Marcellus Shale Driller Hit with Record Fine for Water Contamination

Chesapeake Energy, a major natural gas driller in Pennsylvania’s Marcellus shale, has been assessed a record fine for contaminating private water wells in Bradford County. The Pennsylvania Department of Environmental Protection (DEP) also fined Chesapeake for a tank fire that occurred in February at a natural gas well site in Washington County. Together, the two fines total more than $1 million.

The fines once again highlight the dangers of hydraulic fracturing, or fracking, a natural gas drilling technique which involves blasting a mix of water, chemicals and sand into shale rock formations to shake loose natural gas deposits.

“It is important to me and to this administration that natural gas drillers are stewards of the environment, take very seriously their responsibilities to comply with our regulations, and that their actions do not risk public health and safety or the environment,” DEP Secretary Mike Krancer said in statement released yesterday.

The state fined Chesapeake $900,000 for the Bradford County water contamination incidents, which Krancer said was the largest single penalty his agency has ever assessed against an oil and gas operator. Throughout 2010, the DEP had investigated complaints from residents of Bradford County’s Tuscarora, Terry, Monroe, Towanda and Wilmot townships near Chesapeake’s shale drilling operations. Regulators ultimately determined that because of improper well casing and cementing in shallow zones, natural gas from non-shale shallow gas formations had experienced localized migration into groundwater and contaminated 16 families’ drinking water supplies, the DEP statement said.

In addition to the fine, Chesapeake has entered into a Consent Order and Agreement that requires it to, among other things, remediate the contaminated water wells. A portion of the fine – $200,000 – will be dedicated to the DEP’s well-plugging fund, which funds the agency’s Oil and Gas program operations. According to the DEP statement, that fund can be used to mitigate problems in cases where the source of the gas cannot be identified.

According to a report from the Wilkes-Barre Times Leader, the Bradford County water contamination was the result of the same type of well casing problems that allowed methane gas to contaminate water wells in the Susquehanna County town of Dimock. In that incident, the state initially ordered another driller, Cabot Oil & Gas, to construct a pipeline to connect 18 homes to a municipal water supply. But then in December, Cabot and the DEP agreed instead to a $4.6 million settlement that, among other things, requires Cabot to offer and pay to install whole-house gas mitigation devices in the affected homes.

Chesapeake will also pay $188,000 for the Washington County tank fire. According to the DEP statement, that amount was the largest allowed under the Oil and Gas Act. The fire occurred on February 23 in Avella Township. During that incident, three condensate separator tanks caught fire, injuring three subcontractors working on-site. The DEP’s investigation determined that the fire was the result of improper handling and management of condensate, a wet gas only found in certain geologic areas.

Despite their severity, the two fines do not end Chesapeake’s troubles in Pennsylvania. The state DEP has yet to assess penalties to Chesapeake for a well blowout that occurred in Bradford County last month. As we reported at the time, the blowout allowed thousands of gallons of chemical-laced fracking fluid to spew from the damaged well. The spilled fluid breached its containment, and spilled out onto adjacent farmland and into a tributary of Towanda Creek, which flows into the Susquehanna River. Chesapeake suspended completion of natural gas wells in Pennsylvania for three weeks after the April 19 blowout.

The Susquehanna, which empties into the Chesapeake Bay, provides drinking water for more than six million people in the Northeast and mid-Atlantic. The state of Maryland has already informed Chesapeake of its intention to sue the company for pollution of the Susquehanna River resulting from the April blowout.

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