Aug 10 2011

Citizen Regulators 4

Day 29 & Counting:  No Spectra Energy Response to Stakeholders

Records Show Discharge of Industrial Waste, Drilling Mistake;

Property Owners Say They Were Promised

Gas Chromatography Test Results

Potential Gas Industry Role Model Found for Spectra Energy?


Map shows cluster of properties (#1-12) surrounding Spectra Energy's industrial compressor/underground storage facility with 13 injection/withdrawal wells.

Spectra Energy, recently cited by the feds for probable pipeline safety violations,1 remains absent from any meaningful conversation with concerned stakeholders in Pennsylvania.  Repeated phone calls and e-mails since July 12 receive no response.

Meanwhile, continuing issues raise questions about Spectra Energy’s performance at its Steckman Ridge compressor and underground natural gas storage facility in Clearville, PA, near the Maryland border.  Among the issues:

  • Gas chromatography test results – Why isn’t Spectra Energy sharing its complete gas chromatography test results of James and Karla Levy’s home and water well (number one on the map)?  Are the test methods flawed?  Or will the report show that Spectra Energy is producing gas from its storage wells?
  • Discharge of Industrial Waste – Spectra Energy’s SR 10 well, near the Levy property, was cited by the Pennsylvania Department of Environmental Protection (DEP) for a discharge of industrial waste onto the ground which subsequently polluted nearby water – probably Schaffer Creek.  This was two months after the well went into production, according to DEP and Federal Energy Regulatory Commission (FERC) records.
  • Drilling mistake – At Spectra Energy’s SR 11 injection/withdrawal well, the company drilled nearly 200 feet outside its permitted area into another formation and plugged the hole with cement to prevent gas migration, according to DEP records.

Gas Chromatography Tests

According to FERC and Property Owners James and Karla Levy, Spectra Energy asserts that its gas chromatography tests of the Levy’s home and water well show that natural gas is or was present, including methane.  It is allegedly not from Spectra Energy’s Steckman Ridge storage operation, according to what FERC and the Levys were told by the company.  To date, however, Spectra Energy declines to respond to a request from this writer for a copy of the test results which, presumably, would support its position.2

In fact, according to the Levys, Spectra Energy representatives promised them several times to provide copies of the test results; but they did not make good on that promise.  “I guess we were insanely naive to think they could possibly be ‘good neighbors’ since we are certain that there is still significant methane in our well,” says Karla Levy.

If there is no problem, what’s the problem with sharing test results?  Why won’t Spectra Energy representatives keep their promise to landowners?

This would be consistent with Spectra Energy’s public commitment to “integrity, transparency and accountability.”3

Unless the test results raise more questions.

For example, in addition to looking at test methods which may or may not be designed to produce non-matching samples,4 would its test results show that Spectra Energy is producing gas from its storage wells?

A source familiar with the natural gas industry says:  “Perhaps the reason Spectra Energy does not want to show the gas chromatography test results is because it will show more than methane such as butane, propane and other gases – in a way that could indicate that those injection/withdrawal wells are producing gas.”

Storing Gas or Producing It?

But why would Spectra Energy care if the public knew the injection/withdrawal wells were also producing native gas?  They can do this legally – even as they legally seized surface and subsurface property rights under the threat of eminent domain.  The power of eminent domain was granted to Spectra Energy by FERC.

And the Marcellus Shale “gold rush” will see more use of eminent domain in all of its forms as gas companies continue the land rush in Pennsylvania, New York and other states.

But it is not well known that FERC permits storage field operators like Spectra Energy to seek and to capture migrating gas — including “native” or new gas (not to be confused with “storage” gas).

Industrial Waste Spill at SR 10

Spectra Energy is on record as declaring, “Safety is our franchise.  It’s what we do.”  This proclamation is from Bill Yardley, Group Vice President of Spectra Energy.5

Despite that brand promise, in June of 2009, according to DEP records, Spectra Energy was cited for a violation of the Clean Streams Law when it discharged industrial waste at its injection/withdrawal well SR 10.  This is the injection/withdrawal well closest to the Levy water well.  DEP records cite a “Discharge of Industrial waste onto the ground (sediment runoff into stream).”6

Drilling Error – Gas Migration?

Spectra Energy’s SR 11 injection/withdrawal well went into service in April 2009.  Apparently in March, it drilled through the Oriskany formation into the formation below it.  The risk is that gas will migrate into other formations as Spectra Energy admitted in reports it is required to file with FERC.

Gas migration is a drilling problem acknowledged by geologists and government officials.  Recently, Joe Martens, New York State Commissioner of the Department of Environmental Conservation, said:

“Gas migration is the problem. … Poor cementing jobs were implicated in a lot of those cases where people ended up with gas in their [water] wells.”7

SR 11 is located on Glynn Needham’s property.  (Her property is not currently identified on the map but it is roughly between number 3 and 12 on the map.  One can see “Well SR 11” next to the yellow diamond shape.)  The company drilled through the Oriskany formation into the formation below it, according to DEP well completion reports and Spectra Energy’s biweekly report (submitted April 3, 2009).

According to Spectra Energy’s statement on its biweekly report:8 “… during well construction Steckman drilled into the Helderberg formation, directly below the Oriskany.”

