Shell’s Falcon Pipeline Dogged by Issues with Drilling and Permit Uncertainty During Pandemic

A DeSmogย investigation found that the pipeline’s construction has been plagued by drilling and permitting problems.
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Over the past few months, amid the COVID-19 pandemic and stay-at-home orders, Shell Pipeline Company has pressed onward with the construction of a 97-mile pipeline running through Ohio and western Pennsylvania. Shell plans to use the Falcon pipeline to supply its $6 billion plastics plant currently being built in Beaver County, Pennsylvania,ย with ethane, a raw material pulled from shale wells in the state and from neighboringย Ohio.

A DeSmogย investigation found that Falconโ€™s construction has struggled with drilling problems and has continued evenย while one key water-crossing for the pipeline lacked state or federal permits. During that same time, vast numbers of other businesses in both states โ€” including the Shell plastics plantย itself โ€” were forced to slow or stop activities in efforts to combat the spread of the deadlyย coronavirus.

Throughout March and into April, Falcon was missing permits from state or federal regulators. Problems during a process known as horizontal directional drilling (HDD), which Shell attempted to use to install the Falcon pipeline under an Ohio creek called Wolf Run, forced the company to change its construction plans, and those permits had not yet been approved when the pandemic hit theย region.

Then, on April 15, just nine days after Falcon secured its final missing state permit, the legal status of its construction was again thrown into question, this time by events halfway across the country. A federal court hearing a challenge to the Keystone XL pipeline in Montana tossed out a nationwide permit issued for Falcon and many other oil and gas pipelines, finding that this particularย permitting program failed to meet the standards of the nationโ€™s cornerstone environmentalย laws.

While appeals in that case remain pending, the U.S. Army Corps of Engineers was ordered to stop authorizing activities for new oil and gas pipeline construction under those permits until those legal questions were resolved. On Thursday, May 28, the Ninth Circuit rejected a request to put that order on hold until it issues its decision in that case. The Army Corps and Keystone XL‘s backers โ€œhave not demonstrated a sufficient likelihood of success on the merits and probability of irreparable harm to warrant a stay pending appeal,โ€ the court wrote.

Since the early days of its construction, Shellโ€™s Falcon pipeline has encountered construction difficulties, according to public records from Ohio and Pennsylvania environmental regulators obtained by FracTracker Alliance and Fair Shake Environmental Legal Services and reviewed byย DeSmog.

Oil and gas companies like Shell face a broad array of challenges when crisscrossing Appalachia with new fossil fuel infrastructure. The regionโ€™s hills and mountains mean that fossil fuel pipelines must traverse steep slopes where slips and landslides can cause pipelines โ€” like Energy Transfer’s Revolution pipeline โ€” to rupture andย explode.

But while much attention has focused on the risks of the above-ground terrain, pipeline installers must also contend with coal countryโ€™s pocketed and fissured underground geology and its latticework of active and abandoned undergroundย mines.

When pipelines are run beneath roads, rivers, and other places where itโ€™s not feasible to simply lay the pipe in a ditch and then bury it, pipeline builders use horizontal drilling to bore holes through which pipes can be drawn. During that drilling, the fluids used can leak into fractures or voids underground, rupture out above ground, and even displace pollution left behind by earlier waves of fossil fuelย extraction.

Since construction began in March 2019, Shell reported over 70 losses of drilling fluid below ground, involving over a quarter million gallons of drilling mud on theย pipeline, an analysis by FracTracker found. In at least 20 of those incidents, the โ€œlostโ€ drilling fluid was discovered to have ruptured up from below ground, spilling over 5,500 gallons on theย surface.

And those numbers may be conservative, the records suggest. Pennsylvania regulators discovered in November 2019 that Shell had failed to properly monitor incidents during pipeline construction, and in December, Ohio regulators discussed discrepancies between numbers the pipelineโ€™s builders reported in differentย contexts.

‘In the range of millions ofย gallons’

On Januaryย 14, an unusual email arrived in the inbox of Erica Jackson, a community outreach specialist at FracTracker Alliance,ย aย nonprofit focused on sharing oil and gas industry data and analysis. The email claimed there had been an accident during Falconโ€™s construction at a site Shell had dubbed SCIO-06, about an hourโ€™s drive west from FracTrackerโ€™s Pittsburghย office.

