The Pennsylvania Environmental Hearing Board (EHB) has assessed a $1.1 million civil penalty against EQT Corp. for a 2012 impoundment leak in which thousands of gallons of natural gas drilling wastewater were discharged in Tioga County.
The EHB, which hears appeals from actions of the state Department of Environmental Protection (DEP), calculated a fine that was significantly lower than the $4.5 million the agency has been seeking for years. In a 4-1 decision issued late last month, the hearing board said EQT caused "severe harm to the waters of the commonwealth" and "inexplicably dragged its feet" in fixing the impoundment. The leak was discovered in April 2012, and the EHB found that active releases continued for about two months, until mid-June when they were "greatly diminished."
The EHB fined EQT $10,000/day for 47 days and less for 104 days until Sept. 27, 2012, when the company excavated the pit and installed a temporary liner, finding that it violated the state's Clean Streams Law.
"Having constructed an impoundment with no leak detection system whatsoever, EQT needed to be extremely sensitive to any sign of a leak," the hearing board said in its decision. "We view EQT's initial response to the danger signs of such a leak to have been completely unacceptable."
In 2014, DEP fined EQT $1.27 million, including $900,000 for alleged ongoing discharges from the impoundment. EQT later filed a lawsuit with the Commonwealth Court, challenging DEP's interpretation of the Clean Streams Law and asking the court to decide whether fines could include fees based on how long pollution remained in affected waters or areas. In response, the DEP filed a lawsuit seeking $4.5 million for ongoing pollution and said the company was failing to cooperate with its investigation.
The court sided with EQT and found that fines for the state's Clean Streams Law cannot include fees for ongoing discharges, ruling that the fines must depend on the duration of the initial spill. The EHB's penalties did not reflect the court's ruling. The hearing board noted, however, that it took longer than it should have to remediate the leak and said EQT failed to cooperate in the beginning of the investigation.
"Part of a reasonable operator's obligation during the initial stages of a cleanup project is to maintain open communication with the regulatory authorities," EHB said. "EQT at times seemed to exhibit an unhealthy disdain for the department...If the department appeared too alarmist, EQT appeared too cavalier. Department personnel testified that no other operator in the state has snubbed the department in this way under circumstances far less dire."
EQT spokeswoman Linda Robertson said the company is still reviewing the EHB's May 26 decision and said for now it has no comment. DEP, which has appealed the Commonwealth Court's ruling to the Supreme Court, is “pleased” with the hearing board's decision, spokesman Neil Shader said.
The EHB acknowledged that EQT's cooperation increased throughout the investigation and remediation efforts. When the impoundment was drained, hundreds of holes were discovered in the liner, which EQT has said were caused by a contractor. The leak affected a cold water fishery, a stream, an unnamed tributary, vegetation and groundwater. While the cleanup ultimately took years, the hearing board found that by Sept. 27, 2012 contamination reached a very low level.