Modified Consent Order and Agreement Against Cabot - May 2010

http://www.marcellus-shale.us/pdf/Cabot_Consent-Mod_4-15-2010.pdf

COMMONWEALTH OF PENNSYLVANIA

DEPARTMENT OF ENVIRONMENTAL PROTECTION

In the Matter of:

Cabot Oil & Gas Corporation

Dimock and Springville, Townships

Susquehanna County 
/

Clean Streams Law, 
the Oil and Gas Act, 
and the Solid Waste Management Act

[in part]...

On November 4, 2009, the Department and Cabot entered into a Consent Order and Agreement ("2009 Agreement") in settlement of violations regarding: excessive pressure/improper or insufficient cementing (casings) on certain Cabot Wells; pollution of private water supplies within an area defined as follows: the area bounded on the South of 41 degrees 45 minutes latitude; East of -75 degrees 54 minutes 11 seconds longitude; North of 41 degrees 42 minutes 14 seconds latitude; and West of -75 degrees 50 minutes 48 seconds longitude in Dimock and Springville Townships, Susquehanna County, Pennsylvania ("Affected Area"); discharge of natural gas into ground water in the Affected Area; discharge of industrial waste/and or residual waste onto the ground and/or into the waters of the Commonwealth; failure to submit well records; and failure to maintain a Driller's Log....

Cabot did not comply with all of its obligations under the 2009 Agreement....

The Department has determined that, based on the elevated concentration of dissolved methane gas in the Kemble [family's home] Water Supply, the close proximity of the Kemble Water Supply to the Cabot Wells, the close proximity of the Kemble Water Suppy to the Affected Water Supplies as identified in the 2009 Agreement, and other factors, Cabot is also responsible for the polution to the Kemble Water Supply....

As indicated in the 2009 Agreement and this Modification, the Department has identified the following 14 Cabot Wells as having insufficient/improper casing and/or cementing and/or overpressure, and are causing and/or have the potential to cause the unpermitted discharge of natural gas into the groundwater in the Affected Area:

Baker No.1; 

Ely No.4; 

Ely No. 5H; 

Ely No. 7H;

Teel No.5; 

Brooks No. IH; 

Gesford No.2; 

Gesford No.3; 

Gesford No.9; 

Hubbard No. 5H; 

Ratzell No. IH;

Ratzell No. 2H; 

Teel No.7; 

and the R Smith No.4 Wells

(collectively the "Defective Wells)....

In all cases, by November 1, 2010, Cabot shall have completed all of its obligations under the 2009 Agreement and this Modification in accordance with the schedules contained therein and shall have completely eliminated the unpermitted discharge of natural gas into the waters of the Commonwealth from the Defective Wells and/or any other well owned and/or operated by Cabot within the Affected Area....

Upon signing this Modification, Cabot shall pay a civil penalty of $240,000.  This payment is in settlement of Cabot's failure to comply with all of its obligations under the 2009 Agreement as set forth in the Findings, above. The payment shall be made by corporate check or the like made payable to the "Commonwealth of Pennsylvania" and sent to the Department at the address set forth in... the 2009 Agreement....

Beginning May 15, 2010, and continuing on the 15th day of each month thereafter, Cabot shall pay $30,000 and shall pay $30,000 each month thereafter until the Department notifies Cabot in writing, that the Department has detenuined that Cabot has complied with all of its obligations under the 2009 Agreement and this Modification. Cabot shall pay these monthly penalties in addition to the payment of the $240,000 civil penalty....

FOR CABOT OIL & GAS CORPORATION: 

Dan O. Dinges 

Chief Executive Officer

Kenneth S. Komoroski, Esq.

Attorney for Cabot

FOR THE COMMONWEALTH OF PENNSYLVANIA

-DEPARTMENT OF ENVIRONMENTAL PROTECTION:

S. Craig Lobins

Regional Manager

Oil and Gas Management

Northwest Region

Donna L. Duffy

Regional Counsel