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The Falcon Ethane Pipeline System is at the center of major investigations into possible noncompliance with construction and public safety requirements and failing to report drilling mud spills, according to documents obtained from the Pennsylvania Department of Environmental Protection (PA DEP) by FracTracker Alliance. These investigations, which are yet to be released, also uncovered instances of alleged data falsification in construction reports and Shell Pipeline Company firing employees in retaliation for speaking up about these issues.

3/17/21 Press release: https://www.fractracker.org/falcon-investigation-press-release-fractraccker-alliance/

Key Takeaways

• Shell’s Falcon Pipeline, which is designed to carry ethane to the Shell ethane cracker in Beaver County, PA for plastic production, has been under investigation by federal and state agencies, since 2019. The construction of the pipeline is nearing completion.
• Allegations in these investigations include issues with the pipeline’s coating, falsified reports, and retaliation against workers who spoke about issues.
• Organizations are calling on public agencies to take action to protect public welfare and the environment along the entire pipeline route through Ohio, West Virginia, and Pennsylvania.
• These investigations reveal yet another example of the life-threatening risks brought on by the onslaught of pipeline construction in the Ohio River Valley in the wake in the fracking boom. They also reveal the failure of public agencies to protect us, as documents reveal the federal agency that oversees pipeline safety did not adequately respond to serious accusations brought to its attention by a whistleblower.
• These new concerns are coming to light as people across the country are demanding bold action on plastic pollution and the climate crisis through campaigns such as Build Back Fossil Free, Plastic Free President, and Future Beyond Shell. On a local level, residents in the Ohio River Valley continue to shoulder the health burdens of the fracking industry, despite a recent ban on fracking in the eastern part of Pennsylvania, which a growing body of scientific evidence verifies. The Falcon Pipeline, which would transport fracked gas for plastic production, is directly at odds with these demands.

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Shell’s attempts to cut corners while constructing this 98-mile pipeline, likely motivated by the increasingly bleak economic prospects of this project, present serious public safety concerns for the thousands of residents along its route in Pennsylvania, West Virginia, and Ohio.

These allegations are serious enough to warrant immediate action. We’re calling on the Pipeline and Hazardous Materials Safety Administration (PHMSA) to thoroughly examine these allegations and suspend construction if not yet completed, or, in the case that construction is complete, operation of the Falcon Pipeline. Furthermore, we call on state environmental regulators to fully investigate construction incidents throughout the entire pipeline route, require Shell Pipeline to complete any necessary remediation, including funding independent drinking water testing, and take enforcement action to hold Shell accountable. Read our letters to these agencies here.

These investigations were featured in a March 17th article by Anya Litvak in the Pittsburgh Post-Gazette.

3/18/21 update:

Additional coverage of this story was published in a Times Online article by Daveen Ray Kurutz, a StateImpact Pennsylvania article by Reid Frazier, and an Observer-Reporter article by Rick Shrum.

Pipeline workers speak out

According to documents obtained through a public records request, a whistleblower contacted PHMSA in 2019 with serious concerns about the Falcon, including that the pipeline may have been constructed with defective corrosion coating. PHMSA is a federal agency that regulates pipeline operation. The whistleblower also shared environmental threats occurring within the DEP’s jurisdiction, prompting the PA DEP and Pennsylvania Attorney General’s Office to get involved.

Many of the issues with the Falcon relate to a construction method used to install pipelines beneath sensitive areas like roads and rivers called horizontal directional drilling (HDD). Shell Pipeline contracted Ellingson Trenchless LLC to complete over 20 HDDs along the Falcon, including crossings beneath drinking water sources such as the Ohio River and its tributaries. FracTracker and DeSmog Blog previously reported on major drilling mud spills Shell caused while constructing HDDs and how public agencies have failed to regulate these incidents.

Falcon Pipeline Horizontal Directional Drilling locations and fluid losses

This map shows the Falcon Pipeline’s HDD crossings and spills of drilling fluid spills that occurred through 3/5/2020. To see the data sources, click on the information icon found in the upper right corner of the map header as well as under the map address bar.

View Map Full Sized | Updated 6/16/20

 

PHMSA’s incomplete investigation

Correspondence between the PA DEP and PHMSA from February 26, 2020 reveal the gravity of the situation. While PHMSA conducted an inquiry into the whistleblower’s complaints in 2019 and concluded there were no deficiencies, PA DEP Secretary Patrick McDonnell wrote that his agency felt it was incomplete and urged PHMSA to conduct a more thorough investigation. Secretary McDonnell noted the PA DEP “has received what appears to be credible information that sections of Shell’s Falcon Pipeline project in western PA, developed for the transportation of ethane liquid, may have been constructed with defective corrosion coating protection,” and that “corroded pipes pose a possible threat of product release, landslide, or even explosions.”

