Pennsylvania

Energy. Environment. Economy.

DEP fined oil and gas companies $2.5 million last year

A Seneca Resources well pad in the Loyalsock State Forest.

Lindsay Lazarski/WHYY / WHYY

A Seneca Resources well pad in the Loyalsock State Forest.

Oil and gas companies were fined $2.5 million by Pennsylvania environmental regulators last year for violations at well sites and pipeline routes.

The 2013 total was the third highest in the three decades of oil and gas penalties the Department of Environmental Protection tracks in its public compliance report. Oil and gas companies were fined higher amounts only in 2010 ($2.7 million) and 2011 ($2.6 million), according to the database. (Tallying the fines in a different way through its fiscal report, DEP said the 2013 total was actually tied with 2011.)

Unlike recent years when high-profile spills, fires or methane migration cases attracted attention and hefty penalties, 2013 saw smaller but significant fines issued without fanfare to companies for violations that accumulated over years. Six of the 20 largest fines ever levied by DEP’s oil and gas program were handed out last year, but only one was among the ten largest.

Many violations are years old and have been resolved by the time regulators decide on a penalty, which can encompass dozens of problems at separate sites. Most fines receive little or no public attention when they are settled. DEP issued press releases announcing three of 135 fines in the oil and gas compliance report last year, according to its archive, and one press release described two of the fines.

DEP spokesman Eric Shirk said the agency can combine multiple violations by a company into one penalty assessment rather than issuing separate fines. The department calculates penalties based on several factors, including which laws or permit limits were broken, how severe the violations were and whether the acts were intentional. He said the agency issues press releases “as deemed necessary,” for example, when an incident has received media attention or when a violation is caused by reckless behavior or has a significant environmental impact.

“If a particular incident garnered media interest, we will do a press release on the enforcement action of that incident,” he said. “If members of the media have followed a particular matter and the department has provided all the relevant information based on these inquiries so that the matter is already conveyed to the public, it may not be necessary to issue a press release.”

Storms and streams

Williams Companies, through three pipeline subsidiaries, paid the most in fines in 2013 for excess erosion and drilling mud spills into creeks during pipeline construction and underground boring operations. The subsidiaries, Laser Northeast Gathering, Williams Field Services and Laurel Mountain Midstream, paid a combined $388,694 in fines for 105 violations between March 2011 and September 2012. Williams Field Services and Laser paid one fine each for a host of problems at their sites in Susquehanna, Wyoming and Luzerne counties; they were the second and third largest fines of the year, at $169,648 and $164,622. Laurel Mountain Midstream paid three fines totaling $54,424 for operations in southwestern Pennsylvania.

Williams was not responsible for the Laser violations, which happened before Williams bought the company in 2012, but Williams assumed Laser’s liabilities and paid the fine.

Williams spokeswoman Helen Humphreys said many of the problems in the northeast stemmed from wet weather brought by Hurricane Irene and Tropical Storm Lee in 2011, while other violations happened during horizontal directional drilling, which is used to bore pipeline paths under waterways. The company has since hired an engineering expert in the directional boring process to implement better design, evaluation and management practices. It has also created a compliance team of engineers and biologists to train its environmental inspectors and construction crews and communicate with regulators.

The program has earned praise from regulators, she said. “Once Pennsylvania DEP closes out its 2013 record of violations, we’ll measure the impact that the compliance team has had,” she said. “But we think we’re going to have a very good result.”

Regulators fined Seneca Resources Corp. the second largest total amount in 2013: $377,000 in seven fines that encompassed 59 violations from February 2010 to March 2013. The company operates both conventional and unconventional wells in the state and the fines settled violations in northwestern and north-central Pennsylvania. More than half of the violations were associated with sites on public lands.

Seneca spokesman Rob Boulware said the fines were principally focused on three incidents: “a road collapse during extreme weather conditions in 2011, a fuel spill which led to a fairly involved clean-up but caused no pollution of any water resource,” and “a spill that resulted from vandalism.”

The company’s infractions also included fluids seeping through a well pad in a Tioga County state forest and a spill during directional boring under a Class A trout stream.

