Chesapeake Energy Corp. will pay one of the largest fines ever levied by the federal government for violations of the Clean Water Act.
The U.S. Environmental Protection Agency announced Thursday that a Chesapeake subsidiary will pay a $3.2 million civil penalty for filling in streams or wetlands in West Virginia without a federal permit. Half that fine will go to the West Virginia Department of Environmental Protection, which had accused the company of violating state laws.
Chesapeake Appalachia LLC also will spend $6.5 million to restore 27 sites damaged by its natural gas operations.
Chesapeake paid a $600,000 fine in a related criminal case last year after pleading to three violations of the Clean Water Act at one of the sites subject to Thursday's settlement.
Chesapeake spokesman Gordon Pennoyer called the settlement a key milestone in the company's efforts to resolve federal and state claims related to surface construction activities in West Virginia before November 2010.
“The company is fully committed to regulatory compliance and is working with the Environmental Protection Agency, Army Corps of Engineers and West Virginia Department of Environmental Protection to restore the impacted sites,” he said.
Chesapeake had been accused of filling streams and wetlands in eight West Virginia counties with sand, dirt, rocks and other materials as it built well pads, impoundments and road crossings.
The EPA discovered some of the violations from routine inspections and information provided by the public. Chesapeake voluntarily disclosed potential violations at 19 sites following an internal audit.
Chesapeake has been working to restore those sites in compliance with the EPA's orders since 2010.
The company also will implement a comprehensive plan to comply with state and federal water protection laws as part of the agreement.
“With this agreement, Chesapeake is taking important steps to comply with state and federal laws that are essential to protecting the integrity of the nation's waters, wetlands and streams,” said Robert G. Dreher, acting assistant attorney general of the Justice Department's environment and natural resources division.
“We will continue to ensure that oil and gas development, including development through the use of hydraulic-fracturing techniques, complies with the Clean Water Act and other applicable federal laws.”