FracTracker submitted a Freedom of Information Act request with PHMSA asking for documents pertaining to this inquiry, and was directed to the agency’s publicly available enforcement action webpage. The page shows that PHMSA opened a case into the Falcon on July 16, 2020, five months after Secretary McDonnell sent the letter. PHMSA sent Shell Pipeline Company a Notice of Amendment citing several inadequacies with the Falcon’s construction, including:

• inadequate written standards for visual inspection of pipelines;
• inadequate written standards that address pipeline location as it pertains to proximity to buildings and private dwellings;
• compliance with written standards addressing what actions should be taken if coating damage is observed during horizontal directional drill pullback; and
• inadequate welding procedures

Shell responded with its amended procedures on July 27, 2020, and PHMSA closed the case on August 13, 2020.

Of note, PHMSA states it is basing this Notice on an inspection conducted between April 9th and 11th, 2019, when construction on the Falcon had only recently started. PHMSA has con­firmed its in­ves­ti­ga­tion on the Falcon is on­go­ing, however we question the accuracy of self reported data given to PHMSA inspectors should be questioned

The PA DEP also brought the matter to the attention of the US Environmental Protection Agency.

Timeline of events in the Falcon investigation

Ohio and West Virginia

The Falcon pipeline also crosses through Ohio and briefly, West Virginia. While we do not know how these states are involved in these investigations, our past analyses raise concerns about the Ohio Environmental Protection Agency’s (OEPA) ability to regulate the pipeline’s HDD crossings.

One of the focuses of the Pennsylvania DEP’s investigation is the failure to report drilling fluid spills that occur while constructing a HDD crossing. The PA DEP shut down all HDD operations in November, 2019 and forced Shell to use monitors to calculate spills, as was stated in permit applications.

 

 

 

 

To our knowledge, the OEPA did not enforce this procedure, instead relying on workers to manually calculate and report spills. Shell’s failure to accurately self-report raises concerns about the safety of the Falcon’s HDD crossings in Ohio, including the crossing beneath the Ohio River, just upstream of drinking water intakes for Toronto and Steubenville, Ohio.

 

The Shell ethane cracker

The Falcon is connected to one of Shell’s most high-profile projects: a $6 billion to $10 billion plastic manufacturing plant, commonly referred to as the Shell ethane cracker, in Beaver County, Pennsylvania. These massive projects represent the oil and gas industry’s far-fetched dream of a new age of manufacturing in the region that would revolve around converting fracked gas into plastic, much of which would be exported overseas.

Many in the Ohio River Valley have raised serious concerns over the public health implications of a petrochemical buildout. The United States’ current petrochemical hub is in the Gulf Coast, including a stretch of Louisiana known colloquially as “Cancer Alley” because of the high risk of cancer from industrial pollution.

Construction of the ethane cracker and the Falcon pipeline have forged forward during the COVID-19 pandemic. In another example of the culture of fear at the worksite, several workers expressed concern that speaking publicly about unsafe working conditions that made social distancing impossible would cost them their jobs. Yet the state has allowed work to continue on at the plant, going so far as to grant Shell the approval to continue work without the waiver most businesses had to obtain. As of December 2020, over 274 Shell workers had contracted the coronavirus.

Weak outlook for Shell’s investment

While the oil and gas industry had initially planned several ethane crackers for the region, all companies except for Shell have pulled out or put their plans on hold, likely due to the industry’s weak financial outlook.

A June 2020 report by the Institute for Energy Economics and Financial Analysis (IEEFA), stated that:

Royal Dutch Shell owes a more complete explanation to shareholders and the people of Pennsylvania of how it is managing risk. Shell remains optimistic regarding the prospects for its Pennsylvania Petrochemical Complex in Beaver County, Penn. The complex, which is expected to open in 2021 or 2022, is part of a larger planned buildout of plastics capacity in the Ohio River Valley and the U.S. IEEFA concludes that the current risk profile indicates the complex will open to market conditions that are more challenging than when the project was planned. The complex is likely to be less profitable than expected and face an extended period of financial distress.

