Posts Tagged ‘Cabot’

By Joe McDonald (Staff Writer)
Published: June 10, 2010

In a ruling with potentially far-reaching consequences in Pennsylvania’s lucrative and burgeoning natural gas industry, a federal judge in Scranton on Wednesday ruled a Susquehanna County landowner can sue Cabot Oil & Gas Corp. on the grounds it fraudulently misled him into a signing a lease at a lowball rate.

The suit, filed by John Kropa, is one of several cases across the state filed by landowners who claim natural gas drilling companies fraudulently induced them to sign leases that locked them into $25-an-acre rates. In a modern-day version of the California gold rush, companies have been rushing to make deals with landowners across Pennsylvania so they can tap into natural gas from the Marcellus Shale, a geological formation that runs under most of the state.

U.S. District Court Judge James M. Munley, in an eight-page memorandum and order, noted Cabot’s agents told Mr. Kropa that the company “would never pay more than $25 per acre for the lease,” yet his “neighbors were apparently paid more than $25 an acre for leases on their property.”

“They relied on this statement and signed the lease, only to discover later that these statements were false and that others had signed far more lucrative deals” with Cabot, Judge Munley said.

Cabot’s representatives also warned that if Mr. Kropa did not sign a lease, then Cabot would take it anyway by negotiating leases with neighbors and “capture the gas,” leaving Mr. Kropa “without a lease or gas on their land,” the memorandum stated.

Mr. Kropa signed an oil and gas lease with the West Virginia company in 2006 and received a $1,275 payment for allowing the company to explore his 51-acre spread in Brooklyn Twp.

Mr. Kropa’s claims are not unique, especially for many of the leases signed before 2008, said attorney Stephen Saunders, a Scranton energy attorney.

“I think the fraud type claims will most likely be significant in cases where individual plaintiffs own larger tracts of land, say more than 100 acres, or situations where small contiguous landowners control significant areas in the aggregate hundreds of acres or more and are litigating as a group,” Mr. Saunders said.

If Mr. Kropa is successful in proving he was the victim of fraud, he could theoretically renegotiate a new lease, assuming the company still wants the gas under his land.

Judge Munley’s court order also dealt with another volatile issue in the gas drilling business: royalty payments. Mr. Kropa along with other landowers had claimed they were shortchanged by the drilling companies because they were deducing expenses from the royalties.

Judge Munley said that issue had been dealt with by the Pennsylvania Supreme Court, which ruled the royalty agreement was valid under Pennsylvania law.

Contact the writer: jmcdonald@timesshamrock.com

View this article here.

Copyright:  The Scranton Times-Tribune

By Tom Veneskytvenesky@timesleader.com
Sports Reporter

The talk inside Giles Evans’ sporting goods shop has changed recently.

For years hunters and anglers have come into Brady and Cavany Sporting Goods, in the heart of Tunkhannock, to swap stories about where the fish are biting and the big bucks are roaming. And every day, Evans leans on the counter and takes it all in.

But recently, in addition to hunting and fishing, a new topic has sprung to the forefront: gas drilling.

Evans said he hears more and more hunters and anglers expressing concerns about how the drilling boom will affect the streams they fish and the woods they hunt. It’s a concern that continues to grow as quickly as the well pads dotting the ground in Northeastern Pennsylvania.

“This is a big event up here,” Evans said. “A lot of people are making money, but a lot of people are concerned about the land and the water.”

Anglers, Evans said, are worried about the pristine trout streams in the area – Tunkhannock, Meshoppen, Mehoopany and Bowman’s creeks to name a few. They wonder if the streams can withstand the water withdrawals needed for the drilling process or, worse yet, what happens if they become contaminated.

“Anglers consider these places as pristine and they’re really concerned for the creeks,” Evans said. “The gas drillers are putting a lot of pads in around Meshoppen, near Whites Creek. That is a fantastic little trout stream. God forbid something happens there.”

Or anywhere else for that matter, according to Joe Ackourey, an avid fly fisherman and member of the Stanley Cooper Sr. Chapter of Trout Unlimited.