Other companies that were fined the largest amounts last year include PVR Partners ($170,000), U.S. Energy Development Corp. ($150,000), Antero Resources ($148,250), Pennsylvania General Energy ($125,500), Range Resources ($120,050), Schreiner Oil & Gas ($112,000), XTO Energy ($74,261), and Chesapeake Energy ($71,362).

Performance report

Oil and gas companies emphasize that the total fines they paid last year do not necessarily reflect their overall performance record.

A recent state performance report released by the Governor’s Budget Office found that the number of oil and gas enforcement actions declined 19 percent and violations declined 36 percent between fiscal years 2011-2012 and 2012-2013. Between the start of 2010 and the end of 2013 – the period when DEP found most of the violations that led to the 2013 fines – regulators made nearly 95,000 oil and gas inspections across the state and recorded violations during 7.6 percent of them.

“It is a mischaracterization to simply judge an operator by a fine paid in any given year, since violations are negotiated over time and often do not reflect an incident from the year in which a settlement is reached,” Boulware said.

“We constantly adjust our procedures, which has led to a decline in operational infractions each year,” he said. “And that’s a trend we expect to continue.”

DEP’s oil and gas program issued fewer fines overall in calendar year 2013 than in 2012 or 2011 but the average penalty amount was higher: $18,750 in 2013 compared to $15,000 in 2012 and $16,500 in 2011, according to the compliance report.

A 2012 update of the state’s oil and gas law raised the maximum civil penalty for unconventional operators from $25,000 plus $1,000 per day to $75,000 plus $5,000 per day, but DEP has not yet needed to use the increased penalty ceiling in its enforcements, Shirk, the agency spokesman, said. The reason is, in part, that one incident often violates more than one environmental law and DEP has the discretion to consider them together.

“For example, a violation that results in a discharge or spill to a waterway would likely be a violation of the Clean Streams Law as well as the Oil and Gas Act,” he said.

George Jugovic Jr., chief counsel for the environmental organization PennFuture who used to direct DEP’s southwest regional office, said monetary penalties are meant to deter companies from repeating violations, but the size of a fine alone can’t tell you whether it will make an impact.

“It’s more about corporate policy and corporate culture,” he said. “Do they hold persons responsible in their organization when an environmental violation occurs? Because that’s going to make a difference.”

Regulators do not rely on fines alone to enforce environmental laws. Under Pennsylvania’s oil and gas law, for example, companies can be denied a drilling permit in some circumstances if they have continuing violations elsewhere in the state. But a powerful compliance tool available to regulators in the solid waste and mining programs is not an option for oil and gas regulators under the current law, he said. In those programs, a company’s historical compliance record is also taken into account when regulators decide whether to grant a major permit.

“That has a real strong effect on corporate culture,” he said. “People start thinking it’s not just about correcting an existing violation and moving on. If I commit a violation as a corporation, and I rack up enough of them and they are serious enough, I may not be able to do business in the state anymore.”

Here are the five largest fines last year that were not announced by DEP (and a sixth that was announced). Click on the dollar amounts to read annotated penalty agreements:

Seneca Resources: $198,500

Williams Field Services: $169,648

Laser Northeast Gathering: $164,622

U.S. Energy Development: $150,000

PVR Marcellus Gas Gathering: $150,000

Antero Resources: $148,250

Here are all of the fines included in the compliance database for 2013:

