Only 15 out of 256 Conventional Oil & Gas Operators Who Abandoned Wells Were Fined by PA DEP

Small Penalties no Deterrent to Future Abandonments

by David E. Hess | PA Environment Digest Blog | August 30, 2022

Only 15 of the 256 conventional oil and gas operators who received notices of violation for abandoning wells without plugging them over the last six years were assessed monetary penalties by the Department of Environmental Protection, according to DEP’s response to a Right to Know request to the Oil and Gas Management Program for penalty information covering conventional operators from 2016 through 2021.

The 15 conventional operators were assessed penalties for abandoning wells ranging from $500 to $1,000 to much more when penalties for abandonment were included with multiple other violations.

DEP reported the following companies were penalized for failure to plug oil and gas wells after abandonment, several larger penalties included other violations–

— Aiello Bros Oil (McKean) – $32,563

— Allegheny Enterprises (Clarion, Elk) – $1,000

— Charis Energy, Inc. (McKean) – $1,000

— Chestnut Ridge Energy of PA (Jefferson) – $1,000

— D&S Energy Corp – $500

— Enervest OPR, LLC (Mercer, Venango) – $3,500

— John H. Ball & Son (Butler) – $300

— Otter Exploration, Inc. (McKean) – $2,700

— Rockdale Marcellus, LLC – $20,000

— Sally & Thomas Pellegrino – $16,500

— Seagull Dev., Inc. – $1,000

— Seneca Resources Co, LLC (Elk, Forest, Jefferson, McKean) – $560,780 (and many other violations)

— Snyder Bros, Inc. (Jefferson, McKean, Westmoreland) – $46,941

— SWEPI, LP (Venango) – $1,000

— WGM Gas Co., Inc. (Jefferson) – $2,000

DEP estimates the average cost for plugging an oil and gas well is from $10,000 up to $33,000, so paying a penalty of $500 or even a few thousand dollars is no deterrent to future penalties.

Number Of Abandonment NOVs Increasing In 2022

DEP’s Oil and Gas Compliance System reports conventional oil and gas drillers were issued 82 notices of violation and unconventional shale gas drillers 21 NOVs for abandoning oil and gas wells without plugging them for a total of 103 in the second quarter of this year– 20 percent more than in the first quarter.  Read more here.

During the first quarter, conventional oil and gas drillers were issued 77 NOVs and unconventional shale gas drillers 8 NOVs for the same violation.  Read more here.

This continues the pattern of well abandonment that is pervasive in the conventional oil and gas drilling industry.  Read more here.

Total Conventional Operator Penalties

Over the last five years, DEP reported conventional oil and gas operators were issued more than 17,000 notices of violation for dozens of different kinds of environmental and administrative violations.  Read more here.

DEP reported in its Right To Know response just 76 conventional companies were assessed penalties for their violations over the last six years by the agency totalling $2,524,973– between 2016 and 2021.

The violations included–

— Abandoning oil and gas wells without plugging them;

— Drilling wells without a permit;

— Transferring wells to other operators without DEP notice and approval;

— Operating related waste disposal facilities without a permit;

— Discharging wastewater and waste into waters of the Commonwealth;

— Failure to report releases and spills;

— Unlawful onsite wastewater and waste disposal;

— Dumping drilling waste, causing a pollutional discharge;

— Failure to collect and properly manage drilling wastewater;

— Failure to notify DEP of impacts to private water supplies;

— Venting and migration of natural gas, failure to cement and properly construct a well;

— Obstructing or threatening a DEP employee;

— Failure to restore drilling sites at the end of drilling;

— Failure to implement an effective erosion & sedimentation control plan;

— Failure to submit mechanical integrity and production reports; and

— Many more.

Just six companies were responsible for 70 percent of those penalties — $1,782,126 of the $2,524,973 total:

CNX Gas Co., LLC (Cambria, Greene, Indiana, Somerset, Washington) – $464,548
EOG Resources, Inc. -$199,998
Range Resources-Appalachia, LLC (Armstrong, Fayette, Westmoreland) – $339,800
Rice Drilling B, LLC – $102,800
Seneca Resources Co, LLC (Elk, Forest, Jefferson, McKean) – $560,780
XTO Energy, Inc. (Armstrong, Indiana, Westmoreland) – $115,000.
While assessing monetary penalties on conventional oil and gas operators is only one tool in DEP’s compliance toolbox, it is clear from the increasing number of notices of violation being issued by DEP for oil and gas well abandonments, in particular, this tool is not working.

And perhaps one reason it’s not is because only six companies account for 70 percent of the penalties, resulting in less impact on an industry that has made abandoning oil and gas wells with little or no penalty a pervasive part of their business model.

Penalties For Waste Disposal Violations

The Department of Environmental Protection’s Waste Management Program was also asked as part of the Right To Know request for information on monetary penalties for unlawful waste disposal and management practices by conventional oil and gas operators.

This was the more difficult part of the request because conventional oil and gas operators are not identified specifically in DEP’s Waste Management Program, unlike in the Oil and Gas Program.

Only one monetary penalty was reported by DEP– a $3,000 penalty for open burning waste in Westmoreland County unrelated to oil and gas operations– from 2016 through 2021.

The reason looking at Waste Management Program enforcement actions is important is in December 2021, the Program determined the disposal of millions of gallons of conventional oil and gas wastewater by dumping it on dirt roads as a dust suppressant did not meet the requirements of DEP’s Residual Waste regulations.  Read more here.

At the time, a spokesperson for DEP said, “DEP agrees that the submissions are inadequate and continues to review, and will take enforcement actions as needed.”

