The biggest natural gas company in the US would be XTO Energy, a subsidiary of ExxonMobil, so when you’re looking at the $2.3 million fine for environmental damage related to natural gas fracking announced just yesterday by the US Environmental Protection Agency, you’re looking at a very small drop in a very large bucket. However, when you take a closer look at the settlement, you can also see that EPA has been slowly but steadily chipping away at the myth of cheap, “clean” natural gas.
Let’s call this the Al Capone strategy…
When Is A Fracking Fine Not A Fracking Fine
Before we get into the gist of the case, let’s make it clear that EPA did not bring it in relation to any of the most-discussed issues involved in the gas and oil drilling method known as hydraulic fracturing, or fracking for short.
Those issues include contamination of drinking water wells and other groundwater resources during and after drilling, contamination of surface water by storage or disposal of fracking wastewater, earthquake hazards typically caused by disposal of fracking wastewater, and “fugitive” emissions from drilling sites and elsewhere along the supply chain.
For those of you new to the topic, EPA has been carefully pussyfooting around the fracking issue for years because its hands are tied by an enormous pollution loophole engineered during the Bush Administration by then-Vice President Dick Cheney, who left his post as CEO of the drilling industry services company Halliburton to run for office in 2000.
That’s where the Al Capone strategy comes in. Instead of making straight for the drilling operation itself, EPA went after XTO/ExxonMobil for ordinary construction-related damage, namely this:
…the company impacted streams and discharged sand, dirt, rocks and other fill material into streams and wetlands without a federal permit in order to construct well pads, road crossings, freshwater pits, and other facilities related to natural gas extraction.
If that rings a bell, you may recall that EPA brought an action against another major fracking company, Chesapeake, on identical grounds last year.
That case resulted in a $6.5 million settlement to restore 27 sites and a civil penalty of $3.2 million, which according to EPA was “one of the largest ever levied by the federal government for violations of the Clean Water Act (CWA), under the Section 404 program.”
Section 404, btw, is the one that says you need a permit from the US Army Corps of Engineers before you can alter any kind of waterway — wetlands, rivers, streams, you name it.
The XTO/ExxonMobil Fracking Fine
As with the Chesapeake case, the XTO/ExxonMobil case covered drilling operations in West Virginia.
It involved eight sites in Harrison, Marion and Upshur counties, with the impacted areas totaling about 5,300 linear feet of streams and 3.38 acres of wetland. In addition to the $2.3 million fine, XTO agreed to pay $3 million in restoration costs.
At this point you may be thinking wait — what!? More than $5 million for a measly 3.38 acres and like one mile of streams? It seems that XTO/ExxonMobil could have saved some big bucks if they asked the US Army Corps of Engineers (USACE) for a permit.
On the other hand, given the transition of USACE to an environmental stewardship model, it seems that drilling companies are more likely to risk having their application denied nowadays. That doesn’t necessarily meant that the drilling couldn’t take place, but it does mean that the cost of drilling would go up, to absorb any additional construction costs (including construction debris disposal) needed to avoid impacts on wetlands and other waterways.
For that matter, USACE co-discovered the violations during routine inspections with EPA officials, and it has been aggressively supporting EPA and the Department of Justice in pursuit of the case.
XTO has been working with EPA for several years on cleanup and compliance on those sites, and it also reached a settlement with EPA last year on fracking wastewater contamination in the Susquehanna River in Pennsylvania, relating to a discharge from a storage facility.
This case also skirted around issues related directly to fracking and simply addressed the basics of spill-related contamination. Here’s the goods:
…the spill impacted those waters for a period of roughly 65 days. Elevated levels of pollutants indicative of a spill of flowback and produced fluid, such as strontium, chloride, bromide, barium, and total dissolved solids (TDS), were present in both a surface stream (i.e., tributary of the Susquehanna River) and subsurface spring (i.e., hydraulic connection to the tributary).
Yech. Nevertheless, even as the gas bubble has been on the verge of busting over the past couple of years, ExxonMobil has continued to gobble up additional reserves. Let’s see how that works out if and when that fracking loophole finally closes.
And…if you’d like to weigh in on the new case, the consent decree was lodged in the Northern District of West Virginia yesterday, so there’s 29 more days for public comment.
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