Chief Gathering LLC, a subsidiary of Chief Oil & Gas, has been fined $34,000 and has agreed to surrender a discharge permit for operations in four counties in Pennsylvania’s Marcellus Shale area after “illegally discharging hydrostatic testing water at a pipeline project” in Lycoming County, PA, the state’s Department of Environmental Protection (DEP) said.

According to the DEP, Chief Gathering discharged 25,200 gallons of hydrostatic testing water to the Big Run watershed at a pipeline project in Penn Township last August. DEP’s Water Management Program conducted an investigation Aug. 12 after Chief Gathering notified the department that a discharge had occurred the previous day. The company had previously notified DEP that no discharge would occur, according to DEP, which said none of the discharged water reached any nearby surface streams.

The DEP investigation “revealed numerous other violations,” according to DEP, including failure to minimize the flow rate from the discharge point and allowing the formation of a 150-foot erosion channel; failure to submit accurate, detailed notice of intent project information; discharging hydrostatic test water with a total chlorine residual greater than 0.05 parts per million; and allowing an unknown industrial waste to comingle in five storage tanks with hydrostatic test water.

“Chief clearly did not comply with the requirements of the DEP discharge permit that was issued to the company in February 2009,” said DEP’s Nels Taber, north-central regional director.

Dallas-based Chief Gathering surrendered the permit Dec. 2, 2010, DEP spokesman Daniel Spadoni told NGI’s Shale Daily. The surrendered permit covered the company’s hydrostatic test water discharges in Lycoming, Bradford, Clearfield and Sullivan counties, Spadoni said.

Chief Oil & Gas was among the first companies to voluntarily disclose the chemicals used in its fracking operations and recently eliminated the storage of discarded drilling fluid in open reserve pits at drilling sites (see Shale Daily, Dec. 8, 2010). The private operator has moved all of its operations to a closed-loop process.