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Federal and state regulators are investigating a whistleblower’s tip that Shell used defective corrosion coatings on its Falcon pipeline, which will feed the company’s Beaver County ethane cracker. 

The tip ping-ponged its way through state and federal agencies, according to a February 2020 letter from Pennsylvania Department of Environmental Protection Secretary Patrick McDonnell to a top federal pipeline safety official. 

The letter states the DEP was also aware of alleged falsification of records and retaliatory firings in connection with the complaint. 

LISTEN to Reid Frazier discuss his reporting with Kara Holsopple


McDonnell sent the letter to Howard Elliott, then-administrator of the federal Pipeline and Hazardous Materials Safety Administration, or PHMSA, and copied then-Department of Transportation Secretary Elaine Chao, and three members of Congress with oversight of pipeline safety. According to the letter, PHMSA had conducted a “brief investigation” into the whistleblower’s corrosion complaint and found no deficiencies. 

But McDonnell said DEP staff believed PHMSA’s investigation was “incomplete” and that DEP had “referred the matter to other authorities for investigation.”

“Our staff was alarmed by the whistleblower’s allegations and concerned for the safety of people living along the pathway of the Falcon Pipeline,” the letter stated. “These are very serious allegations, they deserve thorough investigation and appropriate resolution.”

The letter was among documents obtained through a Right-to-Know request by the environmental group FracTracker Alliance, which released them Wednesday. The DEP says it’s still investigating. (Disclosure: FracTracker receives funding from The Heinz Endowments, which also funds The Allegheny Front.)

In addition to the original whistleblower, the letter says DEP was aware of “other witnesses reported to have first-hand knowledge of bad corrosion coatings, falsification of records and reports, and retaliatory firings and other actions by Shell.” 

Communication with Federal Agencies

A log of correspondence provided by FracTracker shows DEP communicated about the pipeline complaints with PHMSA, which oversees pipeline safety and construction, the federal Occupational Safety and Health Administration (OSHA), which investigates worker complaints, the U.S. Environmental Protection Agency, and the Pennsylvania Office of Attorney General.

An EPA spokesman said the agency “is not conducting an investigation of the Falcon pipeline at this time.”

The route of the Falcon Ethane Pipeline through Ohio, West Virginia, and Pennsylvania. Image: FracTracker Alliance.

The 98-mile Falcon pipeline was built to feed ethane to Shell’s Monaca, Pa. ethane cracker, which is under construction and is expected to open next year. The pipeline is complete and Shell is repairing the right-of-way, the DEP said. 

It goes through parts of Pennsylvania, Ohio, and West Virginia. 

The investigation began when a whistleblower informed PHMSA about alleged problems with corrosion protection along the pipeline, the letter states.

PHMSA then referred information from the whistleblower about environmental problems along the pipeline’s route.

During that investigation, McDonnell states, DEP became aware of “additional information relating to the corrosion protection allegations.”

The DEP oversees pipeline issues of erosion and drilling mud spills that affect the state’s rivers and streams.

DEP spokesman Neil Shader said the agency is still investigating those issues on the pipeline, and that DEP believes PHMSA investigators “have taken these concerns seriously.”

PHMSA did not respond to several requests for comment from StateImpact Pennsylvania. But a spokesperson told the Pittsburgh Post-Gazette that the agency’s investigation is ongoing. Pennsylvania Attorney General Josh Shapiro’s office declined to comment. 

Erica Jackson, manager of community outreach at FracTracker, said her group began looking into the Falcon when it received an anonymous tip that it was being investigated. 

Shell Ethane Cracker

Shell Ethane Cracker, September 21, 2020. Photo: Reid Frazier / The Allegheny Front

It’s especially concerning, the accusations about workers being laid off for reporting concerns or workers falsifying reports,” Jackson said. “These accusations were out there as construction was happening, so how many issues occurred that weren’t reported or weren’t covered or that were covered up?”

Shell Says Falcone Is Safe

Curtis Smith, a spokesman for Shell, said the pipeline is complete but not yet in service. He said it “meets or exceeds all safety standards and regulatory requirements.”

He said it uses thicker pipe than required, and is buried at least 4 feet, deeper than its 3-foot requirement.

Smith said as part of its corrosion prevention, the company’s inspectors tested the pipeline’s coatings “to ensure their quality and adherence to the pipe” and that it had pressure-tested and inspected all welds along the route using “tools such as automated ultrasound and X-ray equipment.” 

Smith said the whistleblower’s complaint was dismissed by OSHA. An OSHA spokeswoman confirmed a com­plaint by a whis­tle­blower fired from the Fal­con proj­ect by one of its con­trac­tors was dis­missed March 1.

Corrosion Is a Major Safety Concern

Corrosion is a major pipeline safety concern for regulators. Over the last 20 years, corrosion was listed as the cause for 2,177 pipeline safety incidents, or 17 percent of all pipeline incidents, according to PHMSA data.

Those incidents, which include any release of gas that resulted in injury, property damage, or large releases of oil and gas, were responsible for seven deaths and 52 injuries, and $1 billion in damages. In 2016, investigators found evidence of corrosion at a natural gas pipeline that exploded in Westmoreland County, seriously injuring one man.

Shell is building the Beaver County plant with help from a variety of tax breaks, including a $1.65 billion tax credit from the state. 

It will turn the region’s ethane, a component of natural gas, into plastics. 

This story is produced in partnership with StateImpact Pennsylvania, a collaboration among The Allegheny Front, WPSU, WITF and WHYY to cover the commonwealth's energy economy.