Oil report

Pennsylvania fines Cabot over drilling spills

PHILADELPHIA, Oct 21 (Reuters) - Pennsylvania has fined Cabot Oil & Gas Corp. COG.N for three spills of a fluid used in natural gas drilling, amid concern about groundwater contamination, state regulators said on Thursday.

Cabot spilled about 8,000 gallons of LGC-35, a lubricant, in the rural community of Dimock, Susquehanna County, on Sept. 16 and 22. Natural gas drillers use the chemical in a technique called hydraulic fracturing to obtain gas trapped in rock formations.

The state’s Department of Environmental Protection fined Cabot $56,650 and ordered the company to stop fracturing until it cleaned the spills and submitted an updated pollution control plan. The ban was lifted on Oct. 16.

Anti-drilling activists criticized the fine as too small.

Some residents of Pennsylvania and other U.S. gas-drilling areas oppose hydraulic fracturing, or “fracking”, claiming chemicals used in the process contaminate ground water, causing sickness and rashes, and forcing users to drink bottled water.

Cabot spokesman Ken Komoroski said the company has paid the fine and met the DEP’s environmental requirements, taking measures to prevent spills including installing high-pressure pipe connectors and storing drilling gel closer to wells.

The industry has declined to specify the chemicals it uses in fracking fluids, saying the information is proprietary. Drillers say the chemicals cannot get into drinking water because they are injected through layers of steel and concrete thousands of feet below the aquifers.

“We expect that Cabot will do a better job in the future of overseeing its contractors now that the company has a improved preparedness, prevention and contingency plan in place,” said Robert Yowell, the Pennsylvania DEP’s north central regional director.

Barbara Arrindell of the Pennsylvania anti-drilling group Damascus Citizens for Sustainability blasted the fine as “a joke” too small to remedy pollution.

“This environment is violated,” she said. “It’s not going to get cleaned up because Cabot has to pay the DEP a few thousand dollars.”

Arrindell accused the DEP of being in “partnership” with the gas industry, which is developing the massive Marcellus Shale gas formation beneath Pennsylvania and parts of surrounding states.

“There’s a lack of regulation and a lack of enforcement,” she said.

A boom in shale natural gas drilling has raised hopes the United States will be able to rely on the cleaner-burning fuel to meet future energy needs, but concerns about water quality could slow drilling operations.

Komoroski said Cabot is drilling 40 to 60 new Marcellus wells in Susquehanna County this year and plans another 60 in 2010, adding to the 20 it had at the start of 2009.

The U.S. Environmental Protection Agency conducted its first tests this year in response to concern about water quality and gas drilling, and found contamination in some private water wells in a Wyoming gas field. It did not identify the source of the contamination, and is continuing to test.

The U.S. Congress is considering a bill that would require energy companies to disclose their fracking chemicals. (Reporting by Jon Hurdle; Editing by David Gregorio)