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Chesapeake Energy Faces $1 Million Fine in Pennsylvania

May 17, 2011

Sometimes actions do have consequences.

Unconventional natural gas driller Chesapeake Energy is now facing fines of more than $1 million in the state of Pennsylvania.  These fines are being levied by the PA Department of Environmental Protection for several recent incidents.

Selected excerpt from the WNEP Channel 16 article “Chesapeake Energy Hit with Million Dollar Fine“.

“DEP said the fine stems from Chesapeake’s contamination of private water wells with methane gas in Tuscarora, Terry, Monroe and Towanda townships in Bradford County and a tank fire at a drilling site in southwestern Pennsylvania.”

Selected excerpts from the Associated Press article “Pa. DEP issues $1M in fines to major gas driller” written by Marc Levy:

“Chesapeake will pay $900,000 in the gas migration case and $188,000 for the tank fire.

The fines come as the U.S. Environmental Protection Agency is looking closely at how Pennsylvania is regulating the rush to explore the lucrative Marcellus Shale formation, considered the nation’s largest natural gas reservoir, and putting pressure on state regulators to toughen enforcement. For instance, the EPA has asked for a full accounting of operations at the site of a Chesapeake well blowout in April.

Any potential violations from that well blowout, also in Bradford County, are not included in the fines announced Tuesday. The accident spilled thousands of gallons of chemical-laced water and prompted officials to ask seven families to temporarily evacuate.”

“Chesapeake is perhaps the most active company in the Marcellus Shale, with more than 360 wells drilled. It has received more than 1,200 well-drilling permits – the most of any operator – or about one in six issued on the Marcellus Shale in the last three years, according to state records. In 2010, it was also one of Pennsylvania’s most-penalized Marcellus Shale drillers, with 134 violations and 25 enforcements, state records say.

In the Bradford County problems that contributed to the million-dollar fines, the department said that improper well casing and cementing allowed natural gas to seep into groundwater and contaminate 16 families’ drinking water wells. The department began investigating the complaints last year. In November, it won approval of stronger well-casing and cementing rules that a top DEP official has said would have prevented the gas migration.

The agreement requires Chesapeake to create a corrective action plan for the contaminated wells and clean up the contaminated water supplies.

In Avella in southwestern Pennsylvania, three condensate separator tanks caught fire on Feb. 23, injuring three subcontractors working at the site, the DEP said. The agency blamed improper handling and management of condensate, a wet gas, and is requiring Chesapeake to submit condensate-management plans.”

Read the ProPublica article “PA Officials Issue Largest Fine Ever to Gas Driller” here.

5 Comments
  1. May 17, 2011 7:29 pm

    $1,088,000 may be the largest fine the PA DEP has ever issued, but considering Chesapeake pulled in $1.6 BILLION in revenue in the first quarter of 2011, it seems more like a slap on the wrist.
    Liz R.

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