Chesapeake Energy fined record penalty for contaminating private water supplies

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HARRISBURG, PA, May 18, 2011 -- The Pennsylvania DEP has fined Chesapeake Energy over $1 million for violations related to natural gas drilling activities. The majority of the fine -- $900K -- is for contaminating private water supplies in Bradford County. DEP's well-plugging fund will get $200,000 of that amount.

"It is important to me and to this administration that natural gas drillers are stewards of the environment, take very seriously their responsibilities to comply with our regulations, and that their actions do not risk public health and safety or the environment," DEP Secretary Mike Krancer said. "The water well contamination fine is the largest single penalty DEP has ever assessed against an oil and gas operator... Our message to drillers and to the public is clear."

Investigations into private water well complaints from residents in a number of Bradford County townships near Chesapeake drilling operations revealed improper well casing and cementing in shallow zones. This enabled natural gas from non-shale shallow gas formations to migrate into groundwater and contaminate 16 drinking water wells.

As part of the Bradford County consent agreement, Chesapeake agrees to take multiple measures to prevent future shallow formation gas migration, including creating a plan to be approved by DEP that outlines corrective actions for the wells in question; remediating the contaminated water supplies; installing necessary equipment; and reporting water supply complaints to DEP.

The well plugging fund supports DEP's Oil and Gas program operations and can be used to mitigate historic and recent gas migration problems in cases where the source of the gas cannot be identified.

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