A subsidiary of Chesapeake Energy, the nation’s second largest natural gas producer, will pay a civil penalty of $3.2 million for environmental damage caused by hydraulic fracturing at natural gas well sites in West Virginia.
Chesapeake Appalachia LLC is also expected to spend about $6.5 million to restore 27 sites damaged by unauthorized discharges of fill material into streams and wetlands.
The fine is one of the biggest ever for violations of Section 404 of the Clean Water Act (CWA), which prohibits the filling or damming of wetlands, rivers, streams, and other waters of the United States without a federal permit, the DOJ said.
Chesapeake agreed to put in place “a comprehensive plan to comply with federal and state water protection laws at the company’s natural gas extraction sites in West Virginia, many of which involve hydraulic fracturing operations,” the Justice Department said.
Robert G. Dreher, from the Justice Department’s Environment and Natural Resources Division, said: “We will continue to ensure that oil and gas development, including development through the use of hydraulic-fracturing techniques, complies with the Clean Water Act and other applicable federal laws.”
The federal government and the West Virginia Department of Environmental Protection alleged that Chesapeake discharged sand, dirt, rocks and other fill material into streams and wetlands without a federal permit in order to construct well pads, impoundments, road crossings and other facilities for natural gas extraction.
The violations occurred at 27 sites located in the West Virginia Counties of Boone, Kanawha, Lewis, Marshall, Mingo, Preston, Upshur and Wetzel, including 16 sites involving hydraulic fracturing operations.
The government said the violations impacted approximately 12,000 linear feet of stream, or approximately 2.2 miles, and more than three acres of wetlands.
For any sites that can’t be restored, the government said, Chesapeake “will perform compensatory mitigation, which will likely involve purchasing credits from a wetland mitigation bank located in a local watershed.”
Oklahoma City-based Chesapeake Energy has operations in most big U.S. shales plays, including Eagle Ford, Utica, Granite Wash, Cleveland, Tonkawa, Mississippi Lime and Niobrara, as well Marcellus, Haynesville/Bossier and Barnett.
Chesapeake voluntarily disclosed potential violations at 19 of the sites following an internal audit, and the other violations were reported by the public or found by government inspectors.
In a related case, in December 2012, Chesapeake pleaded guilty to three violations of the Clean Water Act related to natural gas extraction activity in Wetzel County. It was hit with a $600,000 penalty for discharging crushed stone and gravel into Blake Fork, a local stream, to create a roadway to improve access to a drilling site.
The company has already fully restored the damage done to the site, the Justice Department said.