Chesapeake Appalachia, LLC Clean Water Settlement
(WASHINGTON, DC - December 19, 2013) The U.S. Environmental Protection Agency and the Department of Justice announced that Chesapeake Appalachia, LLC, a subsidiary of Chesapeake Energy, the nation’s second largest natural gas producer, will spend an EPA-estimated $6.5 million to restore 27 sites damaged by unauthorized discharges of fill material into streams and wetlands and to implement a comprehensive plan to comply with federal and state water protection laws at the company’s natural gas extraction sites in West Virginia, many of which involve hydraulic fracturing operations.
Overview of Company
Chesapeake Appalachia, LLC (Chesapeake Appalachia) is a West Virginia limited liability corporation and a subsidiary of Chesapeake Energy Corporation, the nation’s second largest natural gas producer, operating within Chesapeake Energy’s Eastern Division.
Chesapeake Appalachia engages in the exploration, production, processing, and transportation of natural gas in the Appalachian Basin. The company has oil and natural gas properties in West Virginia, Pennsylvania, and Ohio.
Violations
The Complaint alleges violations of Sections 301(a) and 404 of the Clean Water Act (CWA), 33 U.S.C. §§ 1311(a) and 1344, which prohibits the discharge of dredge and/or fill material to waters of the United States except in compliance with a permit issued by the Army Corps of Engineers.
The Consent Decree resolves unauthorized discharges of dredged and/or fill material at 27 sites in West Virginia. The unauthorized discharges occurred at 27 sites in Boone, Kanawha, Lewis, Marshall, Mingo, Preston, Upshur and Wetzel Counties in West Virginia.
The discharges at 26 of the sites are associated with the construction of natural gas extraction facilities (e.g., pads, impoundments, and road crossings). The discharges at the remaining site are associated with the construction of natural gas transportation activities. In each case, the discharges are associated with the construction of facilities related to extraction of natural gas, including but not limited to well pads, impoundments, road crossings and pipelines.
Impacts
The alleged violations impacted approximately 12,874 linear feet of stream and 3.74 acres of wetlands.
Site Background
The alleged violations being resolved by this settlement occurred at 27 sites located in the West Virginia Counties of Boone, Kanawha, Lewis, Marshall, Mingo, Preston, Upshur and Wetzel.
Of the 27 sites, four are freshwater impoundments, one is a compressor station, six (in Upshur, Boone, Mingo and Kanawha counties) involve operations related to vertical wells, and the remaining 16 sites involve operations related to horizontal drilling in Wetzel, Marshall, Upshur, and Preston Counties.
Related Case
During 2012, Chesapeake Appalachia pled guilty to three federal misdemeanor counts of unauthorized discharge of dredge and/or fill material at one of the locations in Wetzel County and paid a criminal fine to the government. The injunctive relief associated with the site at issue in the criminal case is included within the required injunctive relief in this Consent Decree.
Injunctive Relief
The injunctive relief includes: (1) restoration and/or appropriate compensatory mitigation where restoration is not feasible; (2) development and implementation of a CWA employee training program; and (3) development and implementation of an operational protocol to be used in West Virginia to assure compliance with Section 404 of the CWA.
Restoration and/or Mitigation
Chesapeake Appalachia is required to restore all sites where restoration is feasible. The company will monitor all restored sites for up to ten years in order to assure the success of the restoration. Additionally, this Consent Decree includes various requirements intended to permanently preserve the restored sites. The company will also perform compensatory mitigation, which will likely take the form of purchasing credits from a wetland mitigation bank located in the same, or nearby, watershed.
CWA Employee Training Program
Chesapeake Appalachia will provide the training to its employees, contractors, and affiliates whose responsibilities include the design and construction or supervision of employees of oil and gas facilities, in West Virginia, Virginia, Maryland, and Pennsylvania for a period of five years after the entry of this Consent Decree.
West Virginia Operational Protocol
The company will integrate a CWA Section 404 compliance protocol into its operating procedures in West Virginia. The protocol requires Chesapeake Appalachia to use a Qualified Wetlands Professional to assess all aquatic resources within any proposed limit of disturbance prior to submission of any application to:
- The West Virginia Department of Environmental Protection for new and expansive construction of well pads or impoundments beyond its currently approved limit of disturbance, and
- The West Virginia Department of Transportation for construction of any associated access road(s).
Additionally, for relevant sites, Chesapeake Appalachia must prepare an alternatives analysis, design facilities to avoid and minimize impacts to aquatic resources, and implement construction techniques that are certified by a registered professional engineer to ensure rapid stabilization of disturbed earth while assuring appropriate erosion and sediment controls are consistent with State or local erosion requirements, and ensure that no earth disturbance occurs until appropriate permits are obtained pursuant to CWA Section 404 and applicable West Virginia law.
Pollutant Reduction
In CWA Section 404 cases, pollutant reduction is measured by the number of linear feet mitigated for streams and the number of acres mitigated for wetlands. The injunctive relief required in this Consent Decree will mitigate the 12,874 linear feet of stream and 3.74 acres of wetlands impacted by Chesapeake Appalachia’s activities.
Civil Penalty
Chesapeake Appalachia will pay a penalty of $3.2 million, divided equally between the United States and its co-plaintiff, the State of West Virginia. This civil penalty is the largest ever obtained under the CWA’s provisions prohibiting the discharge of dredged and/or fill material into waters of the United States without a CWA permit.
Comment Period
The proposed settlement, lodged in the U.S. District Court for the Northern District of West Virginia, is subject to a 30-day public comment period and final court approval. Information on submitting comments is available at the Department of Justice website.
For more information, contact:
Clarke Thurmon
Water Enforcement Division
U. S. Environmental Protection Agency
1200 Pennsylvania Ave, NW (MC-2243A)
Washington, DC 20460
Clarke Thurmon (thurmon.clarke@epa.gov)
(202) 564-5587