Chesapeake Energy Fined $1.1 Million for Methane Migration and Tank Fire in PA

Chesapeake Energy has been slapped with the largest fine given to date by the Pennsylvania Department of Environmental Protection (DEP) for methane migration and for a fire at a well.

The Department of Environmental Protection has fined natural gas driller Chesapeake Energy a record $1.1 million for a series of water contamination incidents and a well-site fire that injured three workers in the last year.

The company will pay $900,000 for allowing methane to migrate up faulty wells in Bradford County, contaminating 16 families’ drinking water beginning in 2010. It also will pay $188,000 for a Feb. 23 tank fire at a well site in Avella, Washington County.

DEP Secretary Michael Krancer said the contamination fine is the largest single penalty the agency has ever levied against a driller while the tank fire fine is the highest allowed under the state’s oil and gas law.

The water contamination incidents in Bradford County are similar to those experienced in Susquehanna County: improperly cased and cemented natural gas wells allowed methane trapped in the shallow rock between the surface and the Marcellus Shale to escape into drinking water aquifers. It bubbled up in a private pond, a beaver pond and the Susquehanna River from as many as six sets of faulty wells in five towns.

If methane dissolved in the drinking water wells does not decrease within 60 days to a point far below any risk of explosion or asphyxiation, Chesapeake will have to restore or replace the affected water supplies if it has not done so already. For families who may refuse the company’s fixes, Chesapeake will have to fund escrow accounts with an amount to be determined by DEP to pay to replace the water.*

Chesapeake has now changed their casing and cementing methods to conform to newly updated regulations by the PA DEP. They said in a statement that their drilling “possibly caused” methane contamination of the wells, but stopped short of a full admission.

*The Citizen’s Voice (May 18, 2011) – DEP fines Chesapeake $1.1 million for fire, contamination incidents