Pa. well site will be focus of fierce legal battle

Pa. well site will be focus of fierce legal battle

Source: The Philadelphia Inquirer, September 22, 2013
Posted on: http://envfpn.advisen.com

The Marquardt well site is indistinguishable from most Marcellus Shale drilling locations: It encompasses about five acres of graded farmland, covered with gravel, containing two active natural gas wells.

But this well pad was the scene of a crime, according to state Attorney General Kathleen Kane’s office, which on Sept. 10 announced charges against a subsidiary of the oil giant Exxon Mobil Corp. for a spill that occurred here in 2010.

Three years ago, the site contained about 50 steel storage tanks, parked side by side, including some that held toxic drilling wastewater to be treated and recycled. The state says that more than 50,000 gallons — about 10 tractor-trailer loads — leaked through an open valve, flowed through a ditch, and polluted an unnamed creek.

Exxon Mobil’s subsidiary, XTO Energy Inc., is mounting a fierce legal and public-relations defense, saying the criminal charges are “unprecedented, baseless, and an abuse of prosecutorial discretion.”

XTO portrays the spill as a minor event — closer to 6,300 gallons leaked — for which it has already made amends, and says there was no lasting environmental damage.

“They cleaned it up pretty quickly,” said Robert Marquardt, the cattle farmer whose fields of corn and alfalfa surround the wells.

He has no beef with XTO. But Kane does.

“The severity, the extent of the spill, was significant in this case,” said Joe Peters, a spokesman for the attorney general.

The case also has assumed larger political dimensions. Kane is a Democrat in a Republican-dominated state government that anti-drilling activists perceive to be soft on the gas industry.

“Until these gas companies become responsible citizens of the area, they need to be held accountable to the maximum extent of the law,” said Drake Saxton, who lives a few miles from the site and is active with a local environmental group, the Responsible Drilling Alliance.

The courtroom battle will focus on what happened at Marquardt’s Lycoming County farm, where last week a remote-controlled helicopter flew over the area for XTO to gather video evidence of the absence of visible damage.

The state’s criminal charges were filed less than two months after XTO agreed with the Obama administration’s Environmental Protection Agency and the U.S. Attorney General’s Office to pay a $100,000 fine to settle Clean Water Act violations related to the spill.

As part of the federal civil settlement, XTO also signed a consent decree requiring it to employ a strict program for managing wastewater from well operations, including hydraulic fracturing. The government estimates that XTO will spend $20 million implementing the changes.

The consent decree “establishes a program of best practices that should be a model for the industry,” the U.S. Attorney’s Office said in July. A federal judge in Williamsport approved the settlement Wednesday.

The federal agreement included no finding or admission of liability.

In the state case, XTO has been charged with five counts of unlawful conduct under the Clean Streams Law and three counts of unlawful conduct under the Solid Waste Management Act.

The Clean Streams Law allegations require proof of negligent conduct. But the Solid Waste Act accusations are “strict liability” charges — no intent needs to be proved.

XTO faces a fine of $25,000 a day per violation, or as much as $13 million for the eight charges over more than two months.

According to the grand jury presentment, an inspector for the state Department of Environmental Protection, Jeremy Daniel, discovered the leak Nov. 16, 2010, during an unannounced visit. He found a threaded plug removed from the rear of a storage tank and wastewater gushing out.

A stream and a spring below the site tested positive for pollutants from gas-drilling wastewater — strontium, chloride, bromide, barium, and total dissolved solids.

At first, XTO suggested the release was the result of vandalism, but later determined that a contractor working at the site had likely left the valve open.

Texas-based Bosque Systems Inc. was treating wastewater at the site so it could be recycled in new hydraulic-fracturing operations. XTO believes that before Bosque moved its treatment operations to another location, one of its employees transferred water between the tanks and neglected to close the valve in the rear of a tank after it had been emptied.

A contracted water-hauler, Clark Trucking of Muncy, Pa., then delivered wastewater to the site from other XTO wells, pumping it into the front of the unplugged storage tank while it leaked out the open valve in the rear of the 50-foot-long container.

The grand jury noted the lack of security features at the site, such as a fence, locks on tank valves, or a liner under the water tanks. XTO deflected questions about its practices.

“Independent contractors were responsible for the management of produced water on site, including the recycling operation,” said XTO spokesman J.D. Estes.

John Hanger, the former DEP secretary whose office referred the case to the attorney general in 2010, found XTO’s explanation irksome.

“When a corporation starts pointing at a contractor that they hired, as though they’re not responsible because a contractor has caused the problem, that concerns me,” said Hanger, who is a Democratic candidate in the 2014 governor’s race.

XTO said it has spent $1.3 million to clean up the site, including excavating 3,000 tons of contaminated soil. No employees were disciplined.

“There is no evidence to suggest that any employee of XTO intentionally caused the release of produced water on the Marquardt site,” Estes said, “nor is there any evidence of knowing and intentional or reckless misconduct or negligence by XTO.”

CONTEXT OF CASE

The accusations against an Exxon Mobil subsidiary also have assumed larger political dimensions. State Attorney General Kathleen Kane is a Democrat in Republican-dominated Harrisburg, which anti-drilling activists perceive to be soft on the gas industry.

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