โ€œI would like to inform you about a release of drilling fluids/industrial waste in the range of millions of gallons from Shellโ€™s HDD SCIO 06 in Springfield Township, Jefferson County, OH,โ€ the emailย began.

โ€œThe Springfield Township and the Jefferson County Engineering office should be notified as should the OEPA [Ohio Environmental Protection Agency] as I do not believe they have been informed of the full volumes of the industrial waste releases based on actual meter readings. (I believe they have only been provided with โ€˜estimatesโ€™ that minimize the perceived impact.),โ€ the email, signed only with a pair of initials,ย read.

The tip named three property owners nearby, suggesting that each would โ€œneed to be notified of this contamination potential to their drinking water and that of theirย livestock.โ€

The next day, Jackson and Josh Eisenfeld, marketing director at the nonprofit environmental law firm Fair Shake, visited the location described in the email. Photographs they took that day appear to show the waters of Wolf Run Creek runningย bright blue and with a trail of clumps of grayish mud lining a channel leading down towards the water.ย Clots of the mud were visibleย clinging to branches low to theย ground.

Strage blue waters in Wolf Run Creek in Ohio
Photograph of Wolf Run Creek on Januaryย 15, 2020, which was posted by Fair Shake on its Facebook page. Credit: Joshย Eisenfeld

Jackson and Eisenfeld shot photos and took water samples from the creek. Then they contacted Ohio environmental regulators and reported what they hadย seen.

The following day around 2:30 p.m.,ย two officials from the Ohio Environmental Protection Agency (OEPA)ย arrived at the site, where they met up with Shellโ€™s Falcon pipeline workers. Neither FracTracker nor Fair Shake were invited toย join.

โ€œThe material appeared to be consistent with nearby ditch cleaning activities,โ€ the inspection report concluded, listing โ€œnothing foundโ€ under the heading โ€œreleasedย material/products.โ€

Ditch leading to Wolf Run Creek in Ohio
Photograph of a ditch leading to Wolf Run Creek on January 15, 2020, which was posted by Fair Shake to its Facebook page. Credit: Joshย Eisenfeld

Fair Shake said it is still investigating what happened that day. But documents later obtained by open records requests show that at the time, Shell and Ohio regulators both knew that things at the SCIO-06 crossing, about a half-mile from whereย Jackson and Eisenfeld took photos, had hardly been going to plan. SCIO-06 had been dogged by a problem that drillers call โ€œloss of circulation,โ€ where drilling mud seems to disappear belowย ground.

โ€œThe only way we would have found out about this is by asking the right questions,โ€ said Eisenfeld. โ€œIn Ohio, the only way you’d know is if you did what we did and file a right to know request, and you’d have to ask specifically. There is no required public notification for loss ofย circulation.โ€

‘Itโ€™s in the Wolf Run area, near deepย mines’

It was July 25, 2019 โ€” about six months before Jackson and Eisenfeld arrived at Wolf Run โ€” when Shell first started trying to drill at the SCIO-06 site, the documentsย show.

Within a week, Shell had experienced its first incident at SCIO-06, losing what the company estimated to be 200 to 550 gallons of drilling mud somewhereย underground.

โ€œSean [Larson with Shell] confirmed with me that he would not have to call the spill hotline since none of the material has daylighted,โ€ Maggie Selbe, an Ohio EPA official, wrote in an email to others at the agency. A half hour later, she sent her supervisor Shellโ€™s risk assessment for SCIO-06. โ€œItโ€™s in the Wolf Run area, near deep mines,โ€ sheย wrote.

So-called โ€œlosses of circulationโ€ arenโ€™t all that uncommon during pipeline construction. The fluids lost during that kind of shallow directional drilling are generally nontoxic and consist mostly of water and bentonite clay (the same clay as in kittyย litter).

But in some recent cases, releases of drilling mud have nonetheless caused water wells to be contaminated, wetlands and lakes to be sullied, and toxic pollution in abandoned coal mines to beย dislodged.

