DEP Issues Cabot Oil & Gas Second Order To Correct Water Problems In Dimock

The Department of Environmental Protection this week issued a second order to Cabot Oil & Gas Corp. requiring the company to take extensive actions and help the residents of Dimock Township, Susquehanna County, affected by the company's drilling activities.

           Under the consent order and agreement, Cabot must plug three wells within 40 days that are believed to be the source of migrating gas that has contaminated groundwater and the drinking water supplies of 14 homes in the region. It must also install permanent treatment systems in those homes within 30 days.
            Additionally, DEP Secretary John Hanger said his agency is immediately suspending its review of Cabot's pending permit applications for new drilling activities statewide until it fulfills its obligations under the order issued today. Cabot also is barred from drilling any new wells for at least one year in the Dimock Township area.
            The action follows Cabot's failure to abide by the terms of a November 2009 consent order and agreement with DEP which required the company to correct water supply problems over the 9 square miles impacted by their drilling operations.
            "Cabot had every opportunity to correct these violations, but failed to do so. Instead, it chose to ignore its responsibility to safeguard the citizens of this community and to protect the natural resources there," said Secretary Hanger. "I have ordered that all of Cabot's permit applications for further drilling in any region of the state be put on-hold, indefinitely, until the region's homeowners receive their new water treatment systems, the fines are paid, and the wells are plugged.
            "Gas migration is a serious issue that can have dire consequences to affected communities and we will not allow Pennsylvania's citizens to be put in harms way by companies that chose not to follow the law."
            During recent inspections, DEP identified five additional defective Cabot gas wells and another home water supply that has been affected by gas migration, bringing to 14 the number of impacted water supplies in the Dimock area.
            Secretary Hanger said DEP also will continue to investigate another 10 Cabot gas wells in the Dimock area over the next 85 days that could be sources of migrating gas and determine whether Cabot should be ordered to plug some or all of those wells.
            The original November 2009 consent order and agreement directed Cabot to meet a March 31 deadline to fix defective cement and well casings on certain wells and to prevent the unpermitted natural gas discharge into groundwater that violated the state's Clean Streams Law and the Oil and Gas Act. The company did not meet this deadline, while the migrating gas continues to impact water supplies at homes in a nine-square-mile area near Carter Road.
            As part of the order, Cabot has also paid a $240,000 fine to the Commonwealth, which has been deposited into the state's well-plugging account. It also must pay $30,000 per month beginning in May until DEP has determined that the company has met its obligations under the 2009 order.
            "Companies drilling in the Marcellus Shale have the legal responsibility to design and construct their wells to keep all gas contained within the wells and to prevent gas from moving into fresh groundwater. These standards are not mere suggestions or recommendations," Secretary Hanger said. "Oil and gas companies doing business in Pennsylvania will follow the environmental rules and regulations put in place to protect citizens and our natural resources or face aggressive action by this department."
            In response to the order, Cabot issued a statement saying--
            "This modified order does not impact the number of wells scheduled to be drilled under Cabot's 2010 drilling effort, nor will it impact our production guidance," said Dan O. Dinges, Chairman, President and Chief Executive Officer, Cabot Oil & Gas Corporation. "Specifically, we have no rigs drilling in the area presently, and of the eight wells scheduled in the affected area later in the year, these wells will be replaced with other wells." Dinges added, "We may experience a slight delay for eight wells drilled that are waiting on completion in the area. However, with our better-than-expected results from the overall operation and 49 stages of fracs from six wells waiting to be turned in line, we see no need to adjust production guidance. We are currently producing approximately 110 Mmcf per day with anticipated production increases when we start our first compressor at Lathrop in early May."
            Cabot Oil & Gas Corp. is headquartered in Houston, Texas with a mailing address in Pittsburgh.
           NewsClips:  Contamination Suspends Cabot's PA Gas Drilling
                                 Gas Company Slapped With Drilling Ban And Fine
                                 State Suspends Gas Driller Over Water Contamination
                                 Polluted Wells Get Driller Banned
                                 DEP Takes Action Against Cabot Oil & Gas
                                 Cabot Ban Inspires Luzerne County Partnership
                                 Luzerne Group Pleased By Fine On Gas Driller



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