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EPA, Justice Dept., DEP Announce $5.275 Million In Penalties, Plus $1.4 Million In Abandoned Well Plugging Funding Against Shale Gas Drilling Companies-- XTO Energy, Inc., Hilcorp Energy Company For Federal, State Clean Air Act Violations

On November 21, the US Environmental Protection Agency, US Department of Justice and the Pennsylvania Department of Environmental Protection announced two settlements with oil and gas operators in Pennsylvania involving operations in Butler, Lawrence and Mercer Counties.

In separate agreements, XTO Energy Inc. (XTO) [ExxonMobil] and Hilcorp Energy Company (Hilcorp), agreed to resolve alleged Clean Air Act and Pennsylvania Air Pollution Control Act violations involving their oil and gas production operations in Pennsylvania.

Under the settlements, XTO agrees to pay a $4 million civil penalty and Hilcorp agrees to pay a $1.275 million civil penalty.

Each of these amounts will be shared equally by the United States and the Department of Environmental Protection, which is a co-plaintiff in both cases.

In addition to the civil penalties, both companies will undertake compliance measures to achieve major reductions in harmful emissions at their oil and gas production facilities in Butler County, Lawrence County and Mercer County.

Abandoned Well Plugging

XTO will also be required to work with PADEP to identify the heaviest polluting abandoned oil and gas wells in western Pennsylvania and spend at least $1.4 million to plug or remediate them.

Many of these “orphan” wells are existing significant sources of methane.

“Hilcorp and XTO Energy’s violations contributed to smog that reduces air quality, as well as methane releases that are a primary driver of near-term climate change,” said Assistant Administrator David M. Uhlmann for EPA’s Office of Enforcement and Compliance Assurance. “These settlements are the latest in EPA’s urgent efforts to limit the greenhouse gas emissions that cause climate change and hold corporate polluters accountable for jeopardizing public health.”

“These actions are the result of our continuing efforts to ensure that oil and gas operators comply with the Clean Air Act,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “The commitments under the settlements will significantly reduce pollution from these companies’ operations, including volatile organic compounds that contribute to ground-level ozone, and methane, a potent greenhouse gas.”

“Today’s settlements reinforce a simple message: if your company contaminates the air in this district with harmful pollution, you will be held accountable under federal law,” said U.S. Attorney Eric G. Olshan for the Western District of Pennsylvania. “Through the hard work of our office and our law enforcement partners, XTO Energy and Hilcorp will be required not only to pay penalties related to the pollutants they already released, but also to protect against future harm through compliance measures that will reduce emissions of harmful pollutants. We remain steadfast in our efforts to protect the people of western Pennsylvania and the air they breathe.”

“Pennsylvanians have a right to clean air, and the Shapiro administration continues to hold polluters accountable for infringing on that right,” said Acting Pennsylvania Department of Environmental Protection (PADEP) Secretary Jessica Shirley. “These settlements will result in lower emissions and cleaner air for the people of the Commonwealth.”

Mitigation Measures

As part of the settlement, XTO must also undertake a project to mitigate harm attributable to XTO’s alleged violations under its agreement.

Specifically, by Dec. 31, 2027, XTO will be required to work with PADEP to identify the heaviest polluting abandoned oil and gas wells in western Pennsylvania and spend at least $1.4 million to plug or remediate them.

Many of these “orphan” wells are existing significant sources of methane.

The work that XTO will do will result in the reduction of over 1,960 tons of carbon dioxide equivalent emissions per year released as methane, similar to the reductions achieved by taking 420 cars off the road for one year.

The settlement will also eliminate nearly 120 tons of volatile organic compound (VOC) emissions annually.

Background

The XTO settlement resolves allegations by the EPA and PADEP that XTO failed to comply with federal and state requirements to capture and control air emissions from 11 of its oil and gas production facilities in Butler County.

The EPA identified the alleged violations through field investigations conducted in 2018 and 2019.

Hilcorp must also undertake a project to mitigate harm attributable to the company’s alleged violations.

Hilcorp will retrofit at least 164 pneumatic controllers that emit pollution with non-emitting process controllers at eight of the company’s facilities located in Lawrence and Mercer counties at least three years earlier than required under law.

EPA projects that the Hilcorp agreement will result in the reduction of over 160 tons of VOC emissions annually and 5,200 tons of carbon dioxide equivalent emissions per year released as methane.

The reductions in methane from the settlement are similar to the reductions that would be achieved by taking 1,100 cars off the road for one year.

The Hilcorp settlement resolves allegations by the EPA and PADEP that the company failed to comply with federal and state requirements to capture and control air emissions from six of its oil and gas production facilities in Lawrence and Mercer counties.

As a result of these alleged violations, both XTO and Hilcorp released methane and VOCs directly into the air instead of capturing and controlling the gas using specially designed equipment.

Methane, a climate super pollutant, is a potent greenhouse gas that contributes to climate change, and VOCs contribute to ground-level ozone, which adversely affects human health.

XTO is a natural gas extraction and production company that is a directly held, wholly owned subsidiary of ExxonMobil. Its operations stretch from the Great Plains to Appalachia.

It holds interests in more than 50,000 producing oil and natural gas wells. Among these holdings includes operations in 15 counties (including Butler County), covering 534,000 acres in western Pennsylvania.

Hilcorp is a privately-owned company registered to do business in Pennsylvania and headquartered in Houston, Texas.

Hilcorp engages in oil and gas exploration, development and production across the United States, with active production operations in Alabama, Alaska, Colorado, Louisiana, New Mexico, Ohio, Pennsylvania, Texas and Wyoming.

These settlements are part of the EPA’s National Enforcement and Compliance Initiative Mitigating Climate Change. This initiative focuses, in part, on reducing methane emissions from oil and gas and landfill sources.

The consent decrees were filed with the United States District Court, Western District of Pennsylvania, and are each subject to a 30-day comment period.

The complaint and the proposed consent decree are available on the Justice Department’s Proposed Consent Decree webpage.

More information on these settlement agreements is available on the agency’s Hilcorp Energy (Pennsylvania) Company Settlement webpage and XTO Energy Inc. Settlement Summary webpage.

Click Here for the EPA announcement.

NewsClips:

-- Post-Gazette - Anya Litvak: Exxon And Hilcorp Shale Gas Drillers Settle Environmental Violations With Millions In Fines And Promised Air Quality Benefits

-- CNHINews: Hilcorp Shale Gas Company One Of 2 Firms Facing EPA, DEP Penalties For Air Pollution

-- WKBN27: Pennsylvania Oil & Gas Producers To Pay EPA Penalty

PA Oil & Gas Industry Public Notice Dashboards:

-- PA Oil & Gas Weekly Compliance Dashboard - Nov. 16 to 22 - $5.257 Million In Penalties; Conventional Well Owners Issued More Violations Than All Of 2023; More Abandoned Wells; Failure To Submit Shale Gas Reports [PaEN]

-- EPA, Justice Dept., DEP Announce $5.275 Million In Penalties, Plus $1.4 Million In Abandoned Well Plugging Funding Against Shale Gas Drilling Companies-- XTO Energy, Inc., Hilcorp Energy Company For Federal, State Clean Air Act Violations [PaEN]

-- DEP So Far In 2024: 6,907 Violations Issued To Owners Of Conventional Oil & Gas Wells - 153% More Than In 2021; 833 Violations For Abandoning Their Wells -- Exceeding All Of 2023 [PaEN]

-- Oil & Gas Wastewater Release At Bear Lake Properties Injection Well In Warren County Went Unreported For 109 Days; More Contamination Discovered Along Related Wastewater Pipeline Route [PaEN]