Pa. well site will be focus of fierce legal battle; Criminal charges for toxic frac waste spill/leak/dumping stun drilling industry

Pa. well site will be focus of fierce legal battle by The Philadelphia Inquirer, October 4, 2013
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.

“The severity, the extent of the spill, was significant in this case,” said Joe Peters, a spokesman for the attorney general. … 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 last month. 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. [Emphasis added]

Shale criminal charges stun drilling industry by Andrew Maykuth, September 13, 2013, Inquirer
Pennsylvania Attorney General Kathleen Kane’s decision to prosecute a major Marcellus Shale natural-gas driller for a 2010 wastewater spill has sent shock waves through the industry. … Kane’s office announced charges Tuesday against XTO Energy Inc. for discharging more than 50,000 gallons of toxic wastewater from storage tanks at a gas-well site in Lycoming County. XTO in July settled federal civil charges over the incident by agreeing to pay a $100,000 fine and deploy a plan to improve wastewater-management practices. The consent decree included no admissions of liability. The Fort Worth, Texas, drilling company, which Exxon acquired in 2010, said it had worked cooperatively with federal and state authorities to clean up the spilled waste, known as “produced water.” XTO excavated and removed 3,000 tons of contaminated soil from the site.

“Criminal charges are unwarranted and legally baseless because neither XTO nor any of its employees intentionally, recklessly, or negligently discharged produced water on the site,” XTO said in a statement. Kane’s office said it did not need to prove intent to prosecute the company for crimes. XTO is charged with five counts of unlawful conduct under the Clean Streams Law and three counts of unlawful conduct under the Solid Waste Management Act. Industry leaders said the prosecution of a company for what they called an inadvertent spill creates a hostile business environment. “The incident has been fully addressed at the state and federal levels, and this action creates an untenable business climate that will discourage investment in the commonwealth,” Kathryn Z. Klaber, president of the Marcellus Shale Coalition, said in a statement. The Pennsylvania Chamber of Business and Industry also protested. “This decision sends a chilling message to all businesses looking to locate in Pennsylvania that they could be held criminally liable in the event of an unintentional spill by a contractor that resulted in no injury to humans or wildlife and that had no lasting impacts on the environment,” said Gene Barr, its president.

First to be charged
XTO is the first Marcellus Shale production company to face criminal charges. A Western Pennsylvania waste-hauler, Robert Allan Shipman, was convicted of illegally dumping waste in 2012, and sentenced to serve seven years of probation and 1,750 hours of community service, and to pay $382,000 in restitution and fines. The attorney general has appealed the sentence, arguing that Shipman deserved jail time. In the XTO case, a grand jury did not charge any individuals. XTO faces a fine of $25,000 a day per violation, said Kane spokeswoman Carolyn E. Myers. The leak took place during the two months the company stored wastewater on the site.

The grand jury’s presentment does not say who opened the valves on the tank or why. XTO officials at the time suggested vandals might be responsible. But it noted that the drilling site had no secondary containment, little security, and no alarm system for leaks. Shale-gas wells produce huge quantities of wastewater after they are hydraulically fractured…. The wastewater contains fracking chemicals and pollutants from the shale formation itself, including barium, calcium, iron, magnesium, manganese, potassium, sodium, strontium, bromide, and chloride. [Emphasis added]

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