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[We at Spectra Energy are] ‘Steadfast in our belief that this process needs to be as open, honest and publicly transparent as possible’
Marylee Hanley, Spectra Energy’s Director of Stakeholder Outreach
Slick words from a Spectra Energy executive who publicly touts the company’s
“continual communication and …. Discussion with stakeholders to address their issues and concerns.” By stakeholders, the company means landowners living near its facilities.1
Yet six months after a two-day incident in March at its huge Steckman Ridge facility in Bedford County, Pennsylvania, Spectra Energy still refuses to publicly say how much methane (toxic volatile organic compounds) was vented in an uncontrolled release and why it happened.
Through their own efforts, however, property owners now know that Spectra Energy’s uncontrolled leak in this latest incident amounts to 431.5 thousand cubic feet of natural gas vented to the atmosphere over a two-day period.2
Enough natural gas to power five homes in the Northeast for a year, according to the Energy Information Administration of the U.S. Department of Energy. Hardly a “small volume” as Spectra Energy officials claim.
Moreover, documents from the Pennsylvania Department of Environmental Protection (DEP), reveal that the uncontrolled release was tied to a malfunctioning electronic level switch in a dehydration unit.
No wonder the federal Pipeline & Hazardous Materials Safety Administration (PHMSA) is citing valve and other problems across many parts of Spectra Energy’s system and leveling 6-figure fines.3
In contrast to the company’s alleged “steadfast … belief” in open communication, Spectra Energy initially dismissed concerns of residents in Clearville (Bedford County), PA, who called 911 in March after hearing firecracker-like noises and seeing what appeared to be smoke coming from the company's compressor station.
The same Marylee Hanley, Director of Stakeholder Outreach for Spectra Energy – who piously touts the company’s commitment to a communication process “as open, honest and publicly transparent as possible” – declared to the Associate Editor of the Bedford Gazette, "Nothing was released. There was no smoke. No incident.” 4
In fact, Hanley said that the only thing that was released was “air,” according to the Bedford Gazette.
By the next day, the company was forced to retreat: It admitted there was an uncontrolled release of methane and other hydrocarbons; but claimed only a "small volume" escaped.
Broken promises and repeated uncontrolled release of toxic volatile organic compounds (VOCs) raise questions about whether Canadian-born CEO Greg Ebel knows how often Spectra Energy managers fail to do what the company says it does.
CEO Ebel has never publicly commented on the four years of ongoing problems at the Steckman Ridge facility. Nor has he ever visited with property owners – the company’s stakeholders – to demonstrate his own “steadfast belief” in a communication process “as open, honest and publicly transparent as possible.”
Risk Management at Spectra Energy
The U.S. Securities and Exchange Commission (SEC) repeatedly reminds directors at publicly held companies like Spectra Energy (NYSE: SE) that they have an obligation to oversee their company’s risk management and risk strategy and to identify both risks and opportunities for improvement.
In 2010, I wrote to the Board of Directors about the risk related issues at the Steckman Ridge facility – all of which have been covered by this website. On behalf of the Board, General Counsel Reginald Hedgebeth replied. Among his key points [emphasis added]:
“I want to assure you that Spectra Energy’s Board is aware of the various items you reference in your letter. … Spectra Energy maintains a robust risk management process … that ensures … the Board of Directors is actively involved in overseeing strategic and operational risks….”
“With respect to your concerns regarding the Steckman Ridge storage facility” -- here he cites the oversight of federal and state regulators such as the Federal Energy Regulatory Commission, PA DEP, PHMSA, and the US EPA.
Interestingly, Counsel Hedgebeth goes on to write: “Further, Spectra Energy has taken a number of steps at the Steckman Ridge facility to respond to community concerns. Mechanical and operational changes have been made to reduce the noise associated with station activities. In addition, we have minimized our lighting and planted over 400 trees around the facility.”
Spectra Energy isn’t running a tree farm in Clearville, PA. The company’s stakeholders ask questions about substantive issues and get noise reduction, lighting and trees.
Nothing has changed since 2010. The Board’s cosmetic response to ongoing operational problems (shutdowns, blowdowns, uncontrolled methane leaks and valve problems) is as empty as management platitudes about “steadfast belief” in transparency, accountability and stakeholder engagement.
There is an increasing level of safety and environmental risk taking by management. A reasonable person would ask how long can Board members get away with tolerating it?
Spectra Energy's huge Steckman Ridge facility is the elephant in the room in Clearville, PA. It is a 12-billion cubic feet underground natural gas storage reservoir on 43 acres, with a nearly 5,000 horsepower compressor station, 13 injection/withdrawal wells and related pipeline infrastructure.
It stores and pumps shale gas through transmission pipelines across Pennsylvania and the Northeast. Spectra Energy and its pipeline division, Texas Eastern, are pushing to expand its presence in Pennsylvania, Ohio, New Jersey and other states.
Meanwhile, a ring of health, water and operational complaints surround the Steckman Ridge facility that began operations in 2009.
Compressor technology is not new, so why do engineers like Ken Shutter and Dwayne Teschendorf (who work for Spectra Energy CEO Greg Ebel) have so many problems at this facility? Does Ebel know or is he indifferent? Is the Board of Directors likewise indifferent?
For example, based on unofficial record keeping by neighbors (a/k/a, Spectra Energy stakeholders), there have been nearly 60 shutdowns, blowdowns and related incidents at the Steckman Ridge compressor station between August 2009 (which included the first, big emergency shutdown) and more recent incidents in March and September 2013.
Per the compressor itself, according to a 2009 response from Spectra
Energy (the company no longer responds to stakeholder questions), the compressor station houses one 4,735 horsepower reciprocating compressor.
This unit includes a 16-cylinder, natural-gas powered engine that drives a
6-cylinder gas compressor used to support injection and withdrawal of
natural gas into the underground storage field (located in the
Oriskany formation) by boosting pressure when and where necessary.
Planting trees is not the answer. But CEO Ebel and his Board of Directors know that, don’t they?
Mike Benard is a property owner in Pennsylvania and a former gas lease owner; and he is founder of Spectra Energy Watch (in transition now to Shale Property Rights), a property rights blog that deals with the energy industry. Link: http://www.shalepropertyrights.com/blog/
Links & Resources
1 Spectra Energy: Expanding Infrastructure – Presentation to Marcellus Summit by Marylee Hanley, Spectra Energy’s Director of Stakeholder Outreach; Sponsored by the Interstate Oil & Gas Compact Commission at Penn State University (November 17, 2011). See pdf file: <media 3020>Hanley.pdf </media>(14 pages),” and refer to p. 10 under “Outreach.”
2 Memo provided by Pennsylvania Department of Environmental Protection in which Spectra Energy details the uncontrolled release of 431.5 thousand cubic feet of methane and other hydrocarbons (Volatile Organic Compounds or VOCs), and its cause. See pdf file: “<media 3019>DEP SE Steckman Ridge March 2013 Release.pdf</media>”
3 PHMSA issued Spectra Energy CEO Greg Ebel a "Final Order" and civil penalty of $134,500 related to violations across several states. Among other issues, the company was cited for failure regarding valve inspections. PHMSA states: "An operator that fails to follow its own procedures for valve inspections increases the risk of preventable pipeline accidents.” Issued in December 2012. Reference Link: http://www.phmsa.dot.gov/staticfiles/PHMSA/DownloadableFiles/420121009_Final%20Order_12212012.pdf
4 Spectra Energy Retreats on Methane Incident – Accountability Central, April 1, 2013,