energy Transfer reported $54.1 billion in revenue in 2018, with net income of $3.4 billion.

Its $2.5 billion, 20-inch Mariner East 2 pipeline began operating in late December, ferrying propane, butane and ethane from Marcellus Shale natural gas drilling fields in southwestern Pennsylvania to its export terminal near Philadelphia, the Marcus Hook Industrial Complex.

The 16-inch Mariner East 2X is almost complete.

A January shutdown of Mariner East 1 — a nearly 90-year-old oil pipeline recently overhauled to carry natural gas liquids — is still in effect after another sinkhole opened alongside it in Chester County.

A February order halting construction permits for Energy Transfer pipelines also is still in effect after state officials accused the company of failing for months to fix erosion and soil problems blamed for an explosion on a methane pipeline that destroyed a home in western Pennsylvania.

While Energy Transfer has denied criminal wrongdoing, the chief executive and chairman of its general partner, Kelcy Warren, told analysts in a conference call last month that the company had made mistakes in Pennsylvania.

“We’re going to take our medicine and fix those mistakes and complete good projects from this point forward, not to insinuate that everything we’ve done has been bad,” Warren said. “It’s just we’ve made some mistakes that we’re not proud of. So you’ll see that improve, and when we don’t make those mistakes again that our costs are going to improve and the predictability of those costs are likewise going to improve.”

An Energy Transfer spokeswoman on Tuesday declined to say what mistakes, exactly, Warren was referring to.

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