Ackourey said the area of Wyoming County and northern Luzerne County that is targeted for drilling is home to numerous high-quality wild trout streams. The majority of those streams, he said, flow through remote mountainous areas and could be easily damaged.

The disturbance created by gas drilling – clear-cutting for pads, erosion, increased water temperatures and water withdrawals – can be fatal to the wild trout and other aquatic life that inhabits the streams.

“I just don’t like the major changes that are going to take place to these ecosystems all for the sake of the mighty dollar,” Ackourey said. “I fear for those streams and the wild trout that inhabit them.”

Lease helps hunting club

Dallas resident Russ Bigus has hunted the mountains and farmlands of Sullivan and Wyoming counties for decades. He enjoys the abundant wildlife in the area and the pristine landscape.

Bigus also supports the gas drilling boom and the economic benefit that comes with it.

If done properly, Bigus feels, gas drilling can actually enhance the region’s natural areas.

The money paid to farmers and landowners who enter into leases with gas companies will make it easier for them to keep their land as open space, Bigus said.

While he admits there is reason to be concerned about environmental degradation, the revenue generated from drilling could prevent open space from becoming something else.

It has happened in other parts of the state, Bigus said.

“In Juniata County it used to be all farms with great habitat for wild pheasants,” he said. “That’s all gone now. Those farms have been sold for development.

“That doesn’t have to happen any more with the income generated from natural gas drilling. Hunting opportunities will remain the same or get better with our open space here remaining open.”

Bigus said his hunting club, the White Ash Landowners Association located in Cherry Township, Sullivan County, currently has a gas lease agreement for its 5,000 acres.

Much of the club’s land has been degraded by strip mining in the past, he said, and the impact from gas drilling is minimal in comparison.

“It’s a very short-lived impact from what I’ve seen,” he said. “And our land is even more financially stable now.”

Still, Bigus cautioned that drilling can be an environmental disaster if not regulated properly.

According to Luzerne County property records, private hunting and fishing clubs that have leased land for drilling include North Mountain Club in Fairmount Township, Mayflower Rod & Gun Club in Ross Township and Rattlesnake Gulch Hunting Club in Ross Township.

“Scary what could happen”

Dr. Tom Jiunta, who resides in Lehman Township, hikes and fishes around the Ricketts Glen area and near his cabin in Laporte, Sullivan County.

Both areas are potential hotspots for gas drilling activity, and Jiunta fears what could happen to the streams and trails, such as the Loyalsock Trail, that he and countless others enjoy.

Aside from the major disruption of clearing land and the potential for pollution, Jiunta said other effects could be devastating, such as noise from drilling, air pollution and the introduction of invasive species as equipment from other states is moved into the remote locations of Northeastern Pennsylvania.

“There’s a lot of subtle impacts that may not be noticed until a few years from now,” Jiunta said.

Despite his concerns, Jiunta said he isn’t totally opposed to drilling if it’s done properly “in the right places with the right regulations in place.” Pennsylvania is lacking as far with the latter, he said. “You can’t depend on the industry to police itself and we don’t have enough DEP (state Department of Environmental Protection) staff to keep on top of this.

“It’s really scary what could happen.”

As far as hunters go, some already have been affected by gas drilling. Evans, the sporting goods store owner, said hunters have told him that they lost their traditional hunting spots in Susquehanna County last deer season when the areas were deemed off limits due to gas drilling activity.

Even in areas where gas companies halted operations for the first week of deer season, Evans said, hunters were affected.

“Customers told me that in the Hop Bottom and Springville areas, the gas companies were out before the season with helicopters laying cables for seismic testing,” Evans said. “It was a noisy process and that scared a lot of deer out of the area and changed their patterns.”

Compromise needed

Bigus agreed that some hunting area will be lost while drilling commences, but believes conflicts can be reduced by an open line of communication between landowners and gas companies.

“For example, make sure they agree that there will be no activity for the first week of deer season, and have them do most of the work in the summer,” he said. “It’s important to establish a good relationship.”

