Chesapeake Energy has agreed to pay $1.6 million in damages to three families in Wyalusing, Bradford County. The case may be the first Marcellus contamination lawsuit to get resolved without a nondisclosure agreement, meaning the parties can speak freely about the case. Todd O’Malley, an attorney for two of the families, says the plaintiffs insisted on not signing a confidentiality agreement.
“They wanted the public to know what the settlement was about,” says O’Malley.
O’Malley says the majority of gas drilling related cases get settled without any public disclosure, including the causes of the contamination, or the health impacts.
“I think the nondisclosure form is probably the worst form,” says O’Malley. “It’s referred to as ‘toxic secrets.’ The public deserves to know.”
The families, living along Paradise Road, all signed leases with Chesapeake Appalachia to drill beneath their land. But in July, 2010, the residents began to notice muddy water coming from their water wells. Chesapeake supplied a filtration system, which residents say did not work. O’Malley says his investigators concluded that a poor cement job resulted in methane migrating from the Marcellus Shale formation into the water supply of nearby residents.
Scott and Cassie Spencer, Heather and Jared McMicken, and Michael and Jonna Phillips filed suit in the Middle U.S. District Court of Pennsylvania, which was sent to arbitration. Three days of testimony took place before an arbitration panel in Philadelphia this week, precipitating the two parties reaching an agreement on Thursday.
O’Malley says all three families signed leases that forced any dispute into arbitration, which typically leads to smaller financial settlements than jury trials.
“They deserved much more money,” said O’Malley. “With what they went through, you couldn’t pay them enough. But this is enough to get them out and into new homes.”
Chesapeake also agreed to buy the homes from the families, which is included in the $1.6 million. But the company says their drilling practices did not cause methane migration. In a written statement, Chesapeake says no pre-drill water tests were conducted at these homes, which leaves open the question of whether the methane was present before drilling occurred.
“The PA Department of Environmental Protection currently recommends pre-drill testing within a 2,500-foot radius of any oil or gas drilling operation, and Chesapeake meets or exceeds that recommendation with its testing.
All of these water sources are beyond that testing radius, and thus Chesapeake had not collected pre-drill data for the water sources.”
The statement goes on to say that the pre-drill testing done in other area homes showed methane contamination before any drilling activity took place.
Chesapeake operates almost 200 wells in Pennsylvania, most are in Bradford County. The company has racked up about 190 violations and paid about $1.2 million in fines. The wells that residents say caused the water contamination along Paradise Road are the Welles 1 3H and the Welles 1 5H.