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Former DEP chief says Sunoco Logistics, not regulators, caused pipeline delays

Pennsylvania's former top environmental regulator fired back Friday at Sunoco Logistics Partners LP, saying the company's own failures caused the permitting snags that have slowed its $2.5 billion Mariner East 2 pipeline project.

"There are huge permit delays on this project, and they have been caused by Sunoco's consultant, by their lack of efforts, by their lack of attention to compliance," said John Quigley, who stepped down in May as head of the state Department of Environmental Protection.

Quigley said Sunoco had complained about the permitting process to Gov. Wolf and legislators in an effort to force the state to "rubber-stamp" the contentious 300-mile Marcellus Shale pipeline, which will deliver natural-gas liquids across the state to Sunoco's Marcus Hook terminal.

In an interview, Quigley said he objected to the implications of Sunoco's announcement Thursday that the company was pushing back next year's pipeline start-up to deal with unanticipated delays in obtaining DEP permits.

Michael J. Hennigan, chief executive of the Newtown Square company, told investment analysts during Sunoco Logistics' third-quarter earnings call Thursday that it was responding to numerous "technical deficiencies" in its permit applications.

Hennigan, questioned by analysts, said regulators "are working very cooperatively with us" and did not complain explicitly about the agency's treatment.

Quigley said it appeared that Sunoco was using a "standard excuse that the regulated community and the anti-regulatory forces in the General Assembly  continually trot out," namely  that regulators are impeding progress.

"DEP bends over backwards, maybe too much, to help applicants come into compliance with the requirements,"  Quigley said, noting that the agency denies less than 2 percent of the applications in all of its programs.

DEP's review is limited to permits the pipeline needs to cross hundreds of streams and wetlands. The pipeline, which will transport liquids such as ethane and propane, crosses 17 counties, including Chester and Delaware.

Despite numerous meetings with Sunoco and its consultants over permitting requirements — Quigley called them "hand-holding sessions" —  DEP still rejected the permit applications over hundreds of missing or insufficient details about how the company plans to protect the environment and cultural-heritage sites along the pipeline route.

Quigley, who is now a consultant and a senior fellow at the University of Pennsylvania's Kleinman Center for Energy Policy, said it was in Sunoco's interest to satisfy the regulatory requirements, because pipeline opponents are likely to appeal the permits, and any deficiencies will increase the likelihood those opponents will prevail in court.

"They ran to the governor's office, they ran to anybody who would listen to them to get DEP to rubber-stamp the permits, and that's a fool's errand, because everybody except Sunoco realizes these permits are going to be appealed, and losing an appeal is only going to delay the project further," he said.

Quigley is no stranger to controversy. He was forced to resign in May after he sent a private email encouraging environmental activists to lobby for gas-drilling regulations.

The 275,000-barrel-per-day Mariner East project is considered one of the linchpins to developing local uses for production from the Marcellus and Utica Shale formations. The natural-gas liquids are a raw material in petrochemical production.

Joe McGinn, Sunoco's senior manager for public affairs, said the company recently obtained a 30-day extension from DEP, until Dec. 7, to respond to the agency's requests for more permit details.