And for all the concerns expressed daily by his customers, Evans said there is at least one example of how drilling can be done with little impact.

A well drilled near Nicholson, he said, was located next to a road and didn’t venture into the woods, lessening the impact on hunters and the environment, according to Evans.

But for that one positive, a looming negative experience continues to leave a sour taste with hunters and anglers.

In 2009, the Cabot Oil & Gas Corp. was fined $120,000 by DEP after methane gas infiltrated into private water wells in Dimock Township. In addition, between 6,000 and 8,000 gallons of fracking fluid leaked from a pipe at a drill site in the area and contaminated a nearby wetland.

This year Cabot was fined an additional $240,000 and ordered to shut down three wells because of methane contamination of water wells.

While DEP has prohibited Cabot from drilling in the area for one year, the damage was already done when it came to the views of hunters and anglers.

“That business in Dimock really has hunters and anglers concerned,” Evans said. “Everybody’s worried about it because there’s so much unknown, and the Cabot incident didn’t help.

“A lot of people that talk about it in the store just hope that they get done, get out and nothing gets harmed. In the meantime, they’re scared to death about what could happen.”

Copyright: Times Leader

State DEP chief talks about protecting water supplies in the Marcellus Shale areas.

By Steve Mocarskysmocarsky@timesleader.com
Staff Writer

HARRISBURG – State Department of Environmental Protection Secretary John Hanger laid down the law to representatives of oil and gas companies drilling in the Marcellus Shale at a meeting he called on Thursday.

More precisely, he laid out two sets of proposed regulations for natural gas drilling procedures and responding to reports of contamination of water supplies – proposed regulations that members of the oil and gas industry helped create.

“There were technical discussions on how to prevent gas migration from (natural gas) well sites to water wells and what to do if migration does occur and how to respond,” Hanger said in an interview from his cell phone as he was riding to Dimock after the meeting in Harrisburg.

Hanger was on his way to an interview with ABC News at the site of a natural gas well that Cabot Oil & Gas capped under DEP order after the regulatory agency determined it was one of three that leaked methane, contaminating the well water supplies of at least 14 households in the rural Susquehanna County village.

“I challenged the industry. … I made it clear that regulations would be enforced,” Hanger said, noting that DEP opened two new field offices in Northeastern Pennsylvania in response to Marcellus Shale development and is doubling its enforcement staff. “I also made it clear we were strengthening the rules,” he said.

DEP spokesman Tom Rathbun said in a separate interview that the new drilling regulations would require specific testing according to standards of the American National Standards Institute on steel casing used in all high-pressure oil and gas wells as well as the use of “oil-field grade” cement in well construction.

Rathbun said the oil and gas industry supports the implementation of those standards, and most companies already employ those practices under best-management practices. The goal is to have all companies comply, and Hanger asked the industry to voluntarily comply immediately, rather than wait until regulations receive all necessary approvals, which are expected in November.

Rathbun said the new regulations are “designed to prevent situations like the one in Dimock.” He said the issue there was incomplete casing – Cabot Oil & Gas didn’t use enough cement in the well construction.

DEP in April banned Cabot from drilling in Pennsylvania until it plugs the three wells determined to be leaking gas. Cabot has already paid a $240,000 fine and must pay $30,000 per month until the company meets its obligations.

Rathbun said one well is capped, and Cabot is currently working to cap a second.

He said most of the discussion at the meeting focused on responding to reports of gas migration into water sources.

Currently, the industry is required to report any suspected or confirmed occurrence of gas migration to DEP. The new regulations would require immediately reporting suspected or confirmed migration to DEP and to emergency responders for the affected municipality.

As chairman of the state Environmental Quality Board, Hanger on Monday will present those proposed regulations to the board for adoption. If approved, they will be sent to the House and the Senate Environmental Resources & Energy Committee.

Each legislative committee will have 30 days to review the proposed regulations before either recommending a vote or sending them to the Independent Regulatory Review Commission, which is composed of administrative law judges. A final approval is required from the state attorney general to ensure they are constitutional.

The whole process can take about six months.

