EQT, DEP take their cases to court over 2012 flowback leak

The state’s top environmental regulator wants to slap a record fine on EQT Corp. over a 2012 incident at a Marcellus Shale drilling site in Tioga County that polluted soil and nearby waterways, but the Downtown-based natural gas driller said the agency is more concerned with grabbing headlines than enforcing the state’s environmental laws.

The Pennsylvania Department of Environmental Protection announced Tuesday it is seeking a record $4.53 million fine through the Environmental Hearing Board for what the state describes as a major pollution incident at a well pad operated by EQT. The environmental hearing board is an administrative court that hears DEP cases as well as appeals of the department’s decisions.

The DEP said an unknown, but significant, amount of flow-back water — water containing sediment, metals and salt that returns to the surface after hydraulic fracturing — leaked from an impoundment at the shale drilling site in Duncan.

In a strongly worded response issued Tuesday, EQT called the timing of the action suspect, noting the DEP began pursuing the record fine less than a month after EQT filed a lawsuit in Commonwealth Court against the department, challenging its interpretation of the state’s Clean Streams Law. The energy company filed its complaint Sept. 19.

The DEP had harsh words for EQT, accusing the energy company of not cooperating during the investigation in 2012.

“EQT fails to recognize the ongoing environmental harm from the significant amount of waste released by its leaking 6 million gallon impoundment,” said acting DEP Secretary Dana Aunkst in a statement. “The department does not tolerate this unacceptable attitude toward compliance and proper protection of Pennsylvania’s environment.”

EQT had equally harsh words, accusing the Department of Environmental Protection of ignoring the company’s attempts to work with the agency and misstating aspects of the case.

EQT said the leaking impoundment, which was caused by a contractor that had damaged the bottom of the liner meant to contain the fluid, initially prompted the DEP to seek a $1.27 million fine.

“The DEP’s insistence on a $1.27 million penalty during settlement negotiations, with no room for discussion or negotiation, followed by a $4.53 million demand in a lawsuit filed in response to EQT’s attempt to clarify the law in Commonwealth Court, illustrates the problem with the agency’s interpretation of the Clean Streams Law,” said Lewis Gardner, EQT’s general counsel and vice president, external affairs.

“The timing is suspect and the exorbitant proposed penalty is inconsistent with both past and recent agency practice,” Mr. Gardner said. “The DEP’s proposed penalty seems designed more for headlines than for the lawful enforcement of the commonwealth’s environmental statutes.”

A DEP spokesman said the department does not comment on ongoing litigation.

The DEP’s proposed penalty in the EQT case would edge out the $4.15 million fine that Fort Worth, Texas-based Range Resources agreed to pay in September to settle environmental violations related to six Marcellus Shale gas drilling and fracking wastewater impoundments in Washington County.

In the EQT case, the dispute centers on an impoundment that leaked flow-back water into the surrounding area. The industrial water damaged vegetation and contaminated nearby waters, including Rock Run, a high quality stream; an unnamed tributary to Rock Run; and other groundwater seeps and springs, according to the DEP.

EQT said it stopped using the impoundment when the leaks were discovered. It also contends that it has cleaned up the surrounding area based on state standards, and that third-party testing shows waterways are healthy.

Mr. Gardner said, “A reasonable penalty is appropriate to hold EQT accountable for the actions of its contractor,” but the DEP is overreaching in its interpretation of the law in an attempt to justify an excessive demand.

The DEP said problems at the site were not resolved quickly.

“EQT demonstrated a lack of cooperation by adding more flowback water to the impoundment even after becoming aware of the elevated chlorides in the nearby monitoring wells,” the DEP said.

The agency said monitoring of nearby waterways has shown contamination is present at high enough levels that water is still being collected and transported off-site for proper treatment and disposal. Groundwater also continues to show contamination present above standards, the department said.

The DEP’s action comes on the heels of a separate criminal complaint filed by the state attorney general on behalf of the Fish and Boat Commission.

“DEP’s complaint seeks civil penalties under the Clean Streams Law. Our complaint is a criminal one that includes charges under the Fish and Boat Code,” said Eric Levis, press secretary for the state Fish and Boat Commission in an email Tuesday.

EQT said it “was discussing settlement with the commission, and remains ready and willing to continue such discussions with both the commission and the Office of the Attorney General on that separate complaint.”

Stephanie Ritenbaugh: sritenbaugh@post-gazette.com or 412-263-4910. First Published October 7, 2014 12:54 PM

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