Cabot Oil & Gas Corp. has 60 days to permanently fix water supplies that were affected by the company's gas drilling operations in Dimock Township in Susquehanna County, PA, the state's Department of Environmental Protection (DEP) said Wednesday.

The directive is part of a modified consent order and agreement between the agency and the company that requires Cabot to continue providing temporary water services until the permanent solution can be implemented.

In April DEP suspended its review of Houston-based Cabot's pending drilling applications statewide and barred the producer from drilling new gas wells "for at least one year" in Dimock Township because of contaminated groundwater (see Daily GPI, April 19).

The 60-day timetable to fix water supplies represents an extension that was made necessary when residents in the affected area objected to the company's previous proposal to fix the water contamination issue, DEP said.

"This week's modification to the consent order and agreement gives us more time to find a water supply solution that will address the needs and concerns of residents," said DEP Secretary John Hanger. "Our goal is to find a permanent solution that will be agreeable to all parties."

In April DEP and Cabot entered into a modification of the original consent order and agreement that was executed in November 2009. One of the provisions required whole-house water treatment systems to be installed in 14 homes as a permanent water supply solution. After the document was signed, several residents expressed dissatisfaction with whole-house treatment systems.

Due to the resident reaction, Cabot requested an extension of the consent order and agreement time frame to install a permanent solution. DEP agreed to delay enforcement of that provision to allow for additional discussions with residents. Meanwhile, several residents in the affected area appealed the April modification to the consent order and agreement to the Environmental Hearing Board.

To date under the earlier agreement Cabot has plugged three gas wells, as required, and has made repairs to another well. As a result, DEP said it would resume reviewing Cabot applications only for permits to drill gas wells outside the affected area in Dimock Township.

Except for the permanent water supply and permit application review provisions, all other terms and conditions of the November 2009 consent order and agreement and April modification remain in effect, including the restrictions on drilling and hydraulic fracturing within the affected area.

Separately, it was reported that DEP was investigating the spill of about 100 gallons of diesel fuel Tuesday at a Cabot well site north of Dimock Township. A Cabot spokesman told news media the spill was the result of a mechanical failure and spill containment efforts had worked.

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