Member Article

The U.S. Department of Justice (“DOJ”), Pennsylvania Department of Environmental of Protection (“PADEP”), and environmental groups have quickly answered the U.S. Environmental Protection Agency (“EPA”) summons to ensure new energy extraction complies with environmental laws.  The Marcellus Shale extraction (and “energy extraction” in general) is one of EPA’s six national “environmental and public health problems” that warrant a special enforcement initiative for Fiscal Years
2011-2012 to “assur[e] energy extraction sector compliance with environmental laws.”  See, http://www.epa.gov/oecaerth/data/planning/initiatives/initiatives.html.In the first half of 2011, companies paid record fines in Pennsylvania, individuals and corporations were criminally prosecuted, and EPA Region III leaned heavily on PADEP and the largest natural gas operators in Pennsylvania for treatment and/or disposal of flowback water.  As a result of the various enforcement tools at EPA’s disposal, this topic will be address in two articles – this month focusing on Clean Water Act actions. Next months article will address actions pursuant to the Clean Air Act and Safe Drinking Water Act.

Possibly influenced by EPA’s enforcement initiative, DOJ, through the
Assistant Attorney General for the Environment and Natural Resources
Division, and the U.S. Attorneys for three districts in Pennsylvania
held a two-day Marcellus Shale Law Enforcement Conference on May 25,
2011 in Pennsylvania.  Reportedly over 200 federal, state and local
officers, environmental officials and prosecutors from West Virginia,
Pennsylvania, New York, and Ohio attended. The purpose of the conference
was to “focus on environmental crimes, financial crimes, commercial
vehicle violations, drug trafficking, officer safety issues,
eco-terrorism and other relevant local/state/federal crimes specific to
Marcellus Shale.” Inclusion of non-environmental potential causes of
action may stem from the fact that the Safe Drinking Water Act’s
exemption of subsurface injections of fracking fluids from the
definition of “underground injection”. Other than short presentations by
the Marcellus Shale Coalition and Sierra Club, the conference was
otherwise restricted to law enforcement and prosecutors only.



Even prior to the Marcellus Enforcement Conference, PADEP was pursuing
alleged civil and criminal environmental violations related to Marcellus
drilling. On March 17, 2011, Pennsylvania’s Attorney General’s
Environmental Crimes Section filed criminal charges against Robert Allan
Shipman and his business, “Allan’s Waste Water Service, Inc.”  Mr.
Shipman was charged with 98 criminal counts, his business with 77. The
indictment alleges, Mr. Shipman  instructed drivers to mix various waste
waters together and then dump the “cocktail” at various locations in
Southwest Pennsylvania. Other counts include allegations of falsified
and forged manifests and instructing drivers to leave water valves open
at gas wells while supposedly “filling” the tanks – typically after dark
or during heavy rains. On March 21, 2011, PADEP ordered the two
operations owned by Mr. Shipman (Allan’s Waster Water Service Inc. and
Tri-County Waste Water Service) to be closed and revoked their permits.
For civil enforcement, on May 17, 2011, PADEP issued to Chesapeake
Energy (“Chesapeake”) the largest single penalty ever assessed to an oil
and gas operator related to water well contamination. Under a Consent
Order and Agreement, Chesapeake will pay $900,000 for alleged
contamination of private water supplies in Bradford County, PA.
Chesapeake will also pay $200,000 into DEP’s well-plugging fund. A
second consent order related to a February 23, 2011 tank fire at
Chesapeake’s drilling site in Avella, Washington County was entered on
the same day. The company agreed to pay a fine of $188,000 associated
with the fire.



In addition to civil and criminal enforcement, EPA Region III also sent a
“request” to PADEP and six § 308 requests to Atlas Resources, Cabot Gas
& Oil Corporation, Chesapeake Energy, Range Resources, SWEPI, and
Talisman Energy USA regarding disposal and recycling activities
associated with wastewater generated by Marcellus Shale extraction and
production. The § 308 requests and letter to PADEP stem from PADEP’s
April 19, 2011 announcement that it requested all Marcellus Shale
natural gas drillers by May 19, 2011, to voluntarily cease delivering
wastewater to the 15 wastewater treatment plants “grandfathered” from
PADEP’s 2010 total dissolved solids regulations. The information
requests focused on how drillers were going to dispose of their
wastewater after May 19 and their responses were due by May 25, 2011. In
its letter, EPA Region III “requested” that PADEP:

•    Notify EPA when facilities are
accepting hydraulic fracturing wastewater so EPA can assess if a
pretreatment program or additional permit limits are needed;

•     Apply water quality standards for the protection of drinking water
at the point of wastewater discharge, rather than at the point of first
downstream drinking water intake; [and]

•    Consider more “representative” sampling where drinking water
facilities are downstream of treatment plants accepting Marcellus Shale
gas wastewater.

See May 12, 2011 EPA Press Release at http://yosemite.epa.gov/opa/admpress.nsf/0/4816775ad0e881ab8525788e006a91ed.     

EPA Region III has also been active utilizing Section 404 of the Clean
Water Act alleging discharge of dredged and/or fill material in waters
of the United States without a permit at oil and gas construction sites
in West Virginia. Seven administrative Orders of Compliance have been
issued since January 1, 2011. The orders generally require the
respondent company to (1) cease and desist all discharges without a
permit into waters of the United States, (2) submit a pre-construction
wetland and stream delineation for EPA’s approval that identifies all
areas at the particular site that were streams or wetlands prior to
construction, and (3) submit for EPA’s approval a detailed restoration
plan that will describe actions to be taken to remove the material from
the regulated waters, to stabilize the site and to return the
watercourse and wetlands to pre-disturbance grade and conditions, and
then implement the same within 90 days of EPA’s approval of the plan.   




As drilling activity in West Virginia increases, aggressive enforcement
and enhanced oversight of WVDEP’s regulation of drilling activities by
EPA Region III should be expected and companies should plan
accordingly. 

This is the first of two articles addressing recent enforcement
activities by the federal government and the states targeting Marcellus
Shale well development activities. 

For more information, please contact:

• James D. Elliott
  
  717.791.2012
  
  [email protected]

 

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