Spectra Energy Watch

Toxic PCBs Are Still With Us;

Spectra Energy Acknowledges PCB Contamination

Toxic PCBs (polychlorinated biphenyl) still contaminate Spectra Energy’s Texas Eastern pipeline system - 30 years after the probable human carcinogen was banned.

This is evident from the company’s filings with the federal government and even from its job postings.

For example, in a required filing with the U.S. Securities and Exchange Commission (SEC), Spectra Energy acknowledged that it has toxic PCB (polychlorinated byphenyl) contamination in its pipeline systems:

“…the internal surfaces of some of our pipeline systems are contaminated with PCBs, and liquids and other materials removed from these pipelines must be managed in compliance with such regulations.”

Spectra Energy’s 10-K Form - Lots of Info

These and other acknowledgements of risk are found in the “10-K” annual report that Spectra Energy filed with the SEC on February 27, 2009.  Publicly held corporations like Spectra Energy are required to file a Form 10-K every year.  The 10-K is filled with a wealth of information and once it is filed with the SEC, it becomes public information.

Link: http://google.brand.edgar-online.com/DisplayFilingInfo.aspx?Type=HTML&text=%2526lt%253bNEAR%252f4%2526gt%253b(%22PAUL+M%22%2C%22ANDERSON%22)+%2526lt%253bOR%2526gt%253b+%2526lt%253bNEAR%252f4%2526gt%253b(%22PAUL+M.%22%2C%22ANDERSON%22)&FilingID=6443897&ppu=%2FPeopleFilingResults.aspx%3FPersonID%3D1914234%26PersonName%3DPAUL%2520M.%2520ANDERSON

Here, for example, is the excerpt referring to Spectra Energy’s PCB contamination under Environmental Matters (p. 20).  It reads (emphasis added):

• “The Toxic Substances Control Act, which requires that polychlorinated biphenyl (PCB) contaminated materials be managed in accordance with a comprehensive regulatory regime.  Because of the historical use of lubricating oils containing PCBs, the internal surfaces of some of our pipeline systems are contaminated with PCBs, and liquids and other materials removed from these pipelines must be managed in compliance with such regulations.”

When Spectra Energy hires environmental specialists, knowledge of PCBs is part of the job description.  For example, a recent Environment Health & Safety (EHS) job opening for “Specialist - EHS Associate” lists among the duties and responsibilities:

“Work on TSCA [Toxic Substances Control Act] Projects including but not limited to PCB reclassification/declassification of tanks and pipelines and management of PCB material.”  Link:  job-openings-us-spectra-energy

Two of three recent EHS job openings in Houston specifically mention PCBs.

Spectra Energy’s Group Vice President of Internal and External Affairs Toni Beck, previously said:  “We tested the lubricating oil from [Bedford County, PA] Steckman Ridge’s August shut down, and no PCB’s were detected.   If at any point other liquids are collected, we will test them as well.”

Testing the lubricating oil is necessary but not sufficient.

Test Pipeline Liquids for PCBs

Did the company test the liquids in ALL piping drains that pick up the pipeline liquids at the compressor station and the injection/withdrawal pipeline?  If so, what were the results?

When asked about testing the pipeline liquids, Ms. Beck replied (emphasis added):  “The liquid separators are designed to collect pipeline liquids from the gas stream to prevent potential PCBs from moving into the new system. To date, there have been no pipeline liquids collected at Steckman Ridge. If we do, those liquids would be tested for PCB concentrations prior to disposal.”

In other words, the pipeline liquids going into the Steckman Ridge underground gas storage field have neither been collected nor tested.  Why is this important?

There are three ways that such contaminated liquids can appear and escape a pipeline/compressor station system, according to a source knowledgeable about such operations.

The components of natural gas inside a pipeline can form a liquid; OR liquids are brought into the pipeline from a third-party interconnection; OR oils and greases are released from compressor stations, pipeline valves, or other processes.  It is the liquids and oils that pick up the PCBs; and if there is a release of liquid or oil from a contaminated system, it will contaminate the environment.

