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Mariner East pipeline hit with $319,000 in fines for Pennsylvania violations

The fines are the latest of $13.5 million in penalties assessed on the contentious Marcellus Shale pipeline project since 2017.

State environmental regulators have hit Sunoco Pipeline LP with $319,000 in fines for violations, the latest of $13.5 million in penalties assessed since 2017.
State environmental regulators have hit Sunoco Pipeline LP with $319,000 in fines for violations, the latest of $13.5 million in penalties assessed since 2017.Read moreCLEM MURRAY / Staff Photographer

State environmental regulators have hit Sunoco Pipeline LP with $319,000 in fines for violations related to construction of its Mariner East pipeline system, the latest among $13.5 million in penalties assessed on the contentious project since 2017.

The Pennsylvania Department of Environmental Protection announced Thursday that Sunoco had signed two consent agreements to settle complaints that it violated the Clean Streams Law and Dam Safety and Encroachment Act in 2017 and 2018. The company was cited for unauthorized discharges of drilling fluids, consisting of bentonite clay and water, while conducting horizontal drilling in 10 counties to excavate underground pathways for its pipeline. It was also cited for accelerated erosion and sedimentation at sites in Cumberland County in 2017.

Sunoco Pipeline is a subsidiary of Energy Transfer Partners (ETP) of Dallas. Sunoco’s $5.1 billion Mariner East system consists of two adjacent pipelines that transport natural gas liquids, such as propane, from Western Pennsylvania and Ohio to an export terminal in Marcus Hook. Construction of the third Mariner East pipeline is nearly completed, and it is expected to go into service by the end of the year.

Patrick McDonnell, secretary of the Pennsylvania Department of Environmental Protection, said the DEP is committed to holding Sunoco and other companies to a high standard. "These actions, which resulted in violations of permits and laws that are meant to protect our waterways, are unacceptable,” he said in a statement.

ETP signed the consent agreements on Aug. 20 and 21. “We are pleased to have resolved this issue with the DEP as we remain focused on safely completing construction of this important pipeline,” the company said in a statement.

The Mariner East 2 project has been hit with 98 notices of violation since 2017, and Sunoco’s conduct has prompted a backlash of protest from neighbors and officials. Chester County Prosecutor Thomas Hogan is conducting a criminal investigation of Sunoco, and State Sens. Andy Dinniman and Tom Killion have introduced a package of legislation aimed at reforming Pennsylvania’s pipeline oversight.

DEP is developing new permit conditions and policy guidelines for future pipeline projects.

The Pennsylvania Public Utility Commission also is re-examining its regulations governing the construction and operation of pipelines that carry highly volatile liquids, such as Mariner East. The PUC on Wednesday extended the comment period on the new rules until Sept. 11. So far, about 75 people and organizations have submitted comments, which are available for examination on the PUC’s website.

DEP’s latest fines are a relatively small expense for ETP, which told investment analysts earlier this month that its nationwide network of pipelines and terminals expects to report from $10.8 billion to $11 billion in earnings before interest, taxes, depreciation, and amortization this year. The regulatory delays and temporary halts to operations after construction-related sinkholes appeared on the pipeline route have caused more financial damage, costing the company millions in lost business.

Since Mariner East 2 went into service in December, and the older and smaller Mariner East 1 resumed operations in late April, Sunoco has moved about 230,000 barrels of propane, ethane, and butane per day through the two pipelines to its Marcus Hook Industrial Complex, the company said in a second-quarter earnings call with investors on Aug. 8.

In addition, the company is moving about 70,000 barrels of gas liquids to Marcus Hook by rail and by truck, Thomas Long, ETP’s chief financial officer, said during the conference call.

Most of the material that is delivered to Marcus Hook is loaded on ships for European petrochemical manufacturers. The company says it is also exploring opportunities to build manufacturing operations in Marcus Hook that would use the gas liquids as a raw material.

Sunoco’s third Mariner East pipeline, called ME2X, is scheduled to go into service by the end of the year, when the company said it expects volumes to increase even more.