Pennsylvania's Department of Environmental Protection fined a Marcellus Shale operator $240,000 Thursday, ordered it to plug three gas wells, and banned it from drilling for one year in a Susquehanna County community that has been plagued with contaminated water wells.
DEP Secretary John Hanger said Cabot Oil & Gas Corp. of Houston had failed to correct problems that caused gas to migrate to 14 residential water wells in Dimock Township. One water well exploded last year, an incident often cited by activists who are seeking a moratorium on drilling.
Cabot was fined $120,000 in November and agreed to fix the wells by March.
"Instead, it chose to ignore its responsibility to safeguard the citizens of this community and to protect the natural resources there," Hanger said.
DEP says its inspectors witnessed gas bubbling up at the base of eight wells in March, suggesting improperly cemented casing. Cement is used to seal off aquifers from contamination.
Despite agreeing to plug and abandon the three gas wells, Cabot maintains those wells are not at fault - it says the methane comes from shallow shale formations and is seeping into groundwater through natural fractures. Pre-drilling tests on more recent wells show preexisting methane concentrations in groundwater in that area, Cabot says.
"We're agreeing to plug the wells in order to comply with the order," said Kenneth S. Komoroski, a Cabot spokesman. "We do not believe they are a source of methane migration or contamination."
Dimock residents who have sued Cabot aren't buying the company's explanation, and said they were grateful the DEP cracked down.
"I'm tired of their lies, I'm sick of it," said Julie Sautner, one of the residents Cabot agreed to provide with a permanent water-treatment system.
Komoroski said Cabot would lose "millions" of dollars invested in developing the wells, and from lost production.
But Dan O. Dinges, the Cabot chief executive who met with Hanger Wednesday, said in a news release that the DEP's order does not affect the number of wells planned for 2010, or its expected production.
The ban on drilling affects only the Dimock area, Komoroski said. Cabot has about 25 permits to drill wells in other parts of Susquehanna County.
Though the DEP frequently targets other gas operators with enforcement actions, Hanger said, "Cabot right now is in a class by itself."
Contact staff writer Andrew Maykuth at 215-854-2947 or email@example.com.