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Chesapeake fined for water contamination

Pennsylvania's Department of Environmental Protection (DEP) gives out fines totalling $1.1 million

PENNSYLVANIA’S Department of Environmental Protection (DEP) has slapped fines totalling $1.1 million on Chesapeake Energy for contaminating private water supplies and for a fire and explosion at a drilling site.

The DEP said Chesapeake will pay $900,000 for contaminating water supplies in Bradford County, $200,000 of which must be dedicated to the DEP’s “well-plugging fund”, which aims to correct gas-migration problems arising from faulty wells.

The water-well contamination fine is the largest single penalty the DEP has ever handed out to an oil and gas operator.

DEP secretary Mike Krancer said: “It is important to me and to this administration that natural gas drillers are stewards of the environment and that their actions do not risk public health and safety or the environment.”

The DEP has investigated several private water-well complaints from residents in Bradford County’s Tuscarora, Terry, Monroe, Towanda and Wilmot townships, near Chesapeake’s shale drilling operations.

The department concluded that “improper well casing and cementing in shallow zones” allowed natural gas from non-shale shallow-gas formations to migrate into ground water. This then contaminated 16 families’ drinking-water supplies.

Prevention steps

Chesapeake has also agreed to take steps to prevent such an incident happening again. These include a plan, which will be approved by the DEP, outlining ways to correct faulty wells, cleaning up contaminated water supplies and reporting any further complaints to the department.

Under a second order from the DEP, Chesapeake will have to pay a $188,000 fine for a tank fire that broke out at its Avella drilling site, in Washington County, on 23 February.

The fire broke out while Chesapeake was testing and collecting fluid from wells at the drill site. Three condensate-separator tanks caught on fire, injuring three subcontractors working on the site.

The DEP concluded the fire was the result of “improper handling and management of condensate” – a wet gas found only in certain geologic areas. As well as the fine, Chesapeake must submit a condensate-management plan to the DEP for approval. It must draw up a plan for each well it plans to produce condensate from.

The Avella tank-fire penalty is the highest the department could impose on Chesapeake under the Oil and Gas Act. “Our message to drillers and to the public is clear,” Krancer said.

The company said it will pay the fines and has improved its cementing and casing techniques.

Chesapeake is the US second-largest gas producer with output of 243 billion cubic feet a day in the first quarter of the year, up by 16% over first-quarter 2010. It halted operations at some of its shale-gas wells in Pennsylvania for three weeks after a well blowout in April, which causes thousands of gallons of flowback fluids to escape into a tributary of the Susquehanna River.

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