Many of Pennsylvania’s elected officials have gone to great lengths to support this project. The Corbett administration enticed Shell to build this plastic factory in Pennsylvania by offering Shell a tax break for each barrel of fracked gas it buys from companies in the state and converts to plastic (valued at $66 million each year). The state declared the construction site a Keystone Opportunity Zone, giving Shell a 15-year exemption from state and local taxes. In exchange, Shell had to provide at least 2,500 temporary construction jobs and invest $1 billion in the state, giving the company an incredible amount of power to decide where resources are allocated in Pennsylvania.

Would the state have asked Shell for more than 2,500 construction jobs if it knew these jobs could be taken away when workers spoke out against life-threatening conditions? Will the politicians who have hailed oil and gas as the only job creator in the region care when workers are forced to hide their identity when communicating with public agencies?

States fail to regulate the oil and gas industry

The PA DEP appears to have played a key role in calling for this investigation, yet the agency itself was recently at the center of a different investigation led by Pennsylvania Attorney General Josh Shapiro. The resulting Investigating Grand Jury Report revealed systematic failure by the PA DEP and the state’s Department of Health to regulate the unconventional oil and gas industry. One of the failures was that the Department seldom referred environmental crimes to the Attorney General’s Office, which must occur before the Office has the authority to prosecute.

The Office of Attorney General is involved in this investigation, which the PA DEP is referring to as noncriminal.

The Grand Jury Report also cited concerns about “the revolving door” that shuffled PA DEP employees into higher-paying jobs in the oil and gas industry. The report cited examples of PA DEP employees skirting regulations to perform special favors for companies they wished to be hired by. The watchdog research organization Little Sis listed 47 fracking regulators in Pennsylvania that have moved back and forth between the energy industry, including Shell’s Government Relations Advisor, John Hines.

National attention on pipelines and climate

The Falcon Pipeline sits empty as people across the nation are amping up pressure on President Biden to pursue bold action in pursuit of environmental justice and a just transition to clean energy. Following Biden’s cancellation of the Keystone XL pipeline, Indigenous leaders are calling for him to shut down other projects including Enbridge Line 3 and the Dakota Access Pipeline.

Over a hundred groups representing millions of people have signed on to the Build Back Fossil Free campaign, imploring Biden to create new jobs through climate mobilization. Americans are also pushing Biden to be a Plastic Free President and take immediate action to address plastic pollution by suspending and denying permits for new projects like the Shell ethane cracker that convert fracked gas into plastic.

If brought online, the Falcon pipeline and Shell ethane cracker will lock in decades of more fracking, greenhouse gasses, dangerous pollution, and single-use plastic production.

Just as concerning, Shell will need to tighten its parasitic grip on the state’s economic and legislative landscape to keep this plant running. Current economic and political conditions are not favorable for the Shell ethane cracker: financial analysts report that its profits will be significantly less than originally presented. If the plant is brought online, Shell’s lobbyists and public relations firms will be using every tactic to create conditions that support Shell’s bottom line, not the well-being of residents in the Ohio River Valley. Politicians will be encouraged to pass more preemptive laws to block bans on plastic bags and straws to keep up demand for the ethane cracker’s product. Lobbyists will continue pushing for legislation that imposes harsh fines and felony charges on people who protest oil and gas infrastructure, while oil and gas companies continue to fund police foundations. Shell will ensure that Pennsylvania keeps extracting fossil fuels to feed its ethane cracker.

The Falcon pipeline is at odds with global demands to address plastic and climate crises. As these new documents reveal, it also poses immediate threats to residents along its route. While we’re eager for more information from state and federal agencies to understand the details of this investigation, it’s clear that there is no safe way forward with the Falcon Pipeline.

Royal Dutch Shell has been exerting control over people through the extraction of their natural resources ever since it began drilling for oil in Dutch and British colonies in the 19th Century. What will it take to end its reign?

 

References & Where to Learn More

• FracTracker Petrochemicals & Plastics articles and imagery: https://www.fractracker.org/categories/by-content/petrochemicals/
• FracTracker Falcon EIA webpage: https://www.fractracker.org/projects/falcon-public-eia/
• FracTracker June 16, 2020 article Falcon Pipeline Construction Releases over 250,000 Gallons of Drilling Fluid in Pennsylvania and Ohio
• Future Beyond Shell Campaign: https://futurebeyondshell.org/ (see this campaign’s social media toolkit here)

Topics in this Article

Health & Safety | Legislation & Politics | Petrochemicals & Plastics | Pipelines