Kathryn Klaber, president and executive director of the Marcellus Shale Coalition, which represents the natural gas production industry, said in a written statement that the coalition is “fully committed” to continue working with government regulators to ensure that the potential of the Marcellus Shale in the state is realized in a safe and responsible way.

“Today’s meeting with DEP represents yet another honest and straightforward discussion about the best practices needed to fully achieve this vision. Positive progress on practices relating to the management of historic and naturally occurring shallow gas, as well as other initiatives related to transparency and well integrity, will help our industry continue to strengthen its safety and environmental record while continuing to create tens of thousands of jobs each year for residents of this state,” Klaber said.

Steve Mocarsky, a Times Leader staff writer, may be reached at 970-7311.

Copyright: Times Leader

Worker for subcontractor at Cabot site in Dimock Township was hit on head with a pipe.

The Associated Press

DIMOCK TWP. – A worker at a natural gas drilling site in Susquehanna County died Monday at Geisinger Wyoming Valley Medical Center after being hit on the head by a pipe.

The Luzerne County Coroner’s Office identified the victim as 41-year-old Gregory Walker. His death was ruled accidental. Coroner John Corcoran could not provide his hometown or any additional information.

Walker was working at a Cabot Oil & Gas Corp. drilling rig in Dimock Township, when he was hurt Monday. He was taken to a hospital in Montrose and then flown by helicopter to the hospital in Plains Township, where he died Monday. Cabot spokesman George Stark said Walker worked for a subcontractor.

Copyright: Times Leader

DIMOCK, Pa. (AP) — A worker at a natural gas drilling site in northeastern Pennsylvania has died after being hit on the head by a pipe.

The Luzerne County coroner’s office identified the victim as 41-year-old Gregory Walker.

Walker was working at a Cabot Oil & Gas Corp. drilling rig in Dimock Township, Susquehanna County when he was hurt Monday morning. He was taken to a hospital in Montrose and then flown by helicopter to Geisinger Wyoming Valley Hospital in Wilkes-Barre, where he died Monday afternoon.

The coroner’s office ruled the death as accidental.

Cabot spokesman George Stark says Walker worked for a subcontractor.

Copyright: Times Leader

By Steve Mocarskysmocarsky@timesleader.com
Staff Writer

SCRANTON – U.S. Sen. Robert Casey wants the U.S. Environmental Protection Agency to investigate and respond to groundwater contamination that the state has linked to a natural gas well in Susquehanna County.

In a letter to EPA administrator Lisa Jackson, Casey noted that natural gas drilling in the Marcellus Shale region has led to job creation, strengthened the state economy and reduced dependence on foreign oil.

However, Casey writes, “the highly variable and unpredictable nature” of hydraulic fracturing (fracking) “that can lead to the contamination of drinking water is of great concern.” He noted the gas and oil industry is exempt from complying with the federal Safe Drinking Water Act.

Casey said there are many reasons for requesting EPA involvement, including recent incidents in the state that “raise the question of whether the necessary steps have been taken to protect Pennsylvania families and communities against the detrimental side effects of drilling.”

He pointed to methane gas infiltration into private water wells in Dimock Township and noted that several wells have exploded because of a suspected buildup of natural gas.

Casey said the state Department of Environmental Protection fined Cabot Oil & Gas Corp. $240,000, ordered the plugging of three natural gas wells believed to be the source of the contamination, prohibited Cabot from drilling in the vicinity for one year and required Cabot to install permanent water treatment systems in affected homes.

Casey also noted that, according to DEP, between 6,000 and 8,000 gallons of fracking fluid leaked from a pipe at a drill site and contaminated the surrounding area and a wetland in Susquehanna County in two separate spills on the same day in September 2009 – one in the afternoon that leaked 25 to 50 barrels of fluid, another in the evening that leaked 140 barrels.

“I commend DEP for taking action, but I remain concerned that the current status of federal and state oversight of gas drilling may be inadequate” to protect families living near drilling sites, Casey wrote.

