EQT fined $1.1 million for Marcellus Shale pit leak

A Pennsylvania hearing board has fined EQT Corp. $1.1 million for a 2012 leak from a Marcellus Shale wastewater pit in Tioga County, significantly less than the $4.5 million in penalties that state regulators wanted for the breach they said caused the largest area of contamination in the oil and gas regulatory program’s history.

In a 4-1 decision issued Friday, the Environmental Hearing Board said the Downtown-based oil and gas company “caused severe harm” to state waters through its “reckless conduct” in violation of the Clean Streams Law.

But the board substantially reduced the final penalty because it said the company was highly cooperative in the cleanup after an initial six-week period when EQT’s response to signs of a leak was “completely unacceptable.”

The board’s penalty calculation was not ultimately influenced by a January Commonwealth Court decision related to the same leak, which limited fines to days when pollution is actively released into waterways. The Department of Environmental Protection has appealed that decision to the Pennsylvania Supreme Court.

The hearing board majority, in an opinion written by Judge Bernard A. Labuskes Jr., said it did not know whether or not it was bound by the higher court’s opinion, but the judges said they did not need to resolve the issue because they chose not to impose any penalty for days after EQT removed most of the contaminated rock and soil beneath the 5.2-million-gallon pit’s damaged synthetic liner.

An EQT spokeswoman said the company is reviewing the opinion. DEP press secretary Neil Shader said the department is pleased with the outcome of the case.

The board assessed the maximum $10,000-per-day penalty for 47 days and lesser penalties for 104 days until Sept. 27, 2012, when EQT excavated the pit in Duncan Township. New pollution releases continued “at a very low level” until June 2013, when the pit was reclaimed into a meadow, and even up to the date of the board’s hearing four years later, but the board decided not to assess a fine for that period.

At times, the majority offered a blistering critique of EQT’s behavior. The opinion describes a litany of failures in the company’s design, operation and supervision of the pit site and its response once signs of a leak were obvious, including continuing to add water to the pit for three weeks after the first groundwater monitoring samples indicated a likely leak and, at one point, refusing to meet with DEP to discuss it.

“Department personnel testified that no other operator in the state has snubbed the department in this way under circumstances far less dire,” the majority wrote.

Rather than acknowledging mistakes, the board wrote, the company offered “any number of poor excuses”: “EQT, a multibillion-dollar corporation, refused to meet with the department because it said it could only devote limited resources to the cleanup and it needed to concentrate exclusively on its field activities. It said a nearby road rally interfered with its ability to empty the pit. It said it left the pit open for months to preserve its litigation position vis-à-vis Terra Services [a contractor]. It said it did not discover contaminated seeps because the woods were dense and difficult to walk through. It said that the impounded industrial waste or ‘pit water’ was essentially just salty water.”

The board indicated that EQT’s violation of a separate regulation prohibiting pollution might have justified a “severe penalty” but DEP did little to argue for it and instead asked only for a $10,000 fine, which the board included in its total assessment.

Other factors that influenced the lesser fine included that the leak did not affect any drinking water supplies and DEP failed to prove that the leak harmed aquatic life in the high quality stream and tributary that the pit’s pollution degraded.

The constituents that leaked — barium, lithium, strontium, chloride — also occur naturally in lower levels in waterways, and the condition of the affected streams and wetlands have improved over time.

Judge Steven C. Beckman partly concurred and partly dissented with the majority’s opinion, saying that the Commonwealth Court decision was binding precedent in this case and the majority disregarded some parts of that opinion.

In particular, he said the violations — and the fine — should have ended on June 16, 2012, because pollution of new water that came in contact with the contaminated rock and soil beneath the pit after that date was the kind of passive damage that the Commonwealth Court rejected as a new daily violation.

By that calculation, EQT’s fine would have been cut in half.

Laura Legere: llegere@post-gazette.com

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