The coal mining industry’s legacy pollution in Appalachia can cause new issues during pipeline installation. In Novemberย 2018, the Pennsylvania Department of Environmental Protection had fined a different pipeline builder, EQT, for drilling into an abandoned mine in nearby Allegheny County. EQTโ€™s HDD accident displaced a category of pollution known as abandoned mine drainage, pushing roughly 4 million gallons of the coal industryโ€™s waste into the Monongahela River, regulatorsย found.

Drilling fluids can also surface in hard-to-see places. On Januaryย 16, Pennsylvania announced a $1.95 million fine for Mariner Eastโ€™s builders after discovering that the pipeline company hadnโ€™t reported the loss of 3 million gallons of drilling fluid during HDD drilling โ€” including 208,000 gallons that wereย later discovered to have broken through the ground at the bottom of a lake, caking 8 acres of the lake bottom, harming the lake’s wildlife, and prompting concern about invasive species (which the company was ordered to address).

Lost pipeline drilling fluids can cause problems even when they remain below ground, a situation which regulators often classify as a โ€œloss of circulation,โ€ rather than a more serious โ€œinadvertent return.โ€ On March 28, during construction of the Permian Highway pipeline in Texas, a 36,000 gallon loss of circulation left several households, including a home belonging to two doctors working during the pandemic, unable to use their household water wells. (In April, two local environmental groups filed an intent of suit over the incident, alleging that the drilling mud’s โ€œmodifiedโ€ bentonite clay included a potentialย carcinogen.)

Shell had been warned before construction started that some of itsย bores, including at SCIO-06, were likely to present problems. An April 2, 2018 planning document filed by Shell notes that when engineers drilled a test bore at SCIO-06, they noted โ€œthere may be a potential for drilling fluid loss either into the formation or to the surface when drilling through this geologic unitโ€ and recommended that drillers beย prepared.

Environmental groups had also raised the issue of the regionโ€™s pocketed geology in public comments objecting to Falconโ€™s permit, citing incidents during the construction of the deeply troubled Mariner East pipeline project. โ€œAs of March 2018, the construction of Mariner East 2 has resulted in 99 inadvertent returns (IRs) and numerous sinkholes, and as of August 2017, over 200,000 gallons of spilled fluids in 42 distinct locations,โ€ Earthworks, an environmental advocacy group, wrote in public comments on April 17, 2018. โ€œLike the Mariner East 2, the Falcon pipeline would traverse fragile karst topography, which increases the likelihood of IRs andย sinkholes.โ€

Over the past year, Falconโ€™s route has become dotted with losses of circulation. They occurred at 17 of the 23 named sites where Shell attempted horizontal directional drilling, the documents show, including one Pennsylvania site where Shell reported over 90,000 gallons lost belowย ground.

Shell reported at least 20 inadvertent returns, including an 800 gallon release into a Pennsylvania wetland and a 1,500 gallon incident that spilled into two Pennsylvania streams and anotherย wetland.

While many abandoned coal mines in Appalachia aren’t well-mapped, FracTracker found that some of Falcon’s largest incidents occurred over the top of known abandoned coalย mines.

FracTracker map of the Falcon pipeline path, ethane cracker construction, inactive coal mine locations, and sites of drilling fluid releases
FracTracker map of the Falcon pipeline path, plastics plant (โ€œethane crackerโ€) construction, inactive coal mine locations, and sites of drilling fluid releases.ย 
Credit: FracTrackerย Alliance

‘Could exceed 3,000,000ย gallons’

It’s not clear from the documents exactly how large the losses of circulation at SCIO-06 ultimatelyย became.

โ€œAccording to the electronic notes on record with Ohio EPA, the total loss reported is 7,191 gallons,โ€ James Lee, an Ohio EPA spokesperson, told DeSmog, referring to fluid losses at SCIO-06.

In August 2019, an Ohio EPA official had visited SCIO-06 and reported back to his agency that the fluid losses that month were greater than Shell had letย on.