The senator asked for a meeting with appropriate EPA officials to discuss natural gas drilling and whether the agency could investigate water and environmental contamination. He said he hopes Science Advisory Board officials would also attend the meeting to discuss the scope, timing and methodology of a congressionally mandated study the EPA has launched on hydraulic fracturing.

An EPA spokeswoman said officials are reviewing Casey’s letter and expect to respond in the near future.

Steve Mocarsky, a Times Leader staff writer, may be reached at 970-7311.

Copyright: Times Leader

Cabot Oil & Gas Corp. denies the allegation and said it has evidence to back its position.

By Steve Mocarskysmocarsky@timesleader.com
Staff Writer

DIMOCK TWP. – The state is alleging an energy company is responsible for contamination of a water well, a spring and wetlands after a black fluid was discovered recently near a Marcellus Shale drilling site in Susquehanna County.

The company denies responsibility.

The state Department of Environmental Protection on Thursday sent a notice informing Cabot Oil & Gas Corp. that violations of the state Clean Streams Law, the Oil & Gas Act and the Solid Waste Management Act were documented on site visits near the A&M Hibbard well pad on March 22-24.

The visits were the result of a phone report from Cabot of the presence of a black fluid in a ditch near the site on March 21.

“The investigation revealed that black fluid originating on the … drill pad was not properly contained in a pit or tank (and that the fluid) entered a hand dug well and a spring near the location, as well as a wetland downgradient of the spring,” the notice states.

“We believe it was waste from their drill pit,” DEP spokesman Dan Spadoni said Thursday.

He said he doesn’t think anyone was using the spring for drinking water, and the well was used only as “a back-up” water supply by the property owner.

Cabot has 10 days to provide the cause(s) of the incident, when the violations were or will be corrected, the steps taken to prevent their recurrence and documentation of clean-up activities.

DEP also asked Cabot to investigate the condition of the drill pit and liner and “strongly recommends that the liner and (drill) cuttings be removed from the pit and properly disposed of prior to restoration of the site.” The department also requested notification after all cuttings and fluid are removed from the pit so DEP can inspect the liner.

Cabot spokesman Ken Komoroski said the company has not confirmed the source of the fluid, but has confirmed that “Cabot activities are not the source.”

Komoroski said Cabot checked with its “independent third-party consultant,” which concluded that “the observance of black water in the well did not and could not have occurred as a result of Cabot activities” based on “observation and extensive analytical testing.” He said the well and spring contained “total and fecal coliform, which is indicative of human or animal waste” and that “the materials that exist in the well in high concentrations don’t exist on Cabot locations.”

Asked if any of the materials Cabot uses were found in the well, Komoroski said the company does not yet have all analytical results from lab tests and a final report is still in draft form. DEP continues to investigate the incident and Cabot will continue to cooperate and support the department’s efforts, he said.

The Clean Streams Law and Solid Waste Management Act provide for civil penalties and criminal fines ranging from a maximum of $10,000 per day to a maximum of $25,000 per day for each violation. Each day of continued violation constitutes a separate offense.

Copyright: Times Leader

DEP probes Cabot Oil & Gas query about “discharge of black water” in Dimock Twp.

By Steve Mocarskysmocarsky@timesleader.com
Staff Writer

DIMOCK TWP. – The state Department of Environmental Protection is investigating a possible leak or spill at a natural gas drilling site in Susquehanna County.

Mark Carmon, DEP spokesman at the Wilkes-Barre office, said the department received a call to its emergency response line from Cabot Oil & Gas Co. on Sunday afternoon informing the department that employees found “a discharge of black water” at the site.

The call was referred to the department’s Gas & Oil Program team, which operates from DEP’s Williamsport office.

Dan Spadoni, DEP spokesman at that office, said the team is investigating “the possibility of a spill or leak at Cabot’s Hibbard drill pad” since Monday, but has not yet determined if there was a spill or leak at the site.

Spadoni said there are two wells on one pad at the site, and no drilling activity is currently taking place. He said the team took samples from a private drinking water well that is currently not being used, from two nearby springs and from the site pit.

The samples are being analyzed at DEP’s lab in Harrisburg.

“We need to see those results to see what our future course of action will be,” Spadoni said.

