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Cabot Fined $120K for Tank Explosion, Spill in Pennsylvania

The Pennsylvania Department of Environmental Protection (DEP) has levied a $120,000 fine against Cabot Oil & Gas Corp. for a storage tank explosion and subsequent production fluid spill in Susquehanna County last January.

The incident occurred on Jan. 11 at Cabot's Reynolds well pad in Jessup Township. According to the DEP, vapors in the headspace of the storage tank ignited, causing the tank to rupture and explode.

"This was a serious incident that injured an employee and resulted in a spill of approximately 2,835 gallons of production fluid from a 21,000-gallon storage tank," DEP Director of District Oil and Gas Operations John Ryder said Tuesday. "Some of this fluid escaped containment and impacted soil off the well pad."

The DEP said its emergency response staff responded immediately to the accident and conducted follow-up inspections and sampling. The agency said samples taken from an interception trench off the well pad "showed high levels of constituents associated with produced water."

Cabot was issued a notice of violation letter on Jan. 17, citing violations of the state's Oil and Gas Act and regulations, the Solid Waste Management Act, and the Clean Streams Law. According to the DEP, the Houston-based company remediated the spill with oversight by the agency's Northeast Regional Environmental Cleanup and Brownfields program.

“Whenever an incident occurs, like the one at the Reynolds location, our first concern is for the safety of our workers and the public,” spokesman George Stark told NGI’s Shale Daily on Wednesday. “Fortunately, the injured contractor returned to work shortly after this incident.

“We undertook a detailed investigation into the incident, working closely with technical experts and regulatory agencies to fully understand the situation...As a result of our review of this incident, we have implemented additional safeguards into our design and construction practices across our operations, and we continue to work toward our goal of zero incidents and maintaining a safe, reliable workplace."

Cabot holds about 200,000 net acres in the dry gas window of the Marcellus Shale, primarily in Susquehanna County.

Last February, the company reduced its capital budget for 2014 by $75 million and decided against adding any additional rigs in the Marcellus, citing an oversupplied market and sagging basis differentials in the Northeast (see Shale DailyFeb. 21). Instead, Cabot elected to focus on increasing production by completing a backlog of wells.

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