Atlas Resources has been fined $97,350 by the Pennsylvania Department of Environmental Protection (DEP) for allowing used hydraulic fracturing fluids to overfill a wastewater pit and contaminate a watershed in Washington County, PA, last year.

According to DEP, an unknown quantity of fluid overflowed the impoundment banks at the Cowden 17 gas well in Hopewell Township, PA, running over the ground and into a tributary of Dunkle Run in December. Atlas corrected the problem but failed to report it to DEP, the agency said.

"It is unacceptable for drilling companies in Pennsylvania to threaten public safety or harm the environment through careless acts, such as this," said DEP Southwest Regional Director George Jugovic Jr. "The Marcellus Shale offers significant economic opportunities for Pennsylvania, but these companies must adopt operating standards that prevent these sorts of accidents and they must make protecting our water resources a top priority."

Pennsylvania regulators have been pressuring drillers in the Marcellus Shale to improve the safety and environmental impact of their operations. Rules restricting wastewater discharges from drilling operations to a more stringent 500 milligrams per liter (mg/l) standard at the pipe, while other new and expanded facilities in general use would be allowed discharges up to a threshold of 2,000 mg/l, were adopted by the state this summer (see Daily GPI, July 2; June 18; May 18).

In addition, gas producers in Pennsylvania are facing the prospect of a severance tax on production later this year (see Daily GPI, June 30) and at least one House member from each political party this year sought a one-year moratorium on new gas drilling and tighter restrictions on horizontal drilling and hydraulic fracturing (see Daily GPI, June 23).

In April DEP suspended its review of Houston-based Cabot Oil & Gas Corp.'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).

One watchdog group has said DEP records indicate that there have been hundreds of violations of state oil and gas laws by companies plying the state's portion of the Marcellus since 2008, including 268 violations involving improper construction of wastewater impoundments (see Daily GPI, Aug. 4).

Atlas Resources is a division of Atlas Energy Inc., a major player in the Marcellus. Last month the Pittsburgh-based producer said record natural gas production of 55 MMcfe/d net in the Marcellus had put it on a path to increase output 21% in 2Q2010 from the first three months of the year (see Daily GPI, July 8). Atlas has forecast total Marcellus output by the end of 2014 to be about 500 MMcfe/d net. In April Atlas and India's Reliance Industries Ltd. became partners in the shale play in a transaction worth an estimated $1.7 billion (see Daily GPI, April 12). The joint venture promptly bought another 42,344 acres in the Pennsylvania portion of the Marcellus (see Daily GPI, April 23).

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