Show rows.
OPERATOR
PENALTY AMOUNT
DATE EXECUTED
SENECA RESOURCES CORP$198,50010/25/2013
WILLIAMS FIELD SVC CO LLC$169,6484/15/2013
LASER NORTHEAST GATHERING CO LLC$164,6225/8/2013
PVR MARCELLUS GAS GATHERING LLC$150,0005/7/2013
US ENERGY DEV CORP$150,0002/28/2013
ANTERO RESOURCES CORP$148,2506/7/2013
SCHREINER OIL & GAS INC$112,0006/25/2013
PA GEN ENERGY CO LLC$73,0003/26/2013
SENECA RESOURCES CORP$68,9433/21/2013
HOMELAND ENERGY VENTURES LLC$68,2002/22/2013
ANADARKO MARCELLUS MIDSTREAM LLC$60,0002/5/2013
RANGE RESOURCES APPALACHIA LLC$59,0009/17/2013
PA GEN ENERGY CO LLC$52,5003/26/2013
EQT PRODUCTION CO$50,0003/21/2013
SENECA RESOURCES CORP$43,4683/20/2013
SENECA RESOURCES CORP$37,1454/22/2013
CHESAPEAKE APPALACHIA LLC$35,86211/4/2013
TITUSVILLE OIL & GAS ASSOC INC$33,2707/15/2013
EOG RESOURCES INC$31,3631/29/2013
XTO ENERGY INC$30,1362/27/2013
CHESAPEAKE APPALACHIA LLC$30,0009/19/2013
MDS ENERGY LTD$30,0003/21/2013
LAUREL MTN MIDSTREAM OPR LLC$28,5505/21/2013
RANGE RESOURCES APPALACHIA LLC$26,2509/17/2013
EXCO RESOURCES PA LLC$25,0002/6/2013
XTO ENERGY INC$24,7052/21/2013
RICE DRILLING B LLC$24,5005/14/2013
ENERVEST OPR LLC$23,2501/15/2013
RANGE RESOURCES APPALACHIA LLC$22,2509/17/2013
ABARTA OIL & GAS CO INC$20,00012/5/2013
PVR NEPA GAS GATHERING LLC$20,0004/5/2013
VISTA OPR INC$19,2501/15/2013
LAUREL MTN MIDSTREAM OPR LLC$19,1241/28/2013
CNX GAS CO LLC$16,7503/6/2013
INTERSTATE GAS MKT INC$16,6208/15/2013
ATLAS RESOURCES LLC$15,25012/23/2013
SENECA RESOURCES CORP$15,0443/20/2013
HEATH DANIEL L$15,00012/5/2013
TEXAS KEYSTONE INC$14,6855/15/2013
CHEVRON APPALACHIA LLC$13,75012/13/2013
EOG RESOURCES INC$13,2708/14/2013
XTO ENERGY INC$13,0009/6/2013
RANGE RESOURCES APPALACHIA LLC$12,55011/19/2013
CARRIZO (MARCELLUS) LLC$12,5001/29/2013
CITRUS ENERGY CORP$12,0005/2/2013
ELDER OIL & GAS CO$10,0005/7/2013
KASTLE RESOURCES ENTERPRISES INC$9,8007/11/2013
WPX ENERGY APPALACHIA LLC$9,5005/21/2013
GLENN D GAVIN & JOHN R GAVIN III$8,6805/1/2013
EQT PRODUCTION CO$7,5009/18/2013
SENECA RESOURCES CORP$7,5003/20/2013
JOHN KOSKY CONTR INC$7,0004/30/2013
TIMBERLINE ENERGY INC$7,0002/20/2013
LAUREL MTN MIDSTREAM OPR LLC$6,7501/28/2013
D & S ENERGY CORP$6,6508/21/2013
SENECA RESOURCES CORP$6,5003/20/2013
OLD MTN GAS CO INC$6,4753/14/2013
WILMOTH INTERESTS INC$6,0504/22/2013
NOBLE ENERGY INC$6,0009/27/2013
CHESAPEAKE APPALACHIA LLC$5,5004/5/2013
CNX GAS CO LLC$5,5002/19/2013
SNYDER BROS INC$5,2754/8/2013
HILCORP ENERGY CO$5,17510/2/2013
WINDFALL OIL & GAS INC$5,1002/11/2013
MTN GATHERING LLC$5,0003/4/2013
CITRUS ENERGY CORP$5,0001/29/2013
AUTUMN RIDGE ENERGY LLC$4,9009/30/2013
MISSING MOON OIL INC$4,7503/26/2013
CHEVRON APPALACHIA LLC$4,50012/10/2013
COUGAR ENERGY INC$4,50012/5/2013
THE PRODUCTION CO$4,5009/11/2013
EQT PRODUCTION CO$4,5004/25/2013
