HARRISBURG, Pa. -- The developer of a major pipeline system that connects the Marcellus Shale gas field in western Pennsylvania to an export terminal near Philadelphia pleaded no contest Friday to criminal charges that it systematically polluted waterways and residential water wells across hundreds of miles.
Dallas-based Energy Transfer Operating agreed to independent testing of homeowners' water and promised to remediate contamination in a settlement of two separate criminal cases brought by the Pennsylvania attorney general. Under a plea deal, the company will also pay $10 million to restore watersheds and streams along the route of its Mariner East pipeline network.
"We are holding Energy Transfer accountable for their crimes against our natural resources," Attorney General Josh Shapiro said at a news conference after the hearing in Harrisburg.
An Energy Transfer spokeswoman called the $10 million fund “not a fine or penalty of any kind but the product of a voluntary collaboration” with the state.
“While we understand Mr. Shapiro is running for office, it remains disappointing that he would mischaracterize the facts of this voluntary agreement to his political advantage rather than acknowledge the good faith efforts of Energy Transfer to resolve this dispute,” the spokeswoman, Laura Atchley, said in an email.
The company’s Mariner East 1, Mariner East 2 and Mariner East 2X pipelines carry propane, ethane and butane from the Marcellus and Utica shale gas fields to a refinery processing center and export terminal in Marcus Hook, a suburb of Philadelphia. Construction wrapped in February.
Mariner East has been one of the most penalized projects in state history. The owner has racked up tens of millions of dollars in civil penalties, and state regulators repeatedly halted construction over contamination.
The attorney general stepped in last October, charging Energy Transfer with releasing industrial waste at 22 sites in 11 counties and failing to report spills to regulators. The company fouled the drinking water of at least 150 families, prosecutors have said.
Under the plea agreement, residents who live near the pipeline and have private water can request independent testing. More than 800 residents along the pipelines’ route have been notified of the testing, and residents have until Aug. 19 to sign up.
Residents were wary of the plea deal, given their fraught history with Sunoco Pipeline LP, the Energy Transfer subsidiary that operates Mariner East.
“I'm hopeful, but knowing Sunoco’s track record, I am skeptical,” said Karen Katz, of Edgmont Township in Delaware County. She said Sunoco strong-armed residents into signing agreements to allow the pipeline, tore up the neighborhood during construction, and fouled the aquifer. She said she still does not drink her well water.
“How do you take contaminated aquifers and un-contaminate them? How many years does that take?” Katz said.
Energy Transfer's state permits already require it to fix the damage its pipeline construction caused. But prosecutors said the plea deal goes a step further by requiring the company to submit to water testing by geologists picked by the attorney general’s office. Previously, Energy Transfer itself had been testing water.
The company must abide by the independent experts’ recommendations on how to restore the fouled water, prosecutors said.
Another part of the plea deal requires Energy Transfer to pay $10 million to address contamination of groundwater and streams.
The money is a drop in the bucket to a pipeline company with surging profits. Energy Transfer reported this week that its net income jumped 90% in the second quarter, to $1.33 billion, as the company’s pipelines carried record volumes of natural gas liquids.
Shapiro, a Democrat running for governor, has long complained that Pennsylvania’s criminal environmental laws are too weak. His office said the statutory maximum for the crimes for which Energy Transfer was charged amounted to only $1.45 million, making a plea deal more beneficial to victims than taking the case to trial.
“Even if we had won every single count at trial, Energy Transfer would've walked away paying just pocket change for their crimes," Shapiro said Friday. "Nothing more would have come to make our water cleaner and safer, and residents would've been screwed.”
The Pennsylvania Energy Infrastructure Alliance, a trade group, said that most of what it called Mariner East’s “construction woes” had already been addressed by regulators.
“Hopefully this brings closure to the issue, because it’s time to put the past to rest,” said the group, adding that Mariner East is operating safely.
Residents who live near the pipeline and some state lawmakers have said Mariner East should be shut down entirely, but the administration of Democratic Gov. Tom Wolf has ignored such calls.
Friday's plea deal also resolves a separate criminal case involving the 42-mile Revolution pipeline near Pittsburgh, which runs from Butler County to a natural gas plant in Washington County. In that case, prosecutors alleged Energy Transfer's negligence led to a 2018 explosion and fire that destroyed a home, a barn and several cars, collapsed transmission towers, and prompted an evacuation.
Energy Transfer pleaded no contest to 14 criminal counts in the Mariner East case and to nine criminal counts in the Revolution case.