PA DEP Fines Catalyst Energy $185,000 for Water Contamination, Erosion Violations, Spills

MEADVILLE, Pa., Feb. 22, 2012 /PRNewswire-USNewswire/ -- The Department of Environmental Protection today announced it has fined Catalyst Energy Inc. $185,000 for a number of violations at its non-Marcellus oil and gas well operations in Forest, McKean and Warren counties.

In addition to paying a fine and taking corrective actions at their well sites, Catalyst faces restrictions on drilling, hydraulically fracturing or developing new or existing well sites.

"Catalyst has paid the penalty and is working under a negotiated timetable to rectify these violations," DEP Northwest Regional Director Kelly Burch said. "The company must also demonstrate it is in total compliance before drilling or completing more wells."

Catalyst's drilling activities in an area of Hickory Township, Forest County, contaminated 14 water supplies. Samples showed that the water contained iron, manganese and methane at higher levels than existed prior to drilling. In Pennsylvania, unless operators can prove their drilling activities did not cause the contamination, they are presumed liable for water contamination if the affected water supply is within 1,000 feet of the drilled oil or gas well and the pollution occurred within six months of the completion of drilling.

Catalyst installed water treatment systems and conducted cleanouts of some of the wells, restoring the water supplies, and returned other water supplies to pre-drill conditions through other work on the company's wells. Catalyst now has 60 days to submit a remediation plan to address the eight remaining water supplies not yet restored or replaced.

Through the end of 2012, Catalyst must obtain DEP's authorization before it can develop or drill new wells or hydraulically fracture existing wells. DEP will grant the authorization if its inspections verify the company is in compliance with all applicable laws and regulations at the site.

DEP inspections of well sites in Hickory and Kingsley townships, Forest County, found that Catalyst had not installed sufficient controls to prevent sediment runoff. A November 2011 inspection of the Warrant 5211 well site in Hickory Township found sediment being discharged into Lick Run, a nearby waterway.

DEP immediately issued a field order, requiring Catalyst to suspend construction activity at the site. A follow-up inspection performed the next day found the company had not complied with the order. Catalyst has since put in place the needed erosion and sedimentation controls and submitted the necessary changes to its control plans that are filed with DEP.

The penalty also settles violations resulting from spills and leaks of oil and fluids at well sites in Forest, Warren and McKean counties. The company has addressed and resolved these violations.

Catalyst also has two years to plug 13 abandoned wells left behind by an operator it acquired in 2007. To date, the company has plugged 103 wells abandoned by the former operator.

Catalyst's actions in these cases constitute violations of the Clean Streams Law, the Oil and Gas Act and the Solid Waste Management Act.

For more information, call 814-332-6945 or visit www.dep.state.pa.us.

Media contact: Kevin Sunday, 717-787-1323

SOURCE Pennsylvania Department of Environmental Protection