A subsidiary of Chesapeake Energy Corp. has agreed to pay a $1.9 million fine and address environmental impacts in Pennsylvania as punishment for failing to identify and protect wetlands at 76 oil and gas well sites.
The consent decree with Chesapeake Appalachia LLC was executed by the Pennsylvania Department of Environmental Protection (DEP), the U.S. Environmental Protection Agency and the U.S. Department of Justice (DOJ).
“In 2014, shortly after a management shake-up within the corporation and a significant wetland-related prosecution in West Virginia, Chesapeake voluntarily self-disclosed to DEP and EPA a number of probable violations,” DEP said Wednesday. “The Chesapeake disclosure noted that an internal environmental audit process revealed the company’s systemic failure to identify wetland resources in applications to DEP to construct oil and gas facilities in Pennsylvania between 2005 and 2014.”
The period in question aligns with the tenure of Chesapeake’s late co-founder and longtime CEO Aubrey McClendon, who died in a 2016 car wreck one day after he was indicted by DOJ on charges of bid rigging for oil and gas leases in Oklahoma.
Under the consent decree, Chesapeake is required to address the impacts to 25.778 acres of wetlands and 2,326 linear feet of streams through restoration where permits would not have been authorized, DEP said.
The Oklahoma City-based independent also must implement a compliance program to ensure its facilities are up to federal and state code.
If Chesapeake fails to meet its obligations in the agreement it will be subject to penalties “greater than those typically found in state only settlement documents,” DEP said.
“This settlement resolves many violations over several years and leads to a net increase of wetlands and restored streams,” said DEP Secretary Patrick McDonnell. He noted that the settlement “is a significant benefit to Pennsylvania’s public natural resources through restoration and replacement and, in particular, will result in a net increase of wetlands in the Chesapeake Bay watershed.”
The cnsent decree enforcement effort, he said, “is an example of the positive collaboration with our federal partners that leads to positive results, and we applaud the current Chesapeake team for coming forward and voluntarily disclosing these violations and committing to a detailed and specific process for returning their sites to compliance.”
The consent decree was lodged Wednesday in federal court in Williamsport, PA, and is subject to a 30-day public comment period and final court approval. The news follows Chesapeake’s exit from bankruptcy in February.
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