โ€œTo that point the total loss of fluid was 21,950 gallons including [loss control materials] โ€” more than Sean [Larson, Falcon’s HDD coordinator] had reported previously,โ€ he wrote in an email to others at Ohio EPA, adding that company representativesย โ€œmay have contacted nearby residents regarding drinking waterย wells.โ€

Responsibility for accurately measuring falls on the company, Ohio EPA indicated. โ€œThe Agency works with permittees and, when necessary, conducts enforcement in order to ensure compliance with the permits as well as environmental rules and laws,โ€ Lee said, adding that OEPA does not require public notices for inadvertent returns. โ€œThe Ohio permit requires the permittee to develop protocols for monitoring drilling pressures, circulation and loss of fluids to underlying formations. Ohio EPA permits are written to be protective of human health and theย environment.โ€

โ€œTheir permit seems to be lenient as far as what they even have to report to the Ohio EPA,โ€ Fair Shakeโ€™s Eisenfeld told DeSmog. โ€œIt allows them to lose a lot of fluid underground before they are required to tell the Ohio EPA. And when they do have to tell them, there’s still not very many requirements as far as what the Ohio EPA has to do in response to that, if nothingย surfaces.โ€

In Pennsylvania, Falconโ€™s permit required Shell to use electronic data recorders to monitor lost fluids โ€” but state regulators discovered that Shell hadnโ€™t installed that equipment. In November last year, they ordered the company to temporarily stop drilling until that wasย fixed.

That same month, in Ohio, Shell returned to SCIO-06 โ€” and again the company struggled to complete the drill. Itย reported the loss of over 15,000 gallons during two incidents inย November.

By early December, Shell notified Ohio EPA that the company was concerned itย might not be able to make the SCIO-06 HDD work. Ohio asked Shell to estimate how bad fluid losses might get if drillingย continued.

โ€œOverall mud loss to the formation could exceed 3,000,000 gallons under these assumed scenarios,โ€ Shellโ€™s engineering firm reported in a Decemberย 10 memo, under a heading indicating that โ€œThe numbers below are a very conservative scenario based on the current level of fluid loss occurring on the drill that would be expected for the remainder of theย crossing.โ€

โ€œTomorrow we have a call with Shell,โ€ an Ohio EPA officialย wrote on Decemberย 17. โ€œThey are moving the rig to the other side of the hole, estimating a loss of fluid up to 3 million gallons, and requesting the private well owner to monitor the turbidity.โ€ A flurry of redacted emailsย followed.


Ohio EPAย emails released as part of an open records request show redactions during December 17, 2019 discussion of issues with Falcon pipelineย construction.

It is clear that problems continued as Shell resumed drilling in January this year. On January 12, Shell reported a 4,583 gallon loss of circulation at SCIO-06 โ€” three days before Jackson and Eisenfeld arrived onย site.

โ€œShell has, throughout the entire construction of the Falcon Pipeline, implemented industry-recognized best practices and, in many cases, exceeded regulatory requirements,โ€ Curtis Smith, a Shell spokesman, said in response to questions fromย DeSmog.

โ€œThat approach was evident [in] nearby Jefferson County, Ohio, where Shell voluntarily modified its installation plan to provide greater environmental protections,โ€ Smith continued. โ€œBefore pausing drilling activities in that area there was no return of fluid to the surface.ย In cases when nontoxic drilling fluid has returned to the surface or downhole circulation lost, there have been no impacts to drinking water supplies. As required by law, accurate counts of discharge were reported to the appropriateย agencies.โ€

โ€œRegarding the claim of an unreported mud spill, an Ohio EPA investigation determined the claims asserted by NGOs were false and that the Falcon Pipeline Project had nothing to do with the incident,โ€ he said. Shell declined to specify how many gallons had been lost at SCIO-06. The anonymous tipster had claimed up to 3 million gallons were lost by theย company.

By the tail end of January, Shell appears to have thrown in the towel on making horizontal directional drilling workย at SCIO-06, notifying state and federal regulators that they’d be changing their plans. And on February 14, the company submitted applications to Ohio and the U.S. Army Corps of Engineers for a redesign of Falconโ€™s route at SCIO-06, using a water-crossing permit known as the Nationwide Permitย 12.

Nationwide Permit 12ย Nullified

In a Montana federal courthouse on March 6, 2020, while Falconโ€™s SCIO-06 permit was still pending, a half-dozen civic groups faced off with advocates for the fossil fuel industry and the builder of the Keystone XL pipeline, in arguments in a case dubbed Northern Plains Resource Council v. U.S. Army Corps ofย Engineers.

