Shale Daily / NGI All News Access

Hearing Scheduled for D&L Energy Shutdown Appeal

The Ohio Oil and Gas Commission has scheduled a hearing for D&L Energy Inc.'s motion for stay of the Ohio Department of Natural Resources' (ODNR) decision to shut the company down after oilfield waste was dumped illegally in late January.

D&L filed an appeal with the commission on March 4, arguing that the ODNR's decision to revoke six of the company's permits, deny three permit applications and order a halt to all temporary storage operations near Youngstown was unfair because the person accused of dumping the oilfield waste is not a D&L employee (see Shale Daily, March 7).

Oil and Gas Commission Executive Director Linda Wilhelm Osterman said the hearing would be conducted at 11 a.m. on Friday, April 12. The location of the meeting was not disclosed.

"This hearing shall be conducted as an oral argument, with each party stating its position upon the requested relief," Osterman said. "The commission does not intend to take the testimony of witnesses. However, the commission will require the attendance of a party representative for each party."

Osterman said the commission intends to limit the hearing to under an hour and a half, with both sides given 45 minutes to make their case.

"In the event that factual issues arise, that the commission determines require some development in order to decide the motion for stay, the parties should be prepared to present factual information through their party representatives," Osterman said. "Also, counsel should be prepared to answer questions from the commission members relative to the motion to stay."

The ODNR was given a March 22 deadline to respond to D&L's motion for stay. The company, in turn, has until April 2 to reply to the ODNR's response. Osterman said a merit hearing over the matter was tentatively scheduled for May 22 and 23.

D&L CEO Ben Lupo, Hardrock Excavating LLC, which is owned by Lupo, and Hardrock employee Michael Guesman each face one charge of violating the federal Clean Water Act (CWA). Lupo is accused of ordering Guesman to dump the oilfield waste into a storm drain that empties into an unnamed tributary of the Mahoning River. The illegal discharges allegedly began in November 2012 and occurred several times before investigators caught one in progress on Jan. 31 (see Shale Daily, Feb. 19).

Lupo, 62, has so far entered "not guilty" pleas to the charge. He is scheduled to be arraigned at 9:30 a.m. Friday, March 15, in U.S. District Court for the Northern District of Ohio, with Judge George Limbert presiding. The case is United States of America v. Lupo et al (No. 4:13CR113).

According to the U.S. Attorney's Office for the Northern District of Ohio, the statutory maximum sentencing guidelines for violating the CWA for individuals is three years in prison, one year of supervised release and a fine of $50,000 per day of violation or $250,000, whichever is larger. For corporations, the statutory maximum is five years of probation and a fine of $50,000 per day of violation or $500,000, whichever is larger.

Ohio Attorney General Mike DeWine said the state may also pursue charges against Lupo and the other defendants.

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