U.S. OKs more ETP natgas pipe drilling, Ohio wants pause

(Reuters) - U.S. energy regulators on Thursday approved Energy Transfer Partners LP’s request to resume horizontal drilling at eight sites in Ohio and West Virginia as it works to complete part of the Rover natural gas pipeline by the end of the year.

The approvals came as the Ohio Environmental Protection Agency sought a pause in Rover’s horizontal drilling in the state due to repeated spills of the clay and water mix used to lubricate the drilling blades.

The Ohio EPA asked the U.S. Federal Energy Regulatory Commission (FERC) for the pause on Nov. 24.

“Ohio was only informed shortly before and not consulted about the FERC approval to Rover. We are still very concerned about the total and continuing number of environmental impacts Rover is causing in Ohio,” Ohio EPA director Craig Butler said in a statement.

Pipeline companies use horizontal directional drilling to cross under large obstacles like highways and rivers.

ETP said that with the FERC approval on Thursday it can proceed with all 49 horizontal drills for the entire Rover project. It has already completed 29 of those drills.

Once finished, the $4.2 billion Rover will carry up to 3.25 billion cubic feet per day of gas from the Marcellus and Utica shale fields in Pennsylvania, Ohio and West Virginia to the U.S. Midwest and Ontario in Canada.

One billion cubic feet per day of gas can supply about 5 million U.S. homes.

In a letter filed with FERC late on Wednesday, ETP said the Ohio EPA “grossly mischaracterizes Rover’s activities.”

ETP said the five spills identified by the Ohio EPA in its Nov. 24 request were at two locations, Captina Creek and Black Fork Mohican, and not “significant” in size, the biggest being an estimated 1,188 gallons (4,500 liters) at Captina Creek on Oct. 11.

ETP said in its letter that Rover was in compliance with the FERC-approved plan that allowed the company to start horizontal drilling again in September.

FERC banned ETP from new horizontal drilling in May following a spill of around 2 million gallons (7.6 million liters) into the Tuscarawas River wetland in Ohio. There were traces of diesel found in that spill, which is the subject of a separate FERC investigation. Diesel was not allowed in the drilling fluid.

Resumption of drilling under the Tuscarawas was included in the FERC approval on Thursday of the final eight horizontal drills needed for the project.

ETP said Rover was more than 95 percent complete and it expected to finish the first phase of the project in Ohio by year-end and the second phase from Ohio to Michigan by the end of the first quarter.

Major gas producers that have signed up to use Rover include units of privately held Ascent Resources LLC, Antero Resources Corp, Range Resources Corp, Southwestern Energy Co, Eclipse Resources Corp and EQT Corp.

Reporting by Scott DiSavino; editing by Leslie Adler and Andrew Hay