A total of 29 companies were later identified in a separate review as spreading their wastewater on roads in 2018, 2019 and 2020, according to a review of DEP’s Oil & Gas Waste database by the Better Path Coalition.  Read more here.

In 2021, conventional oil and gas operators reported road dumping over 580,000 gallons of drilling wastewater.  Read more here.

In May, DEP advised 18 municipalities that road dumping of conventional oil and gas drilling wastewater was illegal and considered waste disposal.  Read more here.

In fact, DEP lists 84 townships as “waste facilities” where road dumping has occurred, according to reports filed by conventional oil and gas operators.  Read more here.

It is not known if DEP’s Waste Management Program took any enforcement actions– from issuing notices of violations to monetary penalties– for these violations, even as the practice of road dumping conventional drilling wastewater continues in the field.

Limits On Civil Penalties

The 2012 Oil and Gas Act (Act 13) sets the penalty amounts DEP can impose for violations of the law and regulations — Sections 3255 & 3256.

General violations for conventional oil and gas operators may not exceed $1,000 and the fine jumps to up to $5,000 if the violation is willful. Imprisonment of not more than 90 days for general violations and up to not more than a year for willful violations is also available as a penalty.

Each day a violation continues is a separate offense.

Unconventional shale gas operators are subject to a separate, higher penalty limits.

Compliance Information

Click Here for a summary list of 76 conventional oil and gas companies issued penalties, the counties they operate in, the amount of the penalty and a very short summary of the violations involved.

Click Here for the original DEP conventional oil and gas penalty information spreadsheet.  

If you have the opportunity, be sure to look at the depth and breadth of violations for which these 76 conventional operators are being penalized for.

You can also look up the compliance record of any conventional oil and gas or unconventional shale gas company at DEP’s Oil and Gas Compliance webpage.

Again, the number and kinds of violations companies are tagged for with NOVs gives you a better understanding of why DEP inspections and adequate enforcement staff are so critical.

Conventional Compliance Review

On July 30, Gov. Wolf directed the Department of Environmental Protection to conduct an evaluation of how it regulates conventional oil and gas wells to prevent new abandoned wells, tighten review of permit transfers, review compliance with environmental safeguards and make recommendations for changes and actions, including criminal sanctions.

The evaluation is due to the Governor’s Office by September 1.

The evaluation was outlined by Gov. Wolf in a formal statement published in the July 30 PA Bulletin and comes in the wake of the Governor allowing House Bill 2644 to become law without his signature.  Read more here.

It is critical DEP evaluate whether its compliance tools are actually getting compliance with Pennsylvania’s oil and gas laws and regulations and where changes need to be made.

On allowing new abandoned wells in particular, up to $395 million in funding is at stake over the next 15 years from the new federal Bipartisan Infrastructure Law for plugging abandoned conventional oil and gas wells.  Read more here.

On August 18, Kurt Klapkowski, Acting DEP Deputy Secretary for Oil and Gas Management, told DCED’s  PA Grade Crude [Oil] Development Advisory Council the conventional oil and gas driller compliance review will evaluate at least the last five years of compliance.

When asked whether DEP’s evaluation and accompanying recommendations would be in a public document, Klapkowski said, “… don’t know the answer to that question.  All I can say is what was published in the Pennsylvania Bulletin, the instructions that we were given in terms of preparing a report for the conventional industry’s record of compliance.”

For the sake of the credibility of DEP’s Oil and Gas Management Program, and Pennsylvania’s environment, the document should be public and its methodology and recommendations fully disclosed.

Related Articles:

— Bay Journal: New Abandoned Wells – More Concerns Emerge Over Pennsylvania’s Conventional Oil & Gas Wells – By Ad Crable, Chesapeake Bay Journal  [8.25.22]

— DEP Issues 20% More NOVs To Oil & Gas Well Drillers For Abandoning Wells Without Plugging Them In 2nd Quarter [7.5.22]

— New Abandoned Wells: DEP Records Show Abandoning Oil & Gas Wells Without Plugging Them Is Pervasive In Conventional Drilling Industry; Who Is Protecting Taxpayers?  [2.23.22]

— DEP: Conventional Oil & Gas Driller Compliance Review Will Go Back At Least 5 Years; Whether It Will Be Public Document Not Decided  [8.19.22]

— Penn State Study: Potential Pollution Caused By Road Dumping Conventional Oil & Gas Wastewater Makes It Unsuitable For A Dust Suppressant, Washes Right Off The Road Into The Ditch  [7.26.22]

DEP Lists 84 Townships As ‘Waste Facilities’ Where Conventional Oil & Gas Wastewater Has Been Disposed Of By Road Spreading; Municipalities Need To Do Their Due Diligence [12.27.21]

Millions Of Gallons Of Conventional Oil & Gas Wastewater Spread Illegally On Dirt Roads, Companies Fail To Comply With DEP Waste Regulations  [12.13.21]

— Creating New Brownfields: Oil & Gas Well Drillers Notified DEP They Are Cleaning Up Soil & Water Contaminated With Chemicals Harmful To Human Health, Aquatic Life At 272 Locations In PA  [8.24.22]

DEP Concerned About Impact Of New Law Blocking Conventional Oil & Gas Well Bonding On New Federal Well Plugging Funds, Regulating Waste Injection Wells [7.19.22]

Conventional Oil & Natural Gas Drilling: An Industrial Machine Moving Across The PA Countryside Leaving Behind Big Liabilities & Spreading Pollution Everywhere It Goes  [8.3.22]

[Posted: August 30, 2022]  PA Environment Digest | Source

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