U.S. energy regulator proposes $40 mln civil penalty for Rover Pipeline

REUTERS/Laszlo Balogh

Dec 16 (Reuters) - The U.S. Federal Energy Regulatory Commission on Thursday ordered Energy Transfer Partners LP and its Rover Pipeline LLC unit to explain why the company should not pay a $40 million civil penalty for alleged violations during construction of a 711-mile-long (1,144-km) interstate natural gas pipeline in Ohio.

An investigation by FERC's Office of Enforcement concluded that Rover Pipeline included diesel fuel and other toxic substances and unapproved additives in drilling mud during its horizontal directional drilling (HDD) operation under the Tuscarawas River in Stark County, Ohio.

In April 2017, shortly after Rover began its HDD operation, a large inadvertent release of 2 million gallons of drilling mud reached the surface and flowed into a nearby protected wetland, FERC said.

Testing conducted by the Ohio Environmental Protection Agency found petroleum hydrocarbons consistent with diesel fuel, it said.

In a response to Reuters, Energy Transfer spokesperson Alexis Daniel, said the company "did not direct this action. In fact, Energy Transfer learned many months later, that a rogue employee of an independent subcontractor has admitted under oath to have committed this act on his own volition and then tried to hide it.

"We look forward to the opportunity to present these facts in court where we are confident they will be correctly ruled on," Daniel said.

Energy Transfer Partners and Rover have 30 days to respond to FERC's show-cause order.

The pipeline, which was initially planned to be completed in November 2017, was long delayed because of drilling fluid spills and other violations that occurred during construction. Those incidents prompted state and federal regulators to issue orders to halt the work.

Reporting by Brijesh Patel in Bengaluru; Editing by Dan Grebler and Jonathan Oatis

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