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Pennsylvania Fines Range Resources $4.15M for Impoundment Violations

The Pennsylvania Department of Environmental Protection slapped Range Resources Corp. with a $4.15 million fine for a series of violations at six of the company's water impoundments in southwest Pennsylvania, representing the largest financial penalty against any operator in the state's shale drilling era.

Under a consent order announced late Thursday, Range is required to close five impoundments and upgrade two others in order to meet a set of new standards the DEP is developing (see Shale Daily, May 13). One of the Marcellus Shale's earliest entrants, Range pioneered the use of water impoundments in the state, which are considered crucial by the industry in recycling and reusing production wastewater.

The pits, capable of holding millions of gallons of water, have proved contentious in Pennsylvania, where some residents have complained of odors, possible contamination and the amount of time they remain in service. The consent order resolves a number of long-running and highly-publicized conflicts about Range's impoundments that found the company defending them against some in the communities where they are located, or searching for solutions to resolve the complaints lodged against them.

In June, both the company and state regulators were at a loss for what exactly caused brine water to leak at the Jon Day impoundment in Amwell, about 40 miles south of Pittsburgh (see Shale Daily, June 12). Eventually, the DEP ordered Range to remove more than 10,000 tons of soil at that site. A similar issue at the Yeager impoundment, also in Amwell, was at the center of a legal battle in which residents living in the area requested that Range disclose all the additives and fluids used at the site (see Shale Daily, Aug. 15; Oct. 11, 2013).

"Range discovered elevated levels of chlorides, or salt, at some older facilities in Washington County," Range said in a statement after the consent order was announced. "Further investigations found elevated chlorides in some groundwater monitoring systems at the impoundments and in the soil beneath some impoundment liner systems, due to damage to the liner and some minor surface spills."

Both Range and the DEP said monitoring and testing have confirmed there were no impacts to drinking water supplies as a result of the leaks. The company added that it accepts the regulatory penalties and said it was "deeply disappointed" that the violations occurred.

DEP spokesman John Poister said the agency began collecting violations at some of the impoundments beginning in 2009.

"What got our attention was the growing number of problems, with Jon Day certainly being the headline," he told NGI’s Shale Daily. "Our inspectors were seeing signs of potential contamination. What really brought the issue to a head was on July 11 Range came to us with a readout showing progression over a period of time that chloride was impacting the groundwater at the Worstell impoundment in Cecil Township. When we saw that, it was really one of the things that made us say to Range that we have to sit down and talk about this."

Under the consent order, the company will immediately begin closing three impoundments in the county, while two others must be closed by April. Additionally, the order directs Range to make upgrades at two other impoundments in the county. The liner systems will be completely redesigned to meet the DEP's new standards, and Range will install more sensitive leak-detection systems to allow real-time monitoring.

"This action reaffirms the administration's unwavering commitment to protecting Pennsylvania's soil and water resources," said DEP Secretary Christopher Abruzzo. "This landmark consent order establishes a new, higher benchmark for companies to meet when designing future impoundments, which is an environmental win for Pennsylvania."

Abruzzo added that Range officials deserved credit for crafting a plan to close the impoundments and make upgrades to others. In its statement, the company said certain locations had been underutilized, or out of service, for years and added that a few were already in the process of being reclaimed. 

"We're in the process of reworking the specifications for impoundments," Poister said. "What Range is doing has matched them and went a couple steps further. We're looking at those changes closely to see if we want to include them in future regulations."

While oil- and gas-related waste production is on the rise in the state, going from 14 million barrels in 1H2013 to 15.6 million barrels in the first half of this year, a sizable portion is recycled or reused. Nearly 11 million barrels were recycled in Pennsylvania during the first six months of this year, according to DEP records.

Range relies heavily on Washington County to drive its production as well. The company has 1,254 permits there, where it accounted for 95% of the state's condensate production through the first half of this year, according to state production data.

The order also directs Range to continue soil and groundwater monitoring at each of the closed impoundments, with the understanding that the company will be required to remediate the sites if contamination is found. Range will be required to make quarterly reports to the DEP on the progress of shutting down and reclaiming the impoundment sites.

Until Thursday, Poister said, the largest Pennsylvania fine against an unconventional operator came in May 2011, when DEP fined Chesapeake Energy Corp. more than $1 million for a well pad explosion and leak at a separate site (see Shale Daily, May 18, 2011).

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