Pennsylvania Attorney General Kathleen Kane believes Exxon Mobil's natural gas division dumped "more than 50,000 gallons of toxic wastewater" at a Marcellus Shale well, so she is charging the company with criminal penalties.
But officials with XTO Energy said the spill was unintentional, calling Kane's efforts an unprecedented "abuse of prosecutorial discretion."
Fort Worth, Texas-based XTO is a subsidiary of Exxon Mobil, the world's largest publicly owned oil and natural gas company. XTO holds a number of leases in eastern Ohio, as many mineral owners - including the Union Local Board of Education and the Martins Ferry Board of Education - agreed to lease land for $4,950 per acre with 19 percent payments on production royalties. The company also controls the leases local residents previously signed with Phillips Exploration. XTO also purchased Monroe County leases from Beck Energy Corp., though a court ruled these agreements invalid earlier this year, pending appeal.
According to Kane, a Pennsylvania grand jury recommended the criminal charges after hearing evidence and testimony. XTO is charged with five counts of unlawful conduct under the Clean Streams Law and three counts of unlawful conduct under the Solid Waste Management Act for the violations that allegedly took place in Lycoming County in 2010.
According to Kane, XTO produced fracking wastewater containing chlorides, barium, strontium and aluminum while working at the Marquardt site. She said the company was storing the wastewater in a 21,000-gallon storage tank for later processing.
Kane said a Pennsylvania Department of Environmental Protection inspector discovered the illegal discharge of fracking waste on Nov. 16, 2010, during an unannounced visit. Apparently, a discharge valve on the tank had been opened, allowing the wastewater to flow out of the storage tank onto the ground.
Kane said the wastewater then flowed into and polluted a creek. Because of the spill, DEP required XTO to remove more than 3,000 tons of contaminated soil from the Marquardt site. She said the driller allegedly failed to place a spill containment system under any of the storage tanks at the Marquardt site; failed secure any of the storage tanks on site; and failed to utilize any security measures to prevent unauthorized individuals from accessing the Marquardt site.
However, XTO officials called Kane's charges "unwarranted and legally baseless because neither XTO nor any of its employees intentionally, recklessly or negligently discharged produced water on the site."
XTO leaders said the spill did not cause significant environmental harm, emphasizing the well site has been fully remediated. They also fear that litigation such as this will discourage oil and gas drillers from trying to recycle frack water because of "significant legal and financial penalties should a small release occur."
According to the grand jury, XTO did not have a permit to discharge wastewater at the Marquardt site and failed to report any wastewater spills to DEP as required by law, Kane said.
During the Thursday West Virginia Oil and Natural Gas Association conference at Oglebay Park, Executive Director Corky Demarco said the action shows that Pennsylvania may not be a friend to drillers.
"This shows an absolute disdain for the industry," he said.