TAYLORSTOWN INJECTION PENNZOIL EXPLORATION$4,5003/28/2013
HOWARD DRILLING INC$4,5001/15/2013
AIELLO BROS OIL & GAS INC$4,4503/6/2013
D & S ENERGY CORP$4,3751/15/2013
SK OPR INC$4,2502/6/2013
XTO ENERGY INC$4,2008/27/2013
ENERVEST OPR LLC$4,00012/18/2013
O & R DRILLING & EXPL INC$4,00010/30/2013
MDS ENERGY LTD$4,0003/21/2013
ATLAS RESOURCES LLC$4,0002/19/2013
DROPTINE OIL PROD LLC$3,8003/27/2013
NORTHEAST NATURAL ENERGY LLC$3,8003/14/2013
KRIEBEL MINERALS INC$3,7507/29/2013
CHEVRON APPALACHIA LLC$3,7501/19/2013
CHAUTAUQUA ENERGY INC$3,7005/21/2013
MCKEAN CNTY JT VENTURE LP$3,5007/19/2013
HORIZONTAL EXPLORATION LLC$3,3008/21/2013
CATALYST ENERGY INC$3,2506/3/2013
STATESIDE ENERGY GROUP LLC$3,1502/20/2013
GREENE JOHN W SR$3,00010/30/2013
LAKE ERIE ENERGY PART LLC$3,0008/27/2013
BLX INC$2,7508/21/2013
LINDELL & MANEY LLC$2,7505/21/2013
PDC MOUNTAINEER LLC$2,7502/6/2013
DROPTINE OIL PROD LLC$2,50010/3/2013
MSL OIL & GAS CORP$2,45010/23/2013
CHESTNUT OIL LLC$2,4501/15/2013
DALLAS ENERGY LLC$2,2759/26/2013
XTO ENERGY INC$2,22011/13/2013
BRANCH JOHN D$2,00012/6/2013
CHRISTINE MARIE EXPLORATION LP$2,00010/25/2013
ARMSTRONG GAS CO LLC$2,0009/30/2013
WGM GAS CO INC$2,0009/20/2013
MDS ENERGY DEV LLC$2,0008/7/2013
TROYER GAS & OIL INC$2,0006/24/2013
SOUTHWESTERN ENERGY PROD CO$2,0002/19/2013
CONSORTIUM ENERGY LLC$2,0001/15/2013
MSL OIL & GAS CORP$1,9005/10/2013
CHRISTINE MARIE EXPLORATION LP$1,75011/13/2013
MARKWEST LIBERTY GAS GATHERING LLC$1,75010/25/2013
GALATI ENTERPRISES INC$1,60012/6/2013
LION ENERGY CO LLC$1,6009/30/2013
MOUNT CHESTNUT DEV LLC$1,5008/28/2013
ANADARKO E&P ONSHORE LLC$1,5008/9/2013
DALLAS ENERGY LLC$1,2506/3/2013
BELDEN & BLAKE CORP$1,2501/15/2013
WYANT ASSOC LL PARTNERSHIP$1,1126/7/2013
CATALYST ENERGY INC$1,00012/2/2013
MINARD RUN OIL CO$1,0003/21/2013
SARTWELL OIL CO$1,0001/22/2013
THE PRODUCTION CO$8002/6/2013
MANEY MCNEAL OIL & GAS$7872/20/2013
PLANTS & GOODWIN INC$75010/2/2013
ALVIN L COCHRAN DBA A C OIL$70012/10/2013
ARG RESOURCES INC$7006/7/2013
HALCON OPR CO INC$5913/7/2013
D & S ENERGY CORP$50011/13/2013
ENERPLUS RES (USA) CORP$5007/16/2013
BF ADVENTURES LLC$5006/20/2013
NTS ENERGY LLC$5006/7/2013
SV ABS INTEREST WETMORE PROJ$5004/29/2013
SWEPI LP$5003/14/2013
WASTE TRMT CORP$25012/19/2013

Source: DEP Oil and Gas Compliance Report

Comments

  • GibbyD

    The cancer and death causing Frackers are willing to pay the couple millions of dollars of fines for the billions of dollars of profits . The problem also is that there are not enough inspectors to find all of the violations . It seems all too corrupt to me in favor of the Frackers and their destruction of our air and water. Pennsylvania , your loved ones , properties and lives are in grave jeopardy unless we rise up and stop them .

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