Sunoco settlement
Deal with the state, including $200,000 fine, worked out on Mariner East 1 pipeline problem
Energy Transfer LP’s Sunoco Pipeline subsidiary has reached a compromise with state pipeline regulators over corrosion on its 88-year-old Mariner East 1 line.
Pennsylvania Public Utility Commission prosecutors filed a formal complaint against Sunoco in December questioning the “soundness of (its) engineering practices” in protecting the pipeline from corrosion.
The PUC developed the concerns during an investigation of an 840-gallon leak of ethane and propane through a hole in the pipeline discovered on April 1, 2017, in Berks County.
An examination of the defect showed that the pipeline had corroded there and attention turned to Sunoco’s cathodic protection practices, which the PUC investigations and enforcement team found to be inadequate.
Cathodic protection is a method of preventing or slowing corrosion on exposed metal by pumping electric current to it.
The settlement agreement filed this week caps three months of negotiations with the company. It includes a $200,000 penalty and a commitment from Sunoco to disclose how much longer Mariner East 1 is likely to be operational.
PUC commissioners have not yet reviewed the Pennsylvania settlement, spokesman Nils Hagen-Frederiksen tweeted Wednesday afternoon, and have not voted on it.
Sunoco and PUC prosecutors are asking for a public comment period before the commission makes its decision so that “interested persons and entities, especially those who sought to intervene in this matter” can have their say.
Mariner East 1 is a mostly bare steel, 8-inch diameter pipeline installed in 1931. Historically, it ferried refined petroleum products from eastern Pennsylvania to the western part of the state.
In 2014, with a new 51-mile extension from Houston to Delmont, the entire system was reversed and repurposed to carry Marcellus and Utica shale natural gas liquids from southwestern Pennsylvania to processing plants and export facilities near Philadelphia.
The centerpiece of the settlement deal is a “remaining life study” that will aim to answer such questions as: What are the highest risks to the pipeline? What is Sunoco’s plan for replacing or repairing pipes in the ground? How many times has the pipeline leaked? What is the corrosion growth rate on the pipe?
Initially, Sunoco fought the PUC’s demands, insisting that federal regulators were just fine with its corrosion protection plans when they inspected them earlier in the decade, and that what the PUC was asking was not just overreaching but tantamount to writing new regulations without due process.
But in early February, the U.S. Pipeline and Hazardous Materials Agency issued its own notice of probable violations and a proposed compliance order to Sunoco for the same inadequacies in its corrosion control methods cited by the PUC.
It told the company to conduct a cathodic protection survey of the pipeline and submit a written plan to fix all deficiencies in its cathodic protection program.
As for the “remaining life study” required by the PUC, Sunoco claimed, “The concept is wholly inconsistent with the federal safety regulations because it presumes there is a finite life span of the ME1 pipeline.”
Oil and gas pipeline trade groups and even the Pipeline and Hazardous Materials Agency have been reluctant to link the age of a pipeline to its health, noting that if properly monitored and repaired, pipelines can last forever. But that is a technical, not an economic, calculation.
The remaining life study, which will take about six months, is a first of its kind, PUC staff said.
“Such a demand was really unheard of in this industry, but the public outcry regarding (Mariner East 1) warranted, in (our) view, this extraordinary relief on the part of the company,” Stephanie Wimer, a senior prosecutor at the PUC, wrote in support of the settlement.
The pipeline has suffered several shutdowns in the past year over separate concerns that sinkholes believed to have been caused by the construction of its sister Mariner East 2 pipelines had endangered the older pipe. The most recent incident was in January, kicking the pipeline offline.
PUC staff stressed that the deficits in Sunoco’s corrosion management program on Mariner East 1 have been addressed since Energy Transfer took over less than a month after the Berks County leak was discovered.
And the company, in a court filing, said the settlement “contains terms that require (Sunoco) to go above and beyond regulatory and statutory requirements and promote public safety.”
Sunoco noted that it was not admitting to the alleged violations by agreeing to the settlement. It had said the same of the violations alleged by the Pipeline and Hazardous Materials Agency, even as it sent a letter to federal regulators in March claiming that it was already performing the corrective measures they’d proposed.