2 Drillers Fined for Pennsylvania Gas Well Blowout

Pittsburgh Post-Gazette
14 July 2010

By Tom Barnes, Post-Gazette Harrisburg Bureau

HARRISBURG -- The state is imposing $400,000 in fines against two companies that it blames for a natural gas well "blowout" in rural Clearfield County in June, an accident that spewed 35,000 gallons of chemical-laden "fracking fluid" into the atmosphere for 16 hours.

And if EOG Resources of Canonsburg and C.C. Forbes Co. of Washington, Pa., make the same careless mistakes a second time, state Environmental Secretary John Hanger warned Tuesday, they stand a good chance of losing their lucrative licenses to drill for natural gas in Pennsylvania.

Mr. Hanger handed down the fines to the two firms along with a lengthy order to all natural gas drilling firms doing business in the state. He told them they must ensure their drilling practices are safe for their workers and people living near the wells and for the environment.

He singled out EOG, once called Enron Oil & Gas Co., based in Houston, Texas, for most of blame in the June 3-4 blowout at the Punxsutawney Hunting Club well. "If EOG violates this order, we are headed to terminate their privilege to do business in Pennsylvania," he said.

EOG was fined more than $353,000 and Forbes, which was working for EOG, was fined almost $47,000. The two firms previously had been forced to suspend their operations for 40 days.

"The blowout in Clearfield County was caused by EOG Resources and its failure to have proper [pipeline safety] barriers in place," Mr. Hanger said. "They failed to follow standard industry practices.

"This incident was preventable. It could have been catastrophic," he said."

EOG's general manager in Pittsburgh, Gary Smith, issued a statement Tuesday. "We sincerely regret this well-control issue took place. Since that time, EOG has worked cooperatively with DEP to resolve all issues. We will be implementing the new operational procedures as defined in the letter to all gas well operators."

Mr. Hanger said he was giving EOG a second chance because the jobs of many workers were at stake. He said EOG had been cooperative during the investigation, which included the state hiring a gas industry expert from Texas. The fine against EOG will cover the $50,000 cost of the investigation.

Mr. Hanger said the blowout went on "uncontrolled" for 16 hours, from the evening of June 3 until noon the next day. There should have been at least two pressure barriers or blowout preventers in the underground piping, which would have prevented the contaminated fluid from reaching the surface, but there was only one such barrier and it was damaged, he said. Thousands of gallons of frack fluid are pumped into the underground shale to force out the natural gas and must be disposed of later.

The blowout spewed a combination of natural gas, frack fluid and brine into the air for hours. Mr. Hanger was especially upset that EOG had waited several hours before notifying the state of the blowout. Signs must be posted at all wells with the DEP's 24-hour emergency phone number. It wasn't until nearly 11 p.m. on June 3 that EOG notified Clearfield County 911 of the problem, a state report said.

Mr. Hanger said EOG must ensure that everyone working at its wells is properly certified in well-control training, which he said wasn't the case at the Clearfield County site.

The blowout didn't cause any injuries or permanent environmental damage, but "it could have been a catastrophic incident," Mr. Hanger said. Some contaminants did get into a nearby stream, Little Laurel Run, which flows into the western branch of the Susquehanna River, but the contamination level is gradually going down, he said.

So far, 1,600 wells have been drilled in areas of Pennsylvania with underground Marcellus Shale, and EOG is drilling 139 of them. Thousands more wells have received permits and are expected to be drilled in coming years.

Many drilling companies already have incorporated the new requirements the state issued Tuesday, said Kathryn Klaber, president of the Marcellus Shale Coalition.

"Our industry is committed to continuously enhancing and improving our operations ... in a manner that's safe, efficient and beneficial to all Pennsylvanians," she said.

Bureau Chief Tom Barnes: tbarnes@post-gazette.com or 717-787-4254.