Release to the environment of toxic PCBs could occur in three ways:

1) Maintenance or Repairs: Contaminated liquids can escape the system when the company “opens” the system for repairs or routine maintenance.  Liquids can also be released during blowdown operations that take place prior to working on the system or other processes.

2) Cleaning “Pigs”: Liquid releases can take place when the company runs so-called “cleaning pigs” through the system because it is necessary to release gas from the system at the last stage of this operation before removing the cleaning pigs from the system.

3) Automation: When the automated system at Steckman Ridge or similar compressor stations or other types of facilities tells the valve to open and release gas through the blowdown stack.

What About the Water Aquifer?

On top of all of that - an important question arises regarding the integrity of an underground natural gas storage field or reservoir.  The question is whether liquids contaminated with PCBs or other toxic chemicals are introduced into the storage reservoir itself.

If the underground gas storage reservoir is near water aquifers, everything depends on the reservoir being perfectly sealed from other reservoirs and aquifers and able to contain the contamination.

Experts know that gas migrates underground.  There are multiple examples in Pennsylvania, to cite just one state, of improperly sealed well casings.  Gas and any contaminants migrate.

The town of Dimock, Pennsylvania, is a frightening example of out-of-control contamination of water supplies.  This is a place with exploding water wells and polluted ground and drinking water.  See our December 2 post on “Marcellus Powerball.”  Link: http://www.spectraenergywatch.com/blog/?p=494

Frankly, the history of PCB contamination involving Spectra Energy compressor stations via its Texas Eastern pipeline division is staggering.  For additional background, see the November 18 post, “Spectra PCBs? (part one).  Link: http://www.spectraenergywatch.com/blog/?p=480

Today’s Texas Eastern pipeline is nearly 9,000 miles long with 73 compressor stations, according to the company’s 10-K filing with the SEC.

Don’t Eat the Fish

An internet search turns up several examples of citizens and/or regulatory agencies monitoring PCB concentrations that were disposed of in waste pits near compressor stations by Spectra Energy’s Texas Eastern pipeline division.

For example, the Mississippi Department of Environmental Quality (DEQ) has been testing for PCBs on two rivers in the Pearl River basin for roughly 20 years.

According to a DEQ technical report published in 2004:

“During the time that PCBs were in use at the compressor station [near Kosciusko and operated by Texas Eastern], PCBs were disposed of by placing the waste in pits which migrated to Conehoma Creek and the Yockanookany River.”  (Executive Summary, p. 4 of print document, p. 5 of pdf file)  Link:  pearlrbconehomayockpcbjan04

According to the Mississippi DEQ report, “Fish tissue samples from Conehoma Creek and the Yockanookany River have shown concentrations of PCBs elevated above safe levels for consumption.”  (Executive Summary, p. 4 of print document, p. 5 of pdf file)

A phone call to DEQ’s Office of Pollution Control verified that the fish consumption advisory continues to this day - warning citizens to limit their consumption of fish from areas on two rivers because of the continued presence of PCBs.

EPA ‘Celebrates’ Spectra Energy

Spectra Energy’s PCB contamination is singular in many ways, making public questions and monitoring more than appropriate.  For example, on the Environmental Protection Agency’s website, there is “A Look at EPA Accomplishments:  25 Years of Protecting Public Health and the Environment.”

Forty-four accomplishments are celebrated over a 25-year period - from the banning of DDT and phasing out lead in gasoline to the first community right-to-know law.

Within that lengthy list, only two companies are cited by name.  The first is Spectra Energy via its Texas Eastern pipeline division.  The citation for 1990 reads:

“EPA assesses a penalty of $15 million - the largest single civil penalty in the Agency’s history [at that time] - against Texas Eastern Gas Pipeline Company, for extensive PCB contamination at 89 sites.  In addition to the fine, the company is required to pay for PCB cleanups estimated to exceed $750 million.”

The only other company cited by name is Exxon, for its Exxon Valdez oil spill.  For reference, here is the link: http://www.epa.gov/history/topics/epa/25b.htm

The challenge for the gas industry and Spectra Energy is whether past performance is an indicator of current and future behavior.

