Oil and Gas Company to Pay $1.9M Penalty for Federal, State Clean Water Law Violations

According to a news release published Wednesday, the United States Environmental Protection Agency (EPA) and the Pennsylvania Department of Environmental Protection (PADEP) have settled Clean Water Act (CWA) and analogue state law claims lodged against Chesapeake Appalachia LLC (CALLC). The governmental complaint alleged that CALLC, a subsidiary of Oklahoma-based Chesapeake Energy Corporation, one of the country’s biggest oil and gas exploration and production companies, deposited illegal fill material into 76 sites across five counties in the Appalachian Basin.

In 2014, CALLC reportedly informed the EPA, the U.S. Army Corps of Engineers, and the PADEP that, pursuant to an internal audit, it had discovered potentially unauthorized discharges of fill material at multiple sites in Pennsylvania. The agencies subsequently conducted numerous site visits and engaged in “lengthy negotiations” with CALLC. Ultimately, the government plaintiffs determined that CALLC’s violations impacted about 26 acres of wetlands and 2,326 linear feet of streams.

According to the news release, as part of the settlement, CALLC will either seek after-the-fact authorization from the federal and state authorities to leave the fill in place or will restore the impacted wetlands or waterways. In either scenario, “the impacted water resource either will be restored or the environmental harm will be offset through off-site compensatory mitigation,” the announcement said.

The consent decree that the parties reached noted that while CALLC did not qualify for the EPA or PADEP’s penalty relief under their policies incentivizing self-policing, the agencies reportedly considered CALLC’s disclosure and agreement to return to compliance in their assessment of civil penalties. The PADEP is represented by its own counsel and the EPA also by its own counsel and by the U.S. Department of Justice’s Environment and Natural Resources Division. CALLC is represented by Bracewell LLP and Saul Ewing Arnstein & Lehr LLP.