U.S. regulators troubled by diesel fuel found in ETP Rover spill in Ohio

(Reuters) - U.S. federal energy regulatory commissioners said they were “troubled” that Ohio found signs of diesel fuel in drilling fluid samples near a spill that occurred during Energy Transfer Partners’ construction of the Rover natural gas pipeline.

The April spill occurred while drilling under the Tuscarawas River in Ohio and released about 2 million gallons (7.6 million liters) of drilling fluid into a wetland.

In its application to build the $4.2 billion pipeline from Pennsylvania to Ontario, ETP told the U.S. Federal Energy Regulatory Commission (FERC) that its drilling fluid would be composed of a “slurry made of nontoxic/non-hazardous bentonite clay and water.”

“We are troubled by the Tuscarawas River spill and indications that diesel fuel is present in the drilling mud,” FERC’s acting Chairman Cheryl LaFleur and Commissioner Colette Honorable said in a joint statement.

“Going forward, we expect that Rover will act consistently with its commitments ... and will undertake the future actions directed by Commission staff to mitigate the potential impacts caused by any introduction of diesel fuel into its drilling mud, however it might have occurred,” the commissioners said.

ETP said in an email it was fully cooperating with FERC and the Ohio Environmental Protection Agency, noting “there is no evidence that the source of the hydrocarbons is related to our drilling activity.”

ETP said it still expects the project to enter service in two phases in late July and Nov. 1.

Several energy traders and analysts, however, have said an order by FERC on May 10 order banning ETP from new horizontal directional drilling after the Ohio spill could cause delays.

Earlier Thursday before FERC issued its letter, a group of environmental organizations, including the Sierra Club, sent a letter urging the U.S. Army Corps of Engineers to stop construction of the Rover project. The Army Corps, along with FERC and other agencies, was involved in the approval of the pipeline.

Rover, once finished, will have the ability to transport 3.25 billion cubic feet per day of gas, enough to supply about 15 million U.S. and Canadian homes.

ETP is best known as the operator of the Dakota Access crude pipeline from North Dakota to Illinois, which is opposed by environmentalists and the Standing Rock Sioux tribe. Dakota Access entered service on Thursday.

The Ohio EPA, which found the diesel in the drilling fluid, had fined ETP $431,000 in May to resolve numerous water and air pollution violations during construction of Rover, including the wetland spill.

Reporting by Scott DiSavino in New York; Editing by Lisa Shumaker