Spectra Energy’s biweekly report continues (emphasis added):  “Steckman is scheduling a contractor to cement the 192-foot deep area within the Helderberg formation and expects to have this work completed in the next two to four weeks.  Cementing this 192-foot area will prevent any migration [of gas] into other formations.”

Find Role Model for Spectra Energy

Property owners surrounding Spectra Energy’s heavy industrial complex at Steckman Ridge seek answers to legitimate questions.  They are not ‘picking on’ the nearly $5 billion dollar Spectra Energy.

They are worried about a continuing pattern of health, water and operational concerns.  It is not corporate citizenship to refuse to respond to neighbors’ issues.  It is not corporate citizenship to promise to share gas chromatography test results then renege on that promise.

And despite corporate platitudes about safety, Spectra Energy does not have a best-in-class track record that might build confidence among neighbors.

Clearville residents know, for example, that a mere three years before Spectra Energy applied to FERC for permission to construct Steckman Ridge, an inferno exploded at another of its underground storage reservoirs outside of Houston called Moss Bluff.

According to public accounts, there were two explosions, a fire that burned for six-and one-half days sending flames as high as 1,000 feet, as 6 billion cubic feet of natural gas burned off in an uncontrolled release.  Fortunately, there were no fatalities; but there were two separate evacuations — 30 families in a one-mile radius followed by an evacuation of 100 people from a three-mile radius.

Steckman Ridge is about 3 miles from an elementary school.

We quoted Rich Liroff, Executive Director of the Investor Environmental Health Network, in part 3 who says, “companies must candidly address public concerns.”9

Constructive Request

Let’s end on a constructive note and offer Spectra Energy executives and directors a possible role model example from their own industry.

Liroff says, “Companies should also acknowledge reality and report when they fail to measure up to regulatory standards; for example, Talisman posts on its website the notices of violation it receives in Pennsylvania and its responses.”

He is referring to Talisman Energy USA, Inc., a natural gas exploration and production company, with a Canadian parent.  Here is the link to which Liroff refers: http://www.talismanusa.com/how_we_operate/notices-of-violation/

The Canadian connection might be helpful since Spectra Energy CEO Greg Ebel is a native of Canada.  Wouldn’t it be great if they speak the same language in terms of safety, integrity, transparency and accountability.

Links & Resources

1 Spectra Energy Cited by Feds for probable Pipeline Safety ViolationsNatural Gas Watch.org, July 27, 2011  http://www.naturalgaswatch.org/?p=744

This is a useful link because you can download the original documents from the government (Pipeline and Hazardous Materials Safety Administration) and Spectra Energy’s response – which seems to be summed up by, “Therefore, we are not contesting this finding.”  Ironically, the exchange of documents is to and from Andrew “Bitten by the Snake” Drake, Vice President of Transmission Services for Spectra Energy.  For context, see this post:  Bitten by the Snakehttp://www.spectraenergywatch.com/blog/?p=1214

2 Gas/Methane Venting from Property Owners’ Well – For reference on this incident, see the following post:  http://www.spectraenergywatch.com/blog/?p=1328

3 Integrity, transparency and accountability – Refer to the company’s 2009 Sustainability Report:  “We conduct our business with integrity, transparency and accountability.  Our corporate governance systems are designed to be transparent ….” Link: http://www.spectraenergy.com/our_responsibility/2009-Sustainability-Report/ensure_strong_corporate_governance/index.html

4 Gas chromatography test results can depend on a number of factors – For reference on testing methods that can produce non-matching results see the following post: http://www.spectraenergywatch.com/blog/?p=1353

5 “Safety is our franchise” – For the full context of Spectra Energy Group VP Bill Yardley’s assertion, see this post (footnote #1 under Links & Resources) – Spectra Butter Jobhttp://www.spectraenergywatch.com/blog/?p=753

6 SR 10 DEP Environmental Health & Safety Violation – Note the Violation ID number 565260 and date (6/11/2009) on both web pages.  The violation description on the first webpage (Pdf file 1) says, “Discharge of IW [Industrial Waste] to ground.”  The second webpage (link) says, “Discharge of pollultional [sic] material to waters of Commonwealth.”

Pdf File 1:  DEP Violation SR10 IW_WA

Link 2: http://www.ahs2.dep.state.pa.us/eFACTSWeb/searchResults_singleViol.aspx?InspectionID=1804132

7 Gas Migration – New York State DEC Commissioner Joe Martens made this comment during the Q&A following his July 1 press conference.  Refer to webcast of the DEC press conference, July 1, 2011 – http://at.pscdn.net/008/00198/11/dec/0701/#

See also NY Promises: http://www.spectraenergywatch.com/blog/?p=1321

8 Steckman Ridge Bi-Weekly Environmental Progress Report, April 3, 2009 – This form is submitted by Spectra Energy to FERC.  The last page of the document (p. 3 of 3) contains the admission of drilling through the Oriskany formation into the Helderberg formation.  Pdf file:  SR BiWeekly 4-3-09

9 The Real Story About the Risks of Fracking by Richard Liroff, July 18, 2011, published on GreenBiz.comhttp://www.greenbiz.com/news/2011/07/15/real-story-about-risks-fracking?page=0%2C2

NOTE: This article is cross-posted on the Accountability Central website at this link: http://www.accountability-central.com/nc/single-view-default/article/voices-from-the-shale-day-27-and-counting-no-spectra-energy-response-to-stakeholders/ Accountability Central is part of the Governance & Accountability Institute, Inc.

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