Pipeline Permit Scandal Highlights Confusion Amid Push to Build Plastics Plants

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For the past 42 years, the Beaver County Conservation District in western Pennsylvania has hosted their Maple Syrup Festival, an annual all-you-can-eat pancake breakfast featuring syrup made from maple trees in a park in Beaverย Falls.

Itโ€™s a huge event in this county, populationย 164,742; organizers expected up to 40,000 attendees at last yearโ€™s festival, which included a Civil War re-enactment, pony rides, and craft demonstrations like bobbin lace making.

But with the arrival of Shell and its $6 billion plastics manufacturing plant, currently under construction in Beaver County, the conservation district assumed more serious responsibilities than throwing a maple syrup festival โ€”ย including permitting the fossil fuel pipelines feeding the massive plasticsย complex.

In a scathing audit issued on August 15 byย state regulators, the Beaver County Conservationย District (BCCD) earned exceptionally low marks, after auditors found troubling problems that may have played a role in a major pipeline explosion lastย year.

The Pennsylvania Department of Environmental Protection (DEP) audit highlights what can go wrong when state and local regulators are unprepared for the arrival of a powerful industry, illustrating the pressures when once-unobtrusive offices suddenly take on outsized importance amid a push to promote rapidย development.

Its findings could also spell trouble for Shell, which currently relies on permits authorized by the district for at least two pipelines connecting the companyโ€™sย plastics plantย to natural gas wells that will supply it with the raw materials to make plastics from fracked gas in the Marcellusย Shale.

Construction at the Shell plastics plant in Beaver County in 2018
Construction at Shell’s $6 billion plastics manufacturing complex in Beaver County, Pennsylvania, in August 2018.
ย Credit:ย Governor Tom Wolf,ย CC BYย 2.0

The district, auditors wrote, โ€œhas shown a lack of sound judgement in recent years,โ€ grading the program overall โ€œunsatisfactory.โ€ On Augustย 20, the DEP yanked the Beaver County Districtโ€™s authority to be involved in erosion and sediment control permits entirely, and said it would review the districtโ€™s authority over otherย permits.

โ€œDEP staff identified significant and consistent problems with BCCDโ€™s recordkeeping, permit review, and inspections,โ€ DEP Secretary Patrick McDonnell said in a statement announcing the termination of the districtโ€™sย authority.

Environmental groups expressed outrage. โ€œThe improper issuance of pipeline construction permits in Beaver County without the proper review is an egregious offense,โ€ said Joseph Otis Minott, executive director and chief counsel for environmental group Clean Air Council, โ€œthat put residentsโ€™ safety and the environment at greatย risk.โ€

One Beaver County District Commissioner came under fire in the local press for failing to attend the organizationโ€™s meetings. โ€œI read all the minutes and I contacted them numerous times for different things, but the meeting is 9:00 a.m. on Monday mornings,โ€ Commissioner Dan Camp told the BeaverCountian. โ€œNo, I havenโ€™t been attendingย them.โ€

Eight Day-Old Revolution Pipelineย Explodes

Auditors reported that the Beaver County District had โ€œreviewed and authorizedโ€ an erosion and sediment control permit for the Revolutionย pipeline.

That pipeline was built by Energy Transfer, builder of the Dakota Access pipeline. Its job wasย to carry so-called โ€œwetโ€ gas, a mix of hydrocarbons such as methane, propane, and ethane, from fracked gas wells in Pennsylvania to a plant where โ€œdryย gasโ€ (also known as methane, the primary ingredient in natural gas) could be separated, leaving behind the natural gas liquids prized by the petrochemical and plasticsย industries.

The problem? The district had no legal authority to authorize the permit, which โ€œshould have been reviewed by DEPโ€™s Oil and Gas Management program,โ€ auditors wrote. The Revolution pipeline is considered a โ€œgathering line,โ€ which gathers gas from individual gas wells, and not a โ€œtransmission line,โ€ which carries gas long distances, auditors wrote โ€” and the district had no authority over gatheringย lines.

