On September 11, Sunoco’s horizontal drilling for the Dragonpipe (the Mariner East pipeline system) caused a huge release of drilling mud that polluted Marsh Creek Lake. In response, the DEP ordered the company to shut down construction at that location and reroute the pipeline farther away from the lake. This is a significant problem for Sunoco, because it will cause a delay of the completion of the 20-inch line.

In this post, I will touch on the two initiatives that Sunoco’s lawyers have launched to attempt to overturn the DEP order. If they are successful, Sunoco will presumably be able to resume drilling at the location of the drilling-mud release.

You can download all of the documents in this case from the DEP’s online “docket” system here.

The appeal to the Environmental Hearing Board. Sunoco’s first step was to file an appeal with the Environmental Hearing Board (EHB). This board acts as a court of appeal for DEP rulings. A slightly revised version of the appeal, which includes a reference to Sunoco’s “supersedeas” petition (more on that in a moment) is here.

Sunoco’s appeal claims that the reroute order is illegal from various points of view. It lists over a dozen different reasons why it is supposedly illegal. Among its claims:

“[The order] improperly revokes an approval previously granted in accordance with [the agreement of August 2017 with Clean Air Council and others], suspends and revokes Sunoco Pipeline’s [erosion and sedimentation] permits, unlawfully orders Sunoco Pipeline to implement a re-route of HDD 290, and is otherwise arbitrary; capricious; unreasonable; constitutes an abuse of the Department’s discretion; is contrary to fact; is not supported by substantial evidence; is not in accordance with applicable law; and is contrary to the Department’s authority under the Clean Streams Law, …  and the rules and regulations promulgated thereunder, the Dam Safety and Encroachments Act … and the rules and regulations promulgated thereunder, and Section 1917-A of the Administrative Code….”

In response to the appeal, the EHB assigned a judge (Judge Labuskes) who in turn set a schedule for the case: 180 days for “discovery” (with a requirement that talks toward a possible out-of-court settlement occur in the first 45 days), and 210 days for the filing of motions. That would take the process out to the end of April, 2021, unless the two parties (the DEP and Sunoco) either reach a settlement or jointly propose a different timetable. After that, hearings on the case would be held.

Judge Labuskes is the same judge that presided over the August 2017 agreement, so he is quite familiar with the pipeline and the issues surrounding it.

The supersedeas petition. Sunoco, of course, has no interest in waiting seven months for a hearing, plus additional months for a decision, so their next step was to try to get an immediate decision from the judge. To do this, Sunoco filed a “Petition for Supersedeas”. Roughly speaking (and I’m no lawyer) this is a request for the judge to immediately overturn the rerouting order of the DEP. The petition itself is a 28-page document that focuses on three claims:

  • That the DEP’s order is “arbitrary, capricious, and an abuse of discretion”
  • That the “[permit] revocation … violates the [August 2017 agreement] and is not a practicable alternative”
  • That the “re-route of HDD 290 will cause significantly greater injury to the public and the environment than any minimal harm that may result from completing construction of HDD 290.”

The interesting parts: exhibits. More interesting than the supersedeas petition (to me, at least) is the document containing the exhibits, which are the evidence on which the petition is based. It is 297 pages long and contains 15 exhibits.

Most of the 15 exhibits are affidavits from various people (Sunoco managers, contractors, and “expert witnesses”) claiming that Marsh Creek Lake was not really damaged, that any future pollution would not be serious, and that the proposed alternative route would be far worse for various reasons. The most interesting bits are toward the end of the document.

Exhibit 13 is the affidavit of Mark McConnell of Percheron, discussing what it would take to acquire the necessary landowner permissions. He provides a “line list”—a list of the parcels and their owners along the alternative route. There is also a detailed map (the first that I have seen from Sunoco) showing exactly where the rerouted pipeline would go. The process of acquiring rights would take 5-7 months if Sunoco has to exercise eminent domain because landowners won’t cooperate (which he anticipates will happen in at least two cases). And getting rights from the Pennsylvania Turnpike (which owns the majority of the land in question) would take 3-6 months.

The alternate pipeline route that Sunoco evaluated in its “supersedeas” petition.

Exhibit 14 is the affidavit of Richard Billman, Sunoco’s VP of Business Development. Billman says that Sunoco is still planning to complete ME2X (the 16-inch pipeline) by December 31, 2020. (Regardless of what happens at Marsh Creek Lake, making that date is completely impossible, in my opinion.) He also says that until work was stopped at Marsh Creek Lake, Sunoco was planning to complete ME2 by March 31, 2021. (He acknowledges that much of what Sunoco calls “ME2” in Chester and Delaware County is actually an old 14-inch pipe and sections of 16-inch pipe that were intended for ME2X.)

