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Chesapeake Energy Fined For Marcellus Gas Drilling Violations

Chesapeake Energy Fined For Marcellus Gas Drilling Violations

$1.088-million penalty for private well contaminations in two Pennsylvania counties.

Yesterday, Pennsylvania Department of Environmental Protection fined Chesapeake Energy $1,088,000 for violations related to natural gas drilling activities. The biggest part of the fine concerned gas contamination of private well water, a controversy that has generated national debate.

Chesapeake will pay DEP $900,000 for contaminating private water supplies in Bradford County. Some $200,000 of it will be pumped into DEP's well-plugging fund, used to mitigate historic and recent gas migration problems in cases when the gas source can't be identified.

During 2010, DEP investigated numerous private water well complaints in Bradford County's Tuscarora, Terry, Monroe, Towanda and Wilmot townships. All were near Chesapeake's shale drilling operations in north central Pennsylvania. DEP determined that because of improper well casing and cementing in shallow zones, natural gas from non-shale shallow gas formations had migrated into groundwater, contaminating 16 families' drinking water supplies.

Chesapeake has agreed to take multiple measures to prevent future shallow formation gas migration. It will create a corrective action plan for those wells, to be approved by DEP. It includes remediating the contaminated water supplies, installing necessary equipment, and reporting water supply complaints to DEP.

 "The water well contamination fine is the largest single penalty DEP has ever assessed against an oil and gas operator, says DEP Secretary Mike Krancer.

The second part of the fine concerns a February 23 tank fire at its drilling site near Avella, in western Pennsylvania's Washington County. For that, Chesapeake Energy will pay $188,000 – "the highest fine we could assess under the Oil and Gas Act," adds Krancer.

Three condensate separator tanks caught fire while testing and collecting fluid from drill site wells. Three subcontractors working on-site were injured. DEP's investigation determined the cause was improper handling and management of condensate, a wet gas found in certain geologic areas.

Chesapeake must submit a condensate management plan for DEP approval for each well site that may produce condensate. Wet gas is commonly found in the formations being explored in southwestern Pennsylvania and West Virginia.

"Our message to drillers and to the public is clear," says Krancer. "Natural gas drillers [must be] stewards of the environment and take very seriously their responsibilities to comply with our regulations. Their actions cannot risk public health and safety or the environment."

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