PADEP Imposes Record Fine on Oil and Gas Company

In a press release issued earlier today, PADEP announced that it had imposed a $1,088,000 fine on Chesapeake Energy for violations related to natural gas drilling activities. Chesapeake entered into a CO&A with the Department and agreed to pay $900,000 for contaminating private water wells in Bradford County and $188,000 for a tank fire at one of its drilling sites in Washington County. The water contamination was unrelated to Marcellus Shale fracking activities. It arose out of improper well casing and cementing in shallow water zones. As part of the CO&A, Chesapeake agreed to corrective actions, including remediating the contaminated water supplies. With this fine, Secretary Krancer has forcefully laid down the law. In the press release, he is quoted as saying "Our message to drillers and to the public is clear." That message is that the Department intends to vigorously enforce Pennsylvania's Oil and Gas laws. I expect that the fines can and will go higher if Secretary Krancer's message is not heeded by the industry. Given the heightened public scrutiny, it is hard to argue with a "zero tolerance" policy for oil and gas violations, especially those involving the contamination of private wells. The industry has the know how and the resources to prevent that from happening. If it can't assure the public that the drilling can be done safely and in compliance with Pennsylvania's laws and regulations, then it could very well squander what many consider to be a once-in-a-lifetime opportunity.

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