Pa. DEP targets Texas driller for tainted water

Thursday, September 30th, 2010 | Finance News

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DIMOCK, Pa. – Pennsylvania's top environmental regulator says the state will sue a Houston-based drilling company unless it agrees to pay nearly $12 million to extend a public water line to at least 18 residents whose water wells have been contaminated with methane gas.

Environmental Secretary John Hanger accused Cabot Oil & Gas Corp. on Thursday of reneging on its promises to the residents of Dimock, a small town in Susquehanna County, where tainted wells have raised concerns nationwide about the environmental and health consequences of gas drilling.

"We have had people here in Pennsylvania ... without safe drinking water for close to two years. That is totally, totally unacceptable. It is reprehensible," Hanger told a news conference packed with residents and media. "We're going to take decisive action now because we cannot possibly wait any longer."

Hanger blames the methane contamination of the Dimock aquifer on faulty Marcellus Shale gas wells drilled by Cabot. The company vigorously denies responsibility for the pollution. It took out a newspaper ad and released a 29-page rebuttal document this week in which Cabot's chief executive officer, Dan Dinges, lambasted Hanger and his agency for "political pandering" and abuse of authority.

Dramatic evidence of the methane contamination — residents lighting their tap water on fire — was broadcast this summer in "Gasland," the Josh Fox documentary on HBO. The film highlighted environmental concerns about natural gas drilling in the Marcellus Shale and other rock formations around the country.

Dimock is not alone in dealing with methane water contamination. Just 35 miles southwest, in Wilmot Township, The Department of Environmental Protection says at least six residential wells were found earlier this month to be tainted with methane believed to be caused by Oklahoma City-based Chesapeake Energy Co. drilling. Clean water is being supplied to those residents, officials said.

Though it has already taken legal responsibility for the Dimock methane contamination, Cabot contends water wells in the area were already tainted with methane long before it arrived. Cabot is among a rush of gas drillers tapping the riches of the vast Marcellus Shale formation that underlies much of Pennsylvania, New York and parts of Ohio and West Virginia.

Tensions between Cabot and Dimock residents appear to be escalating. Cabot hired armed guards to accompany employees onto residential properties after a resident was charged with disorderly conduct earlier this month for an incident with a gun. Details were not immediately available.

Hanger pleaded for calm.

"Put the guns away. Everybody has to do this through the law. Cabot has to follow the law. You have to follow the law," he told residents. "I understand the concern about guns. Emotions have been high. This has to be done in a peaceful, respectful manner."

Hanger quoted extensively from two separate consent agreements, from November 2009 and April 2010, in which Cabot admitted polluting Dimock's water supplies and then failed to fix the gas wells in a timely fashion. Cabot also agreed in the consent orders that it "shall not challenge the accuracy or validity of these findings" — a promise, Hanger noted, that it has not kept.

Hanger dismissed Cabot's claim that methane in the residents' wells is naturally occurring, saying the state performed sophisticated testing that identified the gas as coming from Cabot's wells.

"The case is overwhelming," he said.

In his letter to Hanger, dated Sept. 28, Dinges said the company was compelled to sign the consent orders "under extraordinary duress," noting that Hanger had threatened to shut down Cabot's operations. He accused Hanger of "an obvious and unfounded bias against Cabot" and said the state DEP abused its regulatory authority to "extract factually unsupported (and now refuted) admissions and concessions from Cabot."

Dinges also balked at the plan to pipe in municipal water, calling it "wasteful and environmentally disruptive."

Dimock residents are to be connected to the water system of Montrose, a town about six miles away. Construction is expected to start within a few months and take another 18 months.

"We're going to get this work going as soon as it's humanly possible," Hanger said to applause, "and we will fight with Cabot — if that's what Cabot wants to do — in other forums."

Residents said they were gratified by the announcement.

"It has not been fun living here," Julie Sautner told the AP. Well water at her family's home in a wooded area of Dimock is among those affected. "We've pretty much been tortured here by the gas industry."

Sautner said in a recent interview that she and other residents get water delivered daily to their homes, provided by Cabot. Her family's is stored in a plastic "water buffalo," a 550-gallon tank that supplies water for showering, washing dishes and flushing toilets. In the winter, she said, the buffalo freezes, leaving them without water until it thaws.

Cabot provides separate supplies of spring water for drinking and cooking, she said.

"September 11 marked our two-year anniversary living out of a plastic water buffalo in our garage," she said. "It's pretty disgusting."

Cabot has been fined repeatedly by the DEP, including $360,000 in fines related to the Dimock water contamination. In addition, more than a dozen families have sued Cabot over their ruined water wells.

Earlier this month, a private consulting firm working for the plaintiffs said it had found toxic chemicals in Dimock water, including industrial solvents, but that it could not say the chemicals were the result of gas drilling.

The chemicals are among dozens added to sand and mixed with millions of gallons of water to hydraulically fracture, or frack, shale deposits and free natural gas trapped thousands of feet underground. The chemicals found by environmental engineer Daniel Farnham are also used in many products, including paint thinner and gasoline; Cabot has blamed a nearby gas station for the chemicals.

The fracking process is currently exempted from federal water quality laws, regulated instead by myriad state rules. Responding to growing concerns, the Environmental Protection Agency is drawing a study that could lead to removal of the exemption and application of federal authority.

In its letter, Cabot said its wells "meet or exceed" not only Pennsylvania's standards for casing and cementing, but the best practices in the natural gas production industry.

Hanger said in a recent interview that the problem of shallow methane gas migration occurs when a gas line is drilled, and has nothing to do with the fracking of the well.

DEP is proposing "new drilling standards, very tough drilling standards, that will affect the whole industry," he said. Many companies have voluntarily adopted the tighter and costlier rules, which he hopes will get final state approval by the end of the year.

Chesapeake has been ordered to evaluate 171 of its gas wells in Pennsylvania — wells drilled with the same casing procedures as those used to drill its six suspect Wilmot gas wells.

"We fully support the new well-construction standards that the PA DEP has proposed," Chesapeake said in a statement.

The problem, reported to DEP on Sept. 2, was discovered after methane was seen bubbling up in the Susquehanna River, near Chesapeake's operations in Bradford County.

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Associated Press Writer Nancy C. Albritton contributed to this story from Philadelphia.

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