He expected lab results back in a week or two.

Spadoni said Cabot’s consultant also collected samples and the drill cuttings in the pit for analysis. Site pits, which are lined, are where the residue from the drilling and hydraulic fracturing processes ends up, he said.

There was discussion on an online Susquehanna County gas forum about the possibility of a nearby pond being drained, but Spadoni said he had no information about the pond and no samples were collected from it.

He confirmed Cabot had a vacuum truck on-site “in response to where this dark fluid was observed. It was a voluntary measure on their part,” he said.

Spadoni said he believes there was no recent drilling activity at the site. The site had not been shut down because of the discovery of the liquid, he said.

Ken Komoroski, spokesman for Cabot Oil & Gas, said there was no indication of any environmental contamination or pollution.

“Discolored water was observed over the weekend and Cabot immediately responded to observing water in a ditch. We notified DEP and took the additional measure to have a vacuum truck remove water from ditch,” Komoroski said, adding that employees noticed the water while driving by the site on Route 29.

Cabot also drained the pit to check if it was possible the water was leaking from the drill pit, but the pit liner was “completely intact. All indications are that it was not a result of Cabot activities,” Komoroski said.

Komoroski said the drill site has been in existence “for quite some time, and there doesn’t seem to be any reason” for the discolored water to appear “since it hasn’t been active site. We were not able to identify any potential cause or relationship.”

He said the water was found “in the vicinity of the site, but close enough that we wanted to consider the possibility that it was related to our activities.”

Steve Mocarsky, a Times Leader staff writer, may be reached at 970-7311.

Copyright: Times Leader

The Associated Press

DIMOCK — State regulators are fining a Houston-based company because its natural-gas drilling operations polluted residents’ water wells in northeastern Pennsylvania.

Department of Environmental Protection officials said Wednesday that Cabot Oil & Gas Corp. is paying $120,000 in connection with its finding that gas seeped underground into 13 water wells in Susquehanna County.

Cabot has drilled numerous gas wells into the Marcellus Shale rock formation in the rural county, about 15 miles south of the New York State border.

On Jan. 1, a water well exploded at a home nearby Cabot’s operations, prompting an investigation.

The department says its approval of Cabot’s well casing and cementing plans is now required before Cabot can drill.

It also says Cabot must develop a plan to permanently restore or replace the affected water supplies.

Copyright: Times Leader

Authorities allowed the company to resume work after corrective actions.

By Rory Sweeneyrsweeney@timesleader.com
Staff Writer

The state Department of Environmental Protection announced on Thursday that it has fined Cabot Oil and Gas $56,000 for three polluting spills at one of its natural gas drilling sites in Susquehanna County.

The fine comes a little more than a month after the spills, which all occurred within a week of each other at the Heitsman well in Dimock Township and totaled about 8,400 gallons of fluids. Some of the liquid, which was a mix of mostly water and a gel that facilitates the drilling process, drained into an adjacent wetlands and Stevens Creek.

“The department presented a number to us and we thought under the circumstances that it was appropriate and not something that we wanted to fight about,” said Ken Komoroski, Cabot spokesman. “We’re just going to move forward.”

Within a few days of the spill, DEP ordered Cabot to halt hydraulic fracturing – the process that caused the spills – and submit an engineering analysis about what went wrong and how it will be avoided in the future.

Cabot’s report said the failure was caused by pressure surges and that significant elevation differences between where the liquid was stored and where it was being pumped to contributed to the problem.

The report includes a list of corrective actions that Cabot has agreed to take, among them providing better containment and pressure-regulating valves for sites where elevation is a factor.

DEP approved the report on Oct. 16 and allowed Cabot to resume “fracking.” The process forces water, sand and a mix of chemicals into the rock layer that contains the gas, causing fractures that release the gas up the well.

Gas drilling has boomed in the Northern Tier since fracking and horizontal drilling technologies have made it financially feasible for companies to drill into the Marcellus Shale, a layer of gas-laden rock that runs about a mile underground from New York into Virginia.

Copyright: Times Leader