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Chief Pays Pennsylvania $180K for Violations

Chief Oil & Gas LLC has paid $180,000 in fines for two violations discovered last year at a well in Somerset County, the Pennsylvania Department of Environmental Protection (DEP) said Tuesday.

DEP spokesman Kevin Sunday told NGI's Shale Daily that Chief had stopped drilling operations at the well site in Jefferson Township on March 26, 2010, and DEP inspectors visited the site less than three months later, on June 10.

"We had noticed that there was evidence of the oil discharged into the soil there," Sunday said Tuesday. "We haven't been able to determine the amount of oil, but clearly there was enough of an amount there to prompt a response. They had failed to notify the department of the discharge, and they weren't permitted to do such a discharge."

The DEP ultimately fined Chief for the spill and for failing to properly maintain a drill pit. "They have since remediated the site, removed the soil and properly maintained the drill pad," Sunday said.

Chief spokeswoman Kristi Gittins told NGI's Shale Daily that the Dallas-based company has made significant changes to its operations over the past year, including installing protective plastic liners at well sites to contain spills and moving to a closed-loop system for drilling fluids (see Shale Daily, Dec. 8, 2010).

"You look at the situation and you make changes," Gittins said Tuesday. "That's what we do because we care about the environment and how we do business."

Chief subsidiary Chief Gathering LLC was fined $34,000 by the DEP and agreed to surrender discharge permits in four Pennsylvania counties after illegally discharging 25,200 gallons of hydrostatic testing water into the Big Run watershed. A subsequent investigation by the DEP found several other violations (see Shale Daily, Jan. 12).

Chief and its partners once held close to 650,000 net acres of leasehold in the Marcellus but has been selling much of it. In May Chief and Tug Hill Inc. sold 228,000 net acres to Chevron Corp. for an undisclosed amount (see Shale Daily, May 5). Chief currently holds a Marcellus Shale acreage position of 125,000 net acres, which includes Pennsylvania, New York and West Virginia.

Sunday said Chief currently has 232 Marcellus Shale gas wells permitted in Pennsylvania.

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