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New York Fines Operator for Pennsylvania Drilling

The New York State Department of Environmental Conservation (DEC) has filed an administrative complaint seeking $112,500 in fines -- the maximum amount allowed by law -- against U.S. Energy Development Corp. for water quality violations that allegedly occurred during drilling activities in Pennsylvania and affected Yeager Brook in Cattaraugus County, NY.

DEC said it would also require Getzville, NY-based U.S. Energy to install appropriate stormwater and erosion controls to prevent future water quality impacts in New York, and is seeking an additional $75,000 in penalties against the company for failing to comply with two previous consent orders for similar violations in 2010.

"This enforcement action should provide a strong deterrent to other oil and gas well operators in New York and neighboring states whose operations impact New York's natural resources," said DEC Deputy Commissioner Steven Russo. "We will not allow U.S. Energy's actions in Pennsylvania to negatively impact New York's waters."

According to DEC's complaint, during heavy rains in September, December and again this month "significant amounts of sediment from U.S. Energy's mining roads and well pads in Pennsylvania's Allegheny National Forest washed into nearby waterways, resulting in severe turbidity in the waters of Yeager Brook within Allegany State Park."

An investigation by the New York State Office of Parks, Recreation and Historic Preservation "found U.S. Energy's upstream mining roads were covered in thick, heavy mud without the appropriate stormwater and erosion controls in place. In each incident, improper or ineffective erosion and sediment controls around a well site or oil and gas road allowed stormwater to run off into Yeager Brook," resulting in the stream having two to three times the normal level of turbidity, DEC said.

But the wells "are in Pennsylvania and the company's operations are regulated there by the [Pennsylvania] Department of Environmental Protection (DEP)," according to U.S. Energy spokesman William Albert. "U.S. Energy is not aware of any issues at the wells in question."

DEC announced the administrative complaint before U.S. Energy had a chance to respond, Albert said.

"We were told that DEC alerted Pennsylvania's DEP of its concerns. DEP asked DEC for a meeting to discuss DEC's concerns for validation, but DEC never responded back to DEP," he said. "U.S. Energy intends to vigorously defend itself."

While the U.S. Energy wells are conventional, DEC's complaint could have repercussions for Marcellus Shale drillers operating in Pennsylvania. New York has been hesitant to develop its shale resources since then-Gov. David Paterson in 2008 ordered the DEC to complete a supplemental general environmental impact statement on hydraulic fracturing (fracking). That order effectively placed a moratorium on drilling horizontal wells in the New York portion of the Marcellus Shale.

Key supporters of shale development in New York say the more liberal regulation of high-volume fracking proposed by DEC is too restrictive and would drive operators to other states (see Shale Daily, Jan. 17).

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