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Pennsylvania Issues Violations as Chesapeake Stabilizes Well

Chesapeake Energy Corp. said a Marcellus Shale well that blew out late last Tuesday is "stable," but the company must now manage the public and regulatory fallout of the incident in northeast Pennsylvania.

Following its initial investigation, the Pennsylvania Department of Environmental Protection (DEP) issued a Notice of Violation (NOV) to Chesapeake on Friday and required the company to respond this week.

As of Friday evening the Atgas 2H well in Bradford County had been "stable" for more than 24 hours, no fluids had been released from the wellhead since early Thursday morning and all fluids had been contained at the pad site since early Wednesday afternoon, according to Oklahoma City-based Chesapeake.

"We would consider it to be stable, but that does not mean completely under control," DEP spokeswoman Katy Gresh told NGI's Shale Daily.

Texas well control specialist Boots & Coots was also on the scene over the weekend, helping Chesapeake make a plan "to achieve full wellhead integrity," according to Chesapeake spokesman Brian Grove. But Grove also said that work over the weekend went slower than expected because of bad weather.

Although it blamed the event on an "equipment failure," Chesapeake still doesn't know the exact cause of the blowout that sent what it described as "brine water" spilling over the area late Tuesday night but told DEP that the loss of well control could be traced to "a flange below the frack stack" (see Daily GPI, April 25).

Chesapeake said most of the spilled brine water stayed within on-site containment structures, but recent rain in the area weakened the earthen containment, allowing fluids to leave the site. Those fluids entered a local waterway. Chesapeake and the DEP began collecting soil and water samples soon after the event and, according to the company, "thus far, testing results show minimal localized environmental impact."

After sampling multiple areas, including the mouth of a local creek and private water supplies, the DEP said the only impact discovered so far was dead tadpoles and frogs, but no dead fish, in a local pond. The DEP also plans to test at a creek, located 16 miles from the well pad, that feeds into the Susquehanna River.

While Chesapeake continues to drill in Pennsylvania, the company voluntarily suspended its completion activities in the Marcellus Shale while it investigates, according to both the company and DEP.

The DEP wants that suspension to remain in effect until the incident is completely understood.

"It is our expectation that Chesapeake will continue to be in a stand-down mode on hydraulic fracturing activities until it can diagnose the cause of the equipment failure at the Atgas 2H well, report those findings to the department and provide assurances sufficient to the department inspectors and technical staff that there will be no repeat of the Atgas 2H well site event at any Chesapeake site, and receive the department's concurrence that it is appropriate to resume hydraulic fracturing activities," Jennifer Means, an environmental program manager with the DEP, wrote in an NOV to Chesapeake.

Means also wrote that DEP investigations to date revealed three violations of state regulations, all related to "frack fluid," the mixture of water, sand and chemicals used to hydraulically fracture shale formations. Gresh said that the "brine water" described by Chesapeake is the same as the "frack fluid" described by the DEP.

Chesapeake released "an unknown quantity of frack fluid" from the well site, allowed frack fluid to enter an unnamed tributary of Towanda Creek and also allowed it to hit the ground, according to the NOV. Those violations could yield fines in excess of $100,000.

The DEP required Chesapeake to respond to the NOV within five business days.

The response must include information about the composition of the frack fluids used at the well, the root cause of the blowout, proposed corrective actions and "an explanation of why Chesapeake took 12 hours to address the uncontrolled release of fluids off the well pad" and "to have a well control service company at the site when there are other well control service companies located closer to the Atgas 2H well."

The Atgas 2H well is located in Leroy, a small township in Bradford County, the most productive county in the Marcellus with 65.8 Bcf in the final six months of 2010, the most recent figures available. Chesapeake is the largest leaseholder in the Marcellus, with more than 1.7 million acres.

While the DEP continues its investigations, the public response to the incident also continues.

Following the blowout, Citizens for Pennsylvania's Future called on the DEP to suspend all Chesapeake operations, not just completion events, "until the company can prove it can operate safely."

Mark Smith, chairman of the Bradford County Commission, sent a letter to Pennsylvania Gov. Tom Corbett challenging DEP policy for the Marcellus, including a much-criticized program to get NOVs pre-approved by top department officials, and claiming that his county did not have enough of a voice in statewide policy deliberations, such as the Marcellus Shale Advisory Commission (see Shale Daily, April 14; April 1).

That commission, convened by Corbett in early March to study a wide range of issues, is set to hold its next meeting on Wednesday, and the issue of the Chesapeake well is almost certain to be discussed (see Shale Daily, March 29).

The blowout reverberated outside of Pennsylvania as well.

The office of New York Attorney General Eric Schneiderman used the event to reiterate his plans to sue the federal government if it doesn't review the Delaware River Basin Commission's proposed regulations on shale development (see Shale Daily, April 21). But Sen. Jim Inhofe (R-OK) told Fox News Radio that the incident was an "above-ground surface spill" that "has nothing to do with hydraulic fracturing."

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