Betting on the Marcellus Play:

Gas Royalties in Your Future?

How ‘Bout Clean Water?

Choose Wisely

Landowners and communities are raising questions about the problem and the opportunity of drilling the gas-rich Marcellus Shale.

The Marcellus Shale is generally described as a geological formation about 8,500 feet below the surface of the earth that runs through Pennsylvania, New York, West Virginia and Ohio.  Technology such as horizontal drilling and hydraulic fracturing now make it profitable to extract gas from this formation; and experts say there is a lot of gas there.

But while a multi-million dollar national advertising campaign by the energy industry touts natural gas as the clean burning fuel, the process for getting natural gas out of the ground is far from clean.

So folks are looking for advice:  To drill or not to drill … to lease or not to lease?  What can I expect from potential drilling activities on my property, if I decide to lease?

As one property owner said, a lot of people want to bet on the “Marcellus Powerball” and hope they win the lottery in the form of lucrative royalty payments from a gas lease.

But hope isn’t a strategy, and daydreams aren’t reality.  So landowners and public officials must educate themselves and choose wisely; because whatever decision you make, you will own the consequences - good or bad.

The Marcellus Shale with its hydraulic fracturing and chemical stew is a high-stakes game.  Never bet what you can’t afford to lose.  Like clean water, property value, health.

Educate Yourself & Talk to Your Neighbors

There are lots of information resources out there, but where do you look among industry, government and academic sources to name three.  Consider all of these but always ask yourself, “What is in this organization’s self interest?”

And listen to the voice of landowners who have been through the experience.

Here’s a quick look at two resources - academic and landowners who have been there, done that.

First, check out a report published this year on “the impact of Marcellus Shale gas extraction.”  It is an illustrated, easy-to-read tutorial on what to expect.

Titled, Hancock & The Marcellus Shale, the 40-page booklet was produced by a graduate seminar at Columbia University’s Urban Design Program in the Spring of 2009.  It is available as a downloadable pdf file: <http://www.osiny.org/custom/HancockAndTheMarcellusShale.pdf>

The title refers to Hancock, NY, a village near the northeast corner of the Pennsylvania border.

The report acknowledges that the opportunity to sign natural gas leases and receive royalty payments looks good to many property owners.  That money “would allow for mortgages to be paid off, children to go to college and lifelong dreams to be realized,” the document notes.  ["You Decide" - p. 34 of print document; p. 38 of pdf file]

It begins with a sobering assessment:  “Today, extracting natural gas from the Marcellus Shale … does not even receive the same level of review required by [the village of] Hancock [NY] for a single residential dwelling plan where local, State and Federal criteria must be met regarding well, septic and adjacent wetland.” ["Preface" - p. 1 of print document; p. 5 of pdf file]

Among the issues, according to the report:

1) How much water do you have - A single, typical horizontal well in the Marcellus Shale will require from 1.5 million to 9 million gallons of water during the 4-6 weeks of hydraulic fracturing that takes place.  ["Water Withdrawal," p. 10 of print document; p. 14 of pdf file]

2) One-third or more of that water becomes contaminated waste water - “Typically, 30 to 40% of the water used for drilling and fracturing returns to the surface highly contaminated.”  The contamination includes toxic fracking chemicals, metals, suspended solids, oil and grease.  ["Waste Water & Disposal," p. 10 of print document; p. 14 of pdf file]

According to the report - as some landowners already know - “gas companies will likely pump waste water into on-site pits to evaporate in the open air.  These pits are constructed with plastic liners, susceptible to punctures and often overflow during heavy rainfall.”  ["Waste Water & Disposal," p. 10 of print document; p. 14 of pdf file]

Dimock, PA - Landowners’ Nightmare

Coincidently, the report also devotes several pages to Dimock, PA, which is across the Delaware river and about 35 miles from Hancock, NY.  Dimock is a textbook example of what you don’t want to happen on your property or in your community.