Revolution pipeline hillside
The site of the Revolution pipeline explosion. Since the blast, Energy Transfer has struggled to restore the steep slope where the pipeline burst. Credit:ย ยฉ 2019 Lauraย Evangelisto

On September 10, 2018, the Revolution pipeline burst, unleashing a column of fire 150 feet tall, destroying a home, a barn, several cars, and prompting the evacuation of over two dozen homes. One family barely escaped with their lives, according toย neighbors.

The pipeline had only carried fossil fuels for eight days beforeย igniting.

Investigators immediately focused on recent heavy rainfall in the area. While an official investigation by the Public Utility Commission remains underway, reports indicate that the steep hillside where the explosion occurred had slipped, causing Revolution to rupture in Beaverย County.

Erosion and sediment (E&S) control plans are designed to prevent pipeline leaks by keeping the ground stable by controlling rainwater and otherย runoff.

โ€œThe explosion of the Revolution Pipeline on the morning of September 10, 2018 on Ivy Lane in Center Township makes clear the stakes of BCCDโ€™s improper issuance of permits,โ€ five area environmental organizations wrote in a letter to the DEP shortly after the auditโ€™s findings were made public. โ€œThe public cannot afford to continue to rely on permits reviewed by BCCD forย protection.โ€

Unreported ‘Potential Conflict ofย Interest’

Auditors identified a wide range of other problems in Beaverย County.

For one thing, the district had accepted an โ€œexpedited reviewโ€ fee for permits that was โ€œin direct conflictโ€ with DEP rules, the DEPย found.

Second, it failed to properly notify the DEP about a conflict of interest related to Shellโ€™s plastics plant, specifically a pipeline that would carry ethane, the raw materials for plastic,ย to Shellโ€™s plant, a project known as the Falconย pipeline.

โ€œThis project traversed the Districtโ€™s property, where the District received a payment for an easement across their property,โ€ auditors wrote. โ€œThe District should have contacted the DEP Regional Office for guidance related to the potential conflict ofย interest.โ€

Fracking for Plastics
This storyย is part ofย Fracking for Plastics, aย DeSmog investigation into theย proposed petrochemical build-out in the Ohio River Valley and the major players involved, along withย the environmental,ย health,ย andย socio-economicย implications.

Shell had paid the Beaver County Conservation District $174,791 for an easement stretching roughly 1,500 feet across district property in Independence Township, according to NPR State Impact, a payment which works out to about $116.50 per foot. Thatโ€™s higher than the $75-a-foot rate for Falcon pipeline easements whichย FarmProgress reported Shell had paid in 2017, and nearly triple the $40-a-foot rate that Shell reportedly initially offered to Pennsylvaniaย landowners.

There are signs that the district had previously faced financial challenges. In 2017, a board member had resigned from Beaver County Conservation District, citing suchย difficulties, according to local pressย reports.

โ€œI can no longer be a part of a Board that doesnโ€™t have a financial plan for the District,โ€ Sandie Egley said as she resigned from the districtโ€™s board, according to the Beaver Countian. โ€œFor many years [the] Maple Syrup Festival has lost tens of thousands [of dollars] and with each passing year failed to developed [sic] a plan to improveย financially.โ€

Not long after, Shell was under pressures of its own. In late 2017, the company had forged ahead with groundbreaking on construction ofย its $6 billion plastics manufacturing site, known as an ethane โ€œcracker,โ€ย without first obtaining all the permits necessary for the Falconย pipeline.

In May 2018, environmental groups filed public comments objecting to Falconโ€™s application toย neighboring Ohio for those two permits, calling Shellโ€™s plans inadequate and warning that the permits were likely barred by stateย law.

The Beaver County District had been granted authority by the DEP to review and authorize two types of permits, Chapter 102 permits for erosion and sediment control and Chapter 105 permits, which relateย to waterways andย wetlands.