At the heart of the dispute: Nationwide Permit 12 (NWP12), a permit used for water-crossings that has in recent years drawn the ire of environmental groups who view its expanded use during the Obama and Trump administrations as a tactic to fast-track construction without an adequate environmental review. Since 2017, NWP12 has been used over 37,000 times for a broad array of projects including major pipelines like Keystone XL.

While the court deliberated, Falconโ€™s SCIO-06 application was approved by the Army Corps on March 17. Then, five days later, on March 22, Ohioโ€™s governor announced a stay-at-home order to slow the spread of the COVID-19 pandemic. Shell decided to continue Falconโ€™s construction despite the pandemic, the Pittsburgh Business Times reported on March 26, even as it suspended most activities at the plasticsย plant that Falcon would ultimately feed. Falcon still lacked its Ohio SCIO-06 authorization, which arrived on Aprilย 6.

Then, on April 15, the Montana court issued its order โ€” and upended the pipeline and construction industries across the U.S. NWP12 falls short of the standards set by federal environmental laws, the court found, and nullified the permit. Roughly 360 applications were immediately put on hold as the Corps instructed its offices to await furtherย guidance.

The ruling was soon narrowed to apply only to pipelines, and an appeal before the Ninthย Circuit remains pending. But already, environmentalists have begun to challenge other pipeline projects that rely on NWP12. On April 30, the Sierra Club filed a lawsuit citing this caseย in a dispute over the Permian Highway pipeline inย Texas.

The ruling may have also thrown Falconโ€™s permit status into question. โ€œThe Amended Order only applies to new pipeline construction,โ€ Emily Collins, an attorney for Fair Shake, said in an email to DeSmog, โ€œwhich is an unclear direction since the underlying case relates to a pipeline that has startedย construction.โ€

Itโ€™s not yet clear what impact the Keystone XL case will ultimately have on Falcon. But if NWP12โ€™s nullification does affect Falcon, that would mean that construction had moved forward without valid permits during theย pandemic.

And because of the SCIO-06 problems, from the time that Ohioโ€™s shelter-in-place order was issued to the time of the Keystone XL order, Falcon had permit coverage across its full span for less than two weeks from mid-February to earlyย April.

Many other fossil fuel and petrochemical pipeline projects whose legal status is unchallenged have drawn fire from opponents for moving forward on construction during the pandemic. โ€œIs it essential, for example, to build pipelines to keep communities moving toward improved energy and manufacturing?โ€ a March 26 E&E News article asked. โ€œOr is that just keeping multinational oil companies on their profitย schedule?โ€

In May, attorneys general from 10ย states and the District of Columbia called on the Federal Energy Regulatory Commission to stop issuing new approvals for pipelines and other fossil fuel infrastructure โ€œuntil the end of the COVID-19 crisis.โ€ Neither Pennsylvania nor Ohio signed onto that May 7 letter.

Ohio EPA told DeSmog that decisions about what businesses could continue to operate during the pandemic fell to other parts of the state or local governments. โ€œBusiness activities at the local level (concerning pandemic-related health orders) fall under the jurisdiction of state and local health departments and other local authorities,โ€ Leeย said.

A Shell spokesperson said that, while construction along Falcon may have continued elsewhere, the company did not conduct activities at SCIO-06 that were not covered by valid permits at theย time.

โ€œAgainst the backdrop of uncertainty caused by the ongoing global pandemic, Falcon crews did not continue construction in Jefferson County until legally cleared to do so,โ€ Smith told DeSmog. โ€œWe will only work where authorized and will continue to comply with all federal, state, and local laws as they relate to COVID-19.ย Weโ€™re proud of the progress made by the Falcon team and look forward to responsibly completing theย project.โ€

Main image: Wolf Run Creek on Januaryย 15, 2020, asย posted by Fair Shake on its Facebook page.ย Credit: Joshย Eisenfeld

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Sharon Kelly is an attorney and investigative reporter based in Pennsylvania. She was previously a senior correspondent at The Capitol Forum and, prior to that, she reported for The New York Times, The Guardian, The Nation, Earth Island Journal, and a variety of other print and online publications.

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