A 23-page consent order filed November 4, 2009 by the Pennsylvania Department of Environmental Protection (DEP) cites Cabot Oil and Gas Corporation for “unlawful conduct” that includes:

• Exploding water wells
• Polluting fresh ground water and drinking water
• Improper and/or insufficient cement well casings which allow natural gas to migrate where it should not go (into homes and water wells)
• Discharge of drilling mud, an “industrial waste,” onto the ground or into the water

Among other actions, Cabot was ordered to:

• Provide the affected residents with “water in amounts sufficient to continually satisfy water usage needs until … [the DEP] has determined that the … Water Supply has been restored ….”
• Correct the improper well casings and cement in order to stop gas migration
• Civil penalty of $120,000 with the possibility of additional fines

Details and a copy of the DEP consent order can be found on the website of the Damascus Citizens for Sustainability (DCS), a grassroots group in Damascus, PA.  Link: http://www.damascuscitizens.org/aquifer-contaminated.html

Energy Companies & Marcellus

Energy companies are also betting on the Marcellus Powerball.

For example, Spectra Energy recently announced a “binding agreement” between its Texas Eastern pipeline division and Range Resources (”the leading Marcellus Shale producer”) to move Appalachian natural gas “to premium markets in the Northeast.”

Press Release Link: http://investors.spectraenergy.com/phoenix.zhtml?c=204494&p=irol-newsArticle&ID=1355645&highlight=

You can bet these companies act only in their own self interest - never mind the community relations platitudes gas companies love to use with landowners and public officials.

Test your water before they bring a single piece of equipment on your property.  Invest in an evaluation of your water that includes testing for any byproducts related to gas operations.  You’ll want proof of the baseline quality of your water, if it changes later.

One property owner told me that such a test cost him $900.  This is an important investment in your property and your health.  Any property with contaminated water is a nightmare scenario.  And don’t let the gas company do the testing for you.

Never Confuse a Business Acquaintance with a Friend

At the end of the day, if you decide to sign a drilling lease, remember this is a business transaction.  It is not about making a new friend who is going to give you money and leave your property in pristine condition.

Do not behave like white meat on the turkey because the gas companies and their landmen will pick you and your property clean.  Be as tough minded as they are (even behind their buttery smiles).

After all, they are not doing you any favors.  You own the key asset they covet. Make them earn it; and do everything you can to protect your property and your health.

Ask about (and investigate) the company’s track record, because they are going to be “living” on your property.  You want more information than what is in their glossy brochures.  Tell them to identify in writing their top three environmental and safety penalties in your state and nationally (including any that are under investigation where penalties have not yet been decided).

If they say they have none — make them put that in writing too.  Full disclosure is what you are after.

Make sure your lease is very specific about the protection of your property; about what the gas company can do on your property and what it cannot do; where it can operate equipment and where it cannot operate equipment.

Contact landowner groups through their websites (see “Links & Resources” below).  Download and read the report from Columbia University, Hancock & the Marcellus Shale.

Arm yourself with information so you are in a position to make the best decision on behalf of yourself, your family and your property.  Once you sign the lease, the time for any amendments or changes is over.

Links & Resources

Worth reading: Hancock & The Marcellus Shale, 40-page booklet from Columbia University’s Urban Design Program, published in the Spring of 2009.  Easy-to-read, illustrated report on what to expect.  Available as a downloadable pdf file: <http://www.osiny.org/custom/HancockAndTheMarcellusShale.pdf>

Damascus Citizens for Sustainability (DCS): The home page of an active and well organized grass roots group working to protect the upper Delaware Basin Watershed: http://www.damascuscitizens.org/index.html

Four steps to consider before signing a gas lease - based on a 1^st person radio interview on WHRW-FM, Binghamton University:http://www.spectraenergywatch.com/blog/?p=455

Industry Lobbying, Public Relations & Advertising:  IRS Disclosures Show Extent of Oil & Coal Groups’ Outreach (November 18, 2009).  The industry is telling its story, that’s why it’s important to listen to the voice of landowners.http://www.eenews.net/public/Greenwire/2009/11/18/1