Land clearing for a shale gas pipeline in Pennsylvania
Land clearing for a shale gas pipeline in Pennsylvania in 2012.
Credit:ย Max Phillips/Jeremy Buckingham MLC, viaย Beyond Coal & Gas Image Library,ย CC BYย 2.0

The DEP ultimately issued Falconโ€™s Chapters 102 and 105 permits in December 2018, following what the agency called โ€œan extensive review,โ€ conducted โ€œin consultation with the three conservation districts,โ€ including Beaverย Countyโ€™s.

Falcon is not the only Shell pipeline where the district’s role drew the ire of auditors. The district had told the DEP that it would work with state officials on permits for another pipeline, known as the National Fuel Gas project, intended to connect with Shellโ€™s plastics plant, a pipeline which will cross the Revolution pipeline within a few hundred feet of the site where the latter exploded in Beaver County. Auditors wrote that the district nonetheless authorized erosion and sediment control and water permits without DEPโ€™s greenย light.

In a statement, environmental groups called on the DEP to suspend all of the permits reviewed by the district and to invite the state attorney general to investigate โ€œpotential criminalย violations.โ€

โ€œWe need to proceed more carefully when reviewing permits for pipeline construction, because of the growing evidence that industry is not doing a thorough job when constructing pipelines,โ€ said Matthew Mehalik, executive director of the Breathe Project. โ€œThe DEP must hold pipeline companies accountable to the highest standards for these risky projects and not allow them to be rammed through regulatoryย review.โ€

Hills andย Valleys

One of the key concerns in the petrochemical industry about pursuing a build-out of plastics and chemical manufacturing sites in the Appalachian Ohio River Valley is the ground itself โ€” the hills and mountains that make the region a polar opposite to the flat expanses of Texas and other Gulf Coast states where the American petrochemical industry has called home forย decades.

Shell plastics plant construction site in hills of Pennsylvania in 2016.
Shell plastics plant construction site in Beaver County, November 2014.ย Credit:ย Governor Tom Wolf,ย CC BYย 2.0

Wally Kandel, co-founder of Shale Crescent USA, which markets the Ohio River Valley to petrochemical manufacturers, described the problem in April at a West Virginia Manufacturers’ Association industryย conference.

โ€œThis is why we go to the executives, the CEOs of the companies,โ€ Kandel said, โ€œbecause instead of sending somebody out, ‘go find a place to build a petrochemical plant’ โ€” because when they get off the airplane and look around, they go, ‘Darn, there’s way too many hills here,’ what we do is we show that there’s a billion dollar advantage by building a plant here and then the CEOs go ‘Go find me a place in Shale Crescent USA for me to build my nextย plant.’โ€

Beaver County is not the only county in fracking-rich Pennsylvania where local conservation districts are granted authority over Chapter 102 and 105 permits. Every countyย except Philadelphia has that authority for erosion and sediment permits, and roughly half of the stateโ€™s counties have authority for the water and wetlands permits. A dozen of the stateโ€™s counties enjoy greater authority over permits than Beaver Countyย had.

โ€œI hope Gov. Wolf will shut down all pipeline construction projects and have a major investigation,โ€ย said Rev. James Hamilton, a retired United Methodist pastor who lives in Ambridge, Pennsylvania, โ€œnot only in this county but in other places where conservation districts are issuingย permits.โ€

Jim Shaner, the districtโ€™s executive director, said after a public hearing on August 28 that the state should not have revoked the districtโ€™s authority. โ€œWe should be reviewing the permits, we have not done anything wrong, we just had a filing issue to where stuff wasnโ€™t filed in hard copy,โ€ Shaner said, according to State Impact.

Neither Shell nor the Beaver County Conservation District responded to requests forย comment.

Main image: Construction of the Shell Cracker Plant along the Ohio River, Beaver County, Pennsylvania in January 2019.ย Credit:ย Drums600,ย CC BYSAย 4.0
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Sharon Kelly is an attorney and investigative reporter based in Pennsylvania. She was previously a senior correspondent at The Capitol Forum and, prior to that, she reported for The New York Times, The Guardian, The Nation, Earth Island Journal, and a variety of other print and online publications.

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