Energy Company to Pay $3.2 Million Penalty to Resolve Clean Water
Violations in West Virginia
Chesapeake Appalachia LLC to spend estimated $6.5 million to restore
areas damaged by natural gas extraction activities
WASHINGTON - The U.S. Environmental Protection Agency and the Department
of Justice announced that Chesapeake Appalachia, LLC, a subsidiary of
Chesapeake Energy, the nation’s second largest natural gas producer,
will spend an EPA-estimated $6.5 million to restore 27 sites damaged by
unauthorized discharges of fill material into streams and wetlands and
to implement a comprehensive plan to comply with federal and state water
protection laws at the company’s natural gas extraction sites in West
Virginia, many of which involve hydraulic fracturing operations.
The company will also pay a civil penalty of $3.2 million, one of the
largest ever levied by the federal government for violations of the
Clean Water Act (CWA), under the Section 404 program, which requires a
federal permit prior to the discharge of dredge or fill material
materials into wetlands, rivers, streams, and other waters of the United
States.
“Ensuring environmentally-sound and legal natural gas production is
critical to protecting wetlands and local water supplies that
communities depend on,” said Cynthia Giles, Assistant Administrator of
EPA’s Office of Enforcement and Compliance Assurance. “By enforcing the
law with a large producer like Chesapeake Appalachia, we’re also helping
to level the playing field for businesses in this industry.”
“With this agreement, Chesapeake is taking important steps to comply
with state and federal laws that are essential to protecting the
integrity of the nation’s waters, wetlands and streams,” said Robert G.
Dreher, Acting Assistant Attorney General of the Justice Department’s
Environment and Natural Resources Division. “We will continue to
ensure that oil and gas development, including development through the
use of hydraulic fracturing techniques, complies with the Clean Water
Act and other applicable federal laws.”
The federal government and the West Virginia Department of Environmental
Protection (WVDEP) allege that the company impounded streams and
discharged sand, dirt, rocks and other fill material into streams and
wetlands without a federal permit in order to construct well pads,
impoundments, road crossings and other facilities related to natural gas
extraction. The alleged violations being resolved by today’s settlement
occurred at 27 sites located in the West Virginia Counties of Boone,
Kanawha, Lewis, Marshall, Mingo, Preston, Upshur and Wetzel, including
16 sites involving hydraulic fracturing operations. The government
alleges that the violations impacted over 12,000 linear feet of stream,
or approximately 2.2 miles, and more than three acres of wetlands.
The settlement requires that the company fully restore the wetlands and
streams wherever feasible, monitor the restored sites for up to 10 years
to assure the success of the restoration, and implement a comprehensive
compliance program to ensure future compliance with the CWA and
applicable state law. The company will also perform compensatory
mitigation, which will likely involve purchasing credits from a wetland
mitigation bank located in a local watershed.
EPA discovered some of the violations through information provided by
the public and routine inspections. In addition, the company voluntarily
disclosed potential violations at 19 of the sites following an internal
audit. In 2010 and 2011, EPA issued administrative compliance orders for
violations at 11 sites. Since that time, the company has been correcting
the violations and restoring those sites, in full compliance with EPA’s
orders.
The settlement also resolves alleged violations of state law brought by
WVDEP. The state of West Virginia is a co-plaintiff in the settlement
and will receive half of the civil penalty.
In a related case in December 2012, the company pled guilty to three
violations of the CWA related to natural gas extraction activity in
Wetzel County, at one of the sites subject to today’s settlement. The
company was sentenced to pay a $600,000 penalty to the federal
government for discharging crushed stone and gravel into Blake Fork, a
local stream, to create a roadway to improve access to a drilling site.
The company has already fully restored the damage done to the site.
Filling wetlands illegally and damming streams can result in serious
environmental consequences. Streams, rivers, and wetlands benefit the
environment by reducing flood risks, filtering pollutants, recharging
groundwater and drinking water supplies, and providing food and habitat
for aquatic species.
Chesapeake Appalachia engages in the exploration and production of
natural gas in the Appalachian Basin. The company has oil and natural
gas properties in West Virginia, Pennsylvania, and Ohio.
The consent decree, lodged today in the Northern District of West
Virginia, is subject to a 30-day public comment period and court
approval. The consent decree is available for review at
www.justice.gov/enrd/Consent_Decrees.html
More information about the settlement:
http://www2.epa.gov/enforcement/chesapeake-appalachia-llc-clean-water-settlement
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