On March 24, the Department of Environment Protection, the U.S. Environmental Protection Agency and the U.S. Department of Justice executed a landmark Consent Decree with Chesapeake Appalachia, LLC to resolve Chesapeake’s violations of the federal Clean Water Act and the Pennsylvania Clean Streams Law and Dam Safety and Encroachments Act associated with the failure to identify and protect wetlands at 76 oil and gas well sites in Pennsylvania.

The wells were located in Beaver, Bradford, Sullivan, Susquehanna and Wyoming counties.

The Chesapeake Consent Decree was filed in the U.S. District Court, for the Middle District of Pennsylvania on March 24, 2021.

Under the framework of the Consent Decree, Chesapeake will be required to:

-- Address the impacts to 25.778 acres of wetlands and 2,326 linear feet of streams through restoration where permits would not have been authorized, and proper permitting of allowable impacts, which includes additional stream and wetland replacement, restoration and enhancement requirements. This resolution will result in a “net increase” on average of 2:1 wetland acres and linear feet of restored streams.

-- Pay a $1,900,000 civil penalty, of which Pennsylvania will receive 50%, part of which will be paid in full and part of which will be treated as an unsecured claim through the bankruptcy claims process. The funds received by Pennsylvania will go to the Dam and Encroachments Fund and the Oil and Gas Fund.

-- Institute a Compliance Assurance Program to ensure their facilities operate in compliance with federal and state law.

-- Pay stipulated penalties should Chesapeake fail to meet its obligations in the agreement, which penalties are greater than those typically found in state only settlement documents.

“This settlement resolves many violations over several years and leads to a net increase of wetlands and restored streams. The settlement is a significant benefit to Pennsylvania’s public natural resources through restoration and replacement and, in particular, will result in a net increase of wetlands in the Chesapeake Bay watershed,” said DEP Secretary Patrick McDonnell. “This Consent Decree enforcement effort is an example of the positive collaboration with our federal partners that leads to positive results, and we applaud the current Chesapeake team for coming forward and voluntarily disclosing these violations and committing to a detailed and specific process for returning their sites to compliance.”

“This substantial federal-state settlement highlights the cooperative efforts of EPA and PADEP to protect the Commonwealth’s waters and wetlands,” said EPA Mid-Atlantic Acting Regional Administrator Diana Esher. “These natural areas are critical ecological and economic resources for all Pennsylvanians.”

In 2014, shortly after a management shake-up within the corporation and a significant wetland-related prosecution in West Virginia, Chesapeake voluntarily self-disclosed to DEP and EPA a number of probable violations.

The Chesapeake disclosure noted that an internal environmental audit process revealed the company’s systemic failure to identify wetland resources in applications to DEP to construct oil and gas facilities in Pennsylvania between 2005 and 2014.

The negotiation of the Consent Decree was temporarily interrupted when Chesapeake Energy Corporation and 40 of its affiliates including Chesapeake filed for Chapter 11 bankruptcy in the United States Bankruptcy Court, Southern District of Texas, Houston Division, on June 28, 2020.

On January 16, 2021, the Bankruptcy Court approved Chesapeake’s plan of reorganization which included requirements for Chesapeake to correct its wetland violations.

The consent decree, lodged in federal court in Williamsport, is subject to a 30-day public comment period and final court approval.

Click Here to read a copy of the consent decree.

NewsClip:

Reid Fraier: Chesapeake Drilling Fined $1.9 Million For Wetland, Stream Violations In PA

[Posted: March 24, 2021]

3/29/2021