Whistleblower claims dangerous defects in pipeline for Shell’s Pennsylvania plastics plant

A whistleblower has alleged that the Falcon pipeline — a 98-mile-long fossil fuel pipeline that will soon feed Shell’s massive plastics manufacturing site under construction in western Pennsylvania — was built with defective protection against corrosion. That’s according to public records obtained by the nonprofitFracTracker Alliance and which reveal that state regulators complained last year that federal authorities had failed to adequately investigate the reports of defects.

In that letter, dated February 26, 2020, obtained by FracTracker via a right-to-know request, Patrick McDonnell, secretary of the Pennsylvania Department of Environmental Protection, wrote to the nation’s top pipeline safety regulator describing “a very serious public safety matter for Pennsylvania.”

“The Pennsylvania Department of Environmental Protection (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,” McDonnell wrote, adding that PA DEP had obtained and sent federal pipeline regulators additional information “which appears to corroborate the whistleblower’s original allegations.”

The letter appears to be the first public reference to allegations that the Falcon pipeline’s corrosion protection may be faulty. FracTracker also obtained a log of over a hundred emails and documents apparently related to one or more informants on Falcon, largely involving discussions between attorneys with the PA DEP and other state and federal agencies. The state declined to provide FracTracker with the documents listed in that log, though it did provide a summary of the contents of each communication and indicate who was involved, in some cases providing full names of state officials, in others listing a “Confidential Informant.”

The February 2020 letter outlines serious concern among state regulators. “While PA DEP does not regulate the construction, maintenance or operation of the pipeline itself, our staff was alarmed by the whistleblower’s allegations,” McDonnell wrote, “and concerned for the safety of people living along the pathway of the Falcon Pipeline.”

The letter asserts that federal authorities had done an inadequate job of responding to the whistleblower’s allegations, despite the dangers posed when anti-corrosion coatings on pipelines fail. “Corroded pipes pose a possible threat of product release, landslide, or even explosion,” McDonnell added.

But, he went on, the federal Pipeline and Hazardous Materials Safety Agency (PHMSA) conducted only a “brief inquiry in 2019” that reported finding no coating problems. “PA DEP believes PHMSA’s initial inquiry was incomplete,” McDonnell continued, “and has referred the matter to other authorities for investigation of the safety of the corrosion protection on the Falcon Pipeline.”

The letter also makes mention of other allegations against the pipeline builder, including “falsification of records and reports, and retaliatory firings and other actions by Shell.”

A Shell spokesperson told DeSmog that on March 1, 2021, the Occupational Safety and Health Administration (OSHA) dismissed an OSHA whistleblower claim linked to the Falcon pipeline, writing that “OSHA is unable to conclude that there is reasonable cause to believe that a violation of the statute occurred.” It is not clear whether those allegations were made by the same individual or individuals who made allegations about the pipeline coating. A U.S. Environmental Protection Agency (EPA) official told State Impact that it was not currently investigating the Falcon pipeline, and a representative of the Pennsylvania Office of the Attorney General had also declined to comment. PHMSA has recently said its investigation remains open.

“Residents of the Ohio River Valley know too well the serious and life-threatening impacts that have come from rushed pipeline construction in the wake of the fracking buildout,” said Erica Jackson, manager of community outreach and support for FracTracker Alliance. “Of particular concern with the Falcon Pipeline is the allegation of defective pipeline corrosion coating, as FracTracker has found that corrosion failure is the second leading cause of incidents for hazardous liquid pipelines like the Falcon.”

Turmoil at DOT

The PA DEP letter from McDonnell was addressed to Howard Elliott, a former freight rail executive appointed as the PHMSA administrator by then-President Donald Trump in 2017, and copied to others including Trump’s Secretary of Transportation Elaine Chao and several congresspeople representing House committees related to pipelines and oversight.

Elliott would soon find himself embroiled in a very different controversy. In May 2020, he took the extraordinary step of also assuming the role of the Department of Transportation (DOT) acting inspector general — a watchdog role designed to provide independent oversight — while remaining in his role at the helm of PHMSA, which is part of the DOT.

That move stunned staff inside the department, Roll Call later reported (although Elliott promised to recuse himself from any investigations of PHMSA) and sparked outrage from independent watchdog organizations. Elliott left both offices with the departing Trump administration and earlier this month the DOT Office of Inspector General released a scathing report on Secretary Elaine Chao, Elliott’s former boss, faulting her for using her public office in ways that benefited her family business.

PHMSA, now under new leadership, has said that its Falcon investigation remains underway. “We looked into the con­cerns raised by the DEP but the re­sults are not yet avail­able,” a PHMSA spokesperson told the Pittsburgh Post-Gazette.

Falcon ‘in Service’ Soon

A Shell spokesperson told DeSmog that Falcon “exceeds safety requirements,” adding that the pipe was thicker than required, buried an extra foot deep, and includes more shut-off valves than PHSMA requires.

“The robust design and responsible installation of the Falcon pipeline has been supported by numerous inspections,” spokesperson Curtis Smith said in an email. “Falcon meets or exceeds all safety standards and regulatory requirements and we look forward to the day it’s fully operational.”

That day may come soon. Shell said that Falcon installation is now completed and that the company expects to place it “in service” sometime in the next two months. The company does not plan to fully utilize the Falcon pipeline until its massive plastics manufacturing plant, still under construction in Beaver County, Pennsylvania, is also completed, which Shell projects will occur in 2022.

Questions about the safety of new pipelines may be fresh in the mind for some in western Pennsylvania. In September 2018, Energy Transfer’s Revolution pipeline, which also runs through the western Pennsylvania region, exploded after just one week in service. Earlier this month, the PA DEP allowed that pipe, rebuilt after more than two years of construction mishaps and difficulties, to resume carrying natural gas.

Falcon experienced a significant number of difficulties during its construction, including a series of issues during the horizontal direction drilling process used to install pipelines underwater crossings and other places where digging a trench is difficult. An anonymous tipster separately claimed that one allegedly under-reported spill in Ohio in December 2019 involved a “release of drilling fluids/industrial waste in the range of millions of gallons,” though the company denied that allegation.

That location continued to experience difficulties even after Shell modified its construction plans at the site of the alleged large spill. In July, Ohio state regulators issued a notice of violation to Shell Pipeline Co. over “an unauthorized discharge of water mixed with bentonite [clay]” at that same location, which the agency said, “resulted in sediment entering an emergent wetland” and a creek.

Problems with corrosion have previously been faulted in pipeline failures — including pipelines carrying natural gas, condensate, and water. “Internal corrosion is the main factor that affects the safety of natural gas pipelines,” one 2018 article in the journal Materials explains. “It can reduce the thickness of thick walls, reduce the strength of pipelines, and lead to leakage accidents.”

“Our region’s water has already been contaminated by the Falcon Pipeline spilling over 250,000 gallons of drilling fluid in Pennsylvania and Ohio, and the pipeline isn’t even operational yet,” Jenn Wood, a spokesperson for area environmental group People Over Petro, said in a statement. “If safety precautions and regulations have already failed this dramatically, we fear for the heightened risk our communities will be forced to shoulder when the pipeline is transporting highly flammable ethane.”