DEP Bails on Pipeline; Cabot offers $4.1 Million to Dimock Residents

Dimock water or bottled water? asks Craig Sautner.

Today the PA Department of Environmental Protection announced that Cabot Oil and Gas Co. has agreed to pay $4.1 million to residents of Dimock Township, Susquehanna County, who have had their drinking water supplies contaminated by the drilling.

The settlement negotiated between Cabot and DEP will “enable the affected families to address their individual circumstances as they see fit,” says DEP officials. It also binds Cabot to offer and pay to install whole-house gas mitigation devices in each of the 19 affected homes.

In addition, Cabot will pay DEP $500,000 to offset the state’s expense of investigating the problems in Dimock.

DEP Secretary John Hanger explained that the amount paid to each family will equal two-times the value of their home, with a minimum payment of $50,000. “In addition to the significant monetary component of this settlement, there is a requirement that Cabot continue to work with us to ensure that none of their wells allow gas to migrate,” Hanger noted.

According to a press release from Cabot, upon compliance with the terms of this agreement the company will be allowed to resume well completion operations in the Dimock/Carter Road area. They hope to begin those operations in the first three months of 2011, with new drilling commencing before June.

Dan Dinges, chairman and chief executive officer for Cabot told the press that this settlement “provides the right balance of regulations, financial payments, timely execution and operational safeguards that in the end will protect the resources of Pennsylvania, promote economic development of clean-burning natural gas and continue to create good paying jobs in the natural gas industry.”

Of course, this settlement is only the latest in a series. In November 2009 DEP issued a consent order and agreement requiring Cabot to install whole-house treatment systems in 14 of the Dimock homes. Residents complained that Cabot’s actions did not solve the problem.

Five months later, in April 2010 DEP ordered Cabot to cap three wells and put a halt to drilling.

Five months after that, in September, DEP promised to construct a 5.5-mile water main from the Lake Montrose water treatment plant to Dimock because Cabot wasn’t fulfilling any of the agreements for solving Dimock water woes. The water pipeline would cost the taxpayers close to $12 million – a cost DRP said it would recover from Cabot.

Faced with the prospect of paying higher taxes to provide fresh drinking water to their neighbors, several Montrose businesses fomented an “Enough Already” campaign to rally citizens against the pipeline project (The Inn at Montrose, Warner Quarries, Guy Parrish's, Lockharts, Brunges Commercial Supply, Taylor Rentals, PJ's Cafe and the Rock Mountain Sporting Clays - flip to page 2).

Given the opposition to the planned water line and the uncertain future the project faces, Hanger said the department would abandon its pursuit of the project.

“Our primary goal at the department has always been to ensure that the wells Cabot drilled in Dimock were safe and that they were not contaminating local private water supplies,” said Hanger.

You can read Cabot's Consent Order and Agreement at http://ia700309.us.archive.org/27/items/CabotPADEPagreement/FinalCoa121510.pdf
Tax appraisal for escrow determination is at http://ia700309.us.archive.org/27/items/CabotPADEPagreement/ExDTaxAppraisalEscrowFundValues.pdf