Sinkhole caused by Mariner East pipeline (Fractracker/Eric Friedman)
Opponents of a controversial Pennsylvania pipeline project are hoping that state regulators will uphold a judge’s decision to suspend the project. But the regulators’ extensive ties to the oil and gas industry raise serious concerns about conflicts of interest that may tilt the regulators toward favoring Sunoco, the pipeline company.
The Mariner East pipeline project – a series of pipelines that transport, or will transport, fracked gas from the Marcellus and Utica shale areas throughout Pennsylvania from west to east – was halted by a Pennsylvania judge on May 24. The judge said the pipelines represent a risk to public safety in Chester County, Pennsylvania, after repeated instances of pipeline construction creating sinkholes, the spilling of drilling fluid into waterways and private land, and other problems.
Now, Pennsylvania Governor Tom Wolf’s selections to the Pennsylvania Public Utilities Commission (PPUC) are set to decide on whether or not to allow the resumption of operations of Mariner East 1, a functioning pipeline, and the resumption of construction on Mariner East 2 and 2X. Sunoco and its parent company Energy Transfer Partners are asking the PPUC to overturn the halt, while Chester County commissioners and many residents want the PPUC to uphold the suspension.
However, as our new report shows, the PPUC’s decision may be tainted by conflicts of interest among commissioners, a majority of whom have ties to Pennsylvania’s oil and gas industry, including to Sunoco. The report, released last Friday, highlights the numerous relationships that 4 of 5 commissioners have to the fracking industry in Pennsylvania and, specifically, to the company behind the Mariner East project. This raises the serious question of how impartial a majority of commissioners – who built careers tied to the interests of the oil and gas industry – can be in regulating that same industry.
Among other findings in the report are that Commissioner Norman J . Kennard is the former law partner of one of the attorneys representing Sunoco in the Mariner East case before the PPUC. Kennard was a partner at the firm Hawke, McKeon, Sniscak & Kennard (now called Hawke, McKeon & Sniscak) until around a decade ago. Kennard’s former partner, Thomas Sniscak, is currently representing Sunoco in its Mariner East proceedings. This means that Commissioner Kennard will be ruling on a case brought by his former law partner representing Sunono and the pipeline project.
The report also finds that Commissioner David W. Sweet was a registered lobbyist for numerous fossil fuel companies – including EQT, Kinder Morgan, Koch Companies, NRG, and Philadelphia Energy Solutions – until 2015. Sweet is a former senior advisor on economic and energy policy to Governor Wolf, and he was part of the legal team that worked on behalf of the private equity firm Carlyle Group to arrange it acquisition – with Sunoco – of Philadelphia Energy Solutions, the largest oil refining complex on the eastern seaboard. After becoming 2/3 owner of the company with Sweet’s help, Carlyle Group raided PES, throwing it into hundreds of millions of dollars in debt while channelling at least $151 million in payments to itself – all while refusing to pay tens of millions in state taxes.
Another commissioner, Andrew G. Place, was recently a top executive at EQT Corporation, the biggest US natural gas company. Place, who is the PPUC Vice Chair, served as EQT’s Corporate Director of Energy and Environmental Policy from March 2011 until October 2015, when he joined the PPUC.
Place also helped establish the Center for Sustainable Shale Development (now the Center for Responsible Shale Development) and served as its Interim Executive Director. While the CSSD sells itself as a collaborative non-profit between oil and gas companies and green groups that issues certifications aimed at making fracking safe and sustainable, it is largely funded and led by the fracking industry. We reported on this in 2013 and 2014; our first report, which revealed that Robert Vagt, the president of the Heinz Endowment, a major CSSD funder, was on the board of Kinder Morgan, led to his resignation from the board and the Heinz Endowment.
The report also reveals that Commissioner Coleman is a director and officer of SilcoTek, which makes coatings for the oil and gas industry. It is unknown if SilcoTek has done business with any companies that have come before the PPUC while Coleman has been on it.
The report also shows that three of five commissioners are tied to the Marcellus Shale Coalition (MSC), the preeminent fracking industry coalition in Pennsylvania – and through the MSC, to Sunoco, whose parent company, Energy Transfer Partners, is on the MSC board. Commissioner Sweet was a registered lobbyist for three corporations that are MSC members, and Sweet was also partner at the Harrisburg office of Buchanan Ingersoll & Rooney, which is a MSC member. As mentioned, Commissioner Place was a senior executive at EQT, a MSC executive board member, and his wife is also an attorney at Reed Smith, a law firm that is a MSC member. Furthermore, one of Commissioner Kennard’s former firms represented EQT as recently as 2012, when Kennard was was still a firm partner (it’s unknown if the firm still represents EQT).