Pennsylvania Department of Environmental Protection (DEP) chief John Hanger on Thursday unveiled a plan to install a nearly $12 million public water line to replace contaminated water wells in Dimock Parish, despite a claim by Cabot Oil & Gas Corp. -- which may have to pay for the project -- that the water line is "wasteful" and "unnecessary."

The affected residents of Dimock Township in Susquehanna County are to receive public water service from Pennsylvania American Water Co. (PAWC), which would replace the private wells that Hanger said were "contaminated with methane gas migrating from poorly constructed natural gas wells." He made the announcement at a press conference.

The state and the water company are proceeding with construction and "will seek to recover the cost of the project from Cabot Oil & Gas Corp., whose wells are responsible for the gas migration problems in the township," said the DEP Secretary.

"The residents of Dimock have waited long enough for Cabot to provide a permanent solution to the gas migration issues that have plagued this community's water supplies," Hanger said. The agreement with PAWC would extend public water lines from Montrose, PA, to the Dimock area to "provide a safe, dependable water supply to residents here."

Gas migration problems in Dimock first became evident, noted Hanger, when a private water well exploded on Jan. 1, 2009 (see Daily GPI, Jan. 26, 2009). A DEP investigation found that methane gas from a shallow formation had been disturbed and migrated "through poorly constructed wells Cabot built while drilling for the much deeper Marcellus Shale formation," he noted.

In April DEP ordered Cabot to plug three operating gas wells in the township and take remedial action on a fourth well to address gas migration that had contaminated 14 water supplies (see Daily GPI, April 19). In addition, DEP fined Cabot $240,000 and ordered the company to install permanent treatment systems in 14 homes within 30 days. Cabot also was prohibited from drilling any new wells in a nine-square-mile area around Dimock until April 2011.

Earlier this month DEP investigators determined that three additional water supplies serving four residences had been contaminated by migrating gas caused by Cabot's drilling activities, which the Houston-based producer disputed (see Daily GPI, Sept. 22).

"The problems in Dimock were caused by Cabot's failure to construct their natural gas wells properly, and we are holding them responsible for the damage caused by these wells," Hanger said. "We intend to proceed with construction of a public water system for the Dimock area and will seek recovery of costs from Cabot Oil & Gas."

PAWC plans to construct a 5.5-mile water main from the company's Lake Montrose water treatment plant south to Dimock and install about seven miles of distribution line to provide water service to at least 18 homes. The solution to the drinking water needs in Dimock "will also make this basic resource accessible to other residents along Route 29 not currently served by public water," DEP stated. PAWC also plans to install pressure regulating stations and a new treatment facility to serve the community.

The waterline extension and associated facilities is estimated to cost $11.8 million.

"Pennsylvania American has proven itself to be a reliable source of quality drinking water to more than two million Pennsylvanians," said Hanger. "I am disappointed that Cabot has chosen not to embrace this opportunity to put these events behind us and allow everyone involved in this difficult matter to move forward."

Cabot officials, who did not attend the press conference, earlier this week pushed back against DEP's assertions that the company caused the water contamination.

In a letter sent Tuesday to Hanger, Cabot CEO Dan O. Dinges accused DEP of using threats to force the company to correct the water well contamination problem. The letter also referred to a meeting apparently on Monday between the Cabot CEO and DEP representatives where state officials "agreed that more time is necessary" to determine "whether Cabot's operations are impacting water supplies."

Leslie Lewis, who is representing some of the Dimock families who are suing Cabot over the contamination, criticized the producer in a statement on Wednesday.

"Cabot's last-ditch efforts to derail the secretary and governor's directive to install a centrally sourced water supply to affected residents of Dimock...are both audacious and pathetic," Lewis said.

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