Based on the various steps that Sunoco would need to perform to reroute the pipeline as the DEP has ordered, Billman estimates the process would take 24 to 29 months.

Billman provides details of the delays and costs that he thinks would be associated with the reroute, but they are redacted as “Confidential”.

From his affidavit, you also find out that Sunoco plans to eventually convert ME1 to transportation of “refined petroleum products” (gasoline, oil, etc.) instead of the current highly volatile liquids.

Exhibit 15 is the affidavit of Stephen Compton, Senior Program Director for Tetra Tech. He claims that while the reroute is “technically feasible” it “cannot be considered a practicable alternative” to the HDD. In support of this opinion, he provides a laundry list of possible problems. The principal ones are: the land impacts would be greater, there could be traffic interruptions on local roads, landowners would be inconvenienced, there would be greater impact to wetlands and creeks, and Sunoco might have to do a new bog turtle survey. He also reiterates the costs and delays mentioned by Billman.

The supersedeas schedule. In response to Sunoco’s petition, Judge Labuskes scheduled a visit to the site of the pollution event for October 22 at 9:30 a.m. (I am writing this on the evening of the 22nd, so that visit presumably occurred this morning.)  The supersedeas hearing will take place on October 29, via WebEx. There is no indication of how long the judge will take to rule.

The ruling by Judge Lebuskes will be critical for Sunoco. If the judge upholds the DEP order, Sunoco will either have to reroute the pipeline or (I assume) appeal both the order and the judge’s ruling to Commonwealth Court. Either way, it will mean a substantial setback. If the judge overturns the reroute order, Sunoco will presumably be able to resume drilling as planned.

My summary: the reroute is “practicable” and necessary. The DEP issued the order to reroute the pipeline because Sunoco has showed that using the present route has caused pollution of Marsh Creek Lake and is likely to do so again if Sunoco is allowed to follow it. Nothing in Sunoco’s appeal is a convincing argument to the contrary.

As I look at the evidence provided by Sunoco, it seems to me that all the issues the company is complaining about are simply the expected outcomes of building a pipeline with a new route, a longer path, and a switch from HDD to open trench construction. Yes, these factors mean the reroute will take longer and cost more, but that does not make the reroute “impracticable”, as Sunoco is claiming. As Stephen Compton admits in his affidavit, the new route is perfectly feasible—just less convenient for Sunoco.

Sunoco’s supposed “losses” are based on a false premise. It is also worth emphasizing that the delays and associated financial losses that Sunoco is claiming it would suffer are fictional. Sunoco’s calculations are based on the assumption that ME2X would be operational by December 31, 2020, and ME2 would be operational by March 31, 2021, if it were not rerouted. Those completion dates are impossible.

Although Sunoco has shared those dates with its investors, they won’t happen (just as they haven’t happened after every completion date Sunoco has announced to investors over the last six years).  I am confident that Sunoco is well aware that the dates are impossible, regardless of what happens at Marsh Creek Lake.

The 16-inch pipe needed for ME2X is nowhere near complete in several other locations. Two critical ones are boring under Valley Stream in Exton and trenching at the “Glen Riddle Crossing” in Middletown. Both of those locations face serious construction issues. Until those issues are resolved, the December 31 completion date for ME2X is a daydream. Sunoco is pretending it will experience enormous (but “confidential”) financial losses due to the delays caused by rerouting ME2 at Marsh Creek.  Those “losses” are simply a fabrication using calculations based on false completion dates.

Postscript: should Sunoco be able to hide “confidential business information”? On October 21, Sunoco filed a “Motion for Protective Order” to be able to keep confidential the financial issues underlying the losses it claims the reroute would cause. It claims it has a right to a process whereby “confidential business information” (CBI) can be shielded from public view in the supersedeas hearing (which will be public).

The same day, the DEP’s lawyers responded that Sunoco has no such right in an Environmental Hearing Board hearing, and that in fact the EHB has an obligation under Pennsylvania law to make fully public any information on which its decisions are based.

The Environmental Hearing Board will have to resolve this dispute prior to the hearing.  

Update 10-26-20: Judge Labuskes has turned down Sunoco’s request for confidentiality of certain business information in this hearing. He writes:

“The Board denies an appellant’s motion for a protective order to keep certain information confidential during an upcoming hearing on the appellant’s petition for supersedeas. The appellant has not established a proper foundation for why certain monetary figures related to its pipeline project should remain confidential, and the appellant has failed to address the standard governing the presumption of openness of Board proceedings.”

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