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

DEP Counters Misinformation Campaign about Providing Water to Dimock

Last week some "concerned citizens" took out a full page ad in the Mulligans Shopping Guide (click to page 2/3). "Enough Already" screamed the red letters above a graphic of a waterline stamped with the red circle-and-slash. No waterline to Dimock, these people say. Why should the taxpayers of PA pay so a dozen people, whose wells have been rendered useless from gas drilling, can have safe drinking water? It would be cheaper just to drill another well, right?

And so, these good people have invited one and all to a Public Meeting tomorrow night, October 21, at 7 pm in the Elk Lake High School Auditorium. And they have invited people to sign petitions available at these places of business: The Inn at Montrose, Warner Quarries, Guy Parrish's, Lockharts, Brunges Commercial Supply, Taylor Rentals, PJ's Cafe and the Rock Mountain Sporting Clays. I don't know about you, but I'm thinking that even people who don't have drinking water might have been inclined to drop by the Inn at Montrose for a bit of food and grog.... at least till now.

Not so fast, says the PA Department of Environmental Protection. Yesterday DEP Secretary John Hanger issued an Open Letter to the Citizens of Susquehanna County who are impacted by the gas migration issues. Here is what he wrote:

To Whom It May Concern:
The Department of Environmental Protection (DEP) recently announced a permanent solution to the drinking water problems in Dimock caused by gas migration from Cabot Oil & Gas Corporation wells. DEP was forced to take action since Cabot continues to deny responsibility for the contamination, despite overwhelming evidence of its responsibility. Since that announcement was made, Cabot has launched a public relations campaign and much misinformation has been brought forth concerning who will be party to that solution and who will end up paying for it.

Cabot is responsible for the gas migration that has caused families to be without a permanent water supply for nearly 2 years and the Commonwealth of Pennsylvania will seek court orders to make Cabot pay for all costs. But we cannot wait for Cabot to fix the problems it caused and to do the right thing. In the interim, PENNVEST, an agency that finances water and sewer infrastructure projects, will be asked to provide funds to pay the estimated $11.8 million cost for Pennsylvania American Water Company to construct a new, 5.5-mile water main from its Lake Montrose treatment plant to provide water service to the residents of Dimock. Again, the Commonwealth of Pennsylvania will then aggressively seek to recover the cost of the project from Cabot.

No one in Dimock or Susquehanna County will pay for it and local taxes will not be increased as the result of it. Residents along Route 29 will have the option to tap into the line if they so choose. No one will be forced to hook up to the new public water supply. The new water line will also boost the value of homes and businesses near it.

This action is being taken based on overwhelming evidence that proves the Cabot wells are the source of the contamination. DEP has collected ample evidence tying methane found in private water supplies to Cabot’s wells. We have witnessed and chronicled bubbling gas and high pressure readings from a number of wells that prove poor well construction, and taken readings that show excessive gas levels that could only exist in wells that are leaking. Sophisticated testing has “fingerprinted” gas samples and matched the gas found in five homes to the gas leaking from the nearby Cabot wells. Additionally, the gas wells in many cases are less than a thousand feet from the homes where, by law, it is presumed gas drilling caused any pollution of water wells that may result.

The residents of Dimock have already paid a high price for Cabot’s unwillingness to accept responsibility and provide a satisfactory solution. Cabot will be the one paying the final bill. Perhaps next time Cabot will do the job right the first time and avoid expensive repairs.
Sincerely,
John Hanger, Secretary

read official press release here.