Gas company whistle-blower details spills, errors - Cabot - Dimock PA

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"DIMOCK TWP. - On a bright fall day in 2008, Scott Ely arrived at the natural gas well a few hundred feet from his home to find work strangely stilled.

His fellow employees of Cabot Oil and Gas Corp.'s drilling subsidiary were watching the only thing moving: a huge plume of gas "like Niagara Falls going upwards" buffeting the drilling rig from below, he remembered.

The gas in the air was sickening.
"They told me they hit a methane pocket," he said. "We're waiting for Cabot to tell us what to do, whether we should try to punch through it or plug it."
They punched through it - a pocket of shallow gas about 1,500 feet down that pumped out the equivalent of 900,000 cubic feet of gas per day, according to a report later commissioned by Cabot.

When drilling was finished, muddy puddles on the pad bubbled with the gas seeping through the gravel.
"Right next to the wellhead it looked like 1,000 Alka-Seltzers going off," he said

Mr. Ely, a GasSearch Drilling Services employee from spring 2008 until mid-2010, is one of more than a dozen Dimock residents suing the company because of what happened next: his family, including three small children, began to get cramps, rashes and headaches. Months after Mr. Ely noted something was not right with his water and first warned his employer to test it, a company representative asked his family to evacuate to a Tunkhannock hotel because dangerous levels of methane seeped into the home with every shower or load of laundry.

Now, state officials have found that Cabot met the obligations necessary for the driller to stop delivering replacement bottled and bulk water to 19 homes, including Mr. Ely's, where the methane tainting the water has been linked to Cabot's faulty wells.
Cabot, which says the water is safe to drink and use, plans to stop the deliveries in 10 days.
'We're the sacrifice'

Long silent about reckless practices, unreported spills and buried problems he said he witnessed on Cabot's well sites, Mr. Ely said the prospect of losing fresh water twice to drilling forced him to speak out

"It's terrible that we're the sacrifice," he said. "We're the sludge that comes off and then we're just washed away."

In an interview with The Sunday Times, Mr. Ely outlined allegations he first shared with Cabot officials and state regulators in the month after his attorneys filed a lawsuit against the driller in November 2009.
In the two years since he led the officials on a tour of every failure he witnessed at Cabot's Dimock sites, he said he has received no answers from the company about what they found in the soil and streams.

Cabot officials told the newspaper that a report proving its operations had no negative environmental impact is ready to be released this month, but they would not disclose the findings until the final report is submitted to the Department of Environmental Protection.

According to Mr. Ely:

Cabot tried to hide, minimize or ignore at least five diesel spills or their impacts between 2008 and 2009. After an 800-gallon diesel spill in June 2008, a drilling supervisor instructed him to move a reference point hay bale away from a spot where lab tests showed persistently contaminated soil after treatment.

"I said, 'So you want them to test where there's no hot dirt?' " he recalled. "He said, 'That's the idea.' "

 Company pits leaked or their plastic liners were carelessly torn before their contents were buried on 13 occasions. The earliest, haphazardly constructed pits were used to catch toxic fluids that flowed out of the wells, but the spray frequently missed the pits or blew out of them.

"In the beginning we would dig a hole and then we'd just throw plastic in it," he said. "That was more or less to make the homeowners feel comfortable about us drilling on their property."

 On at least two occasions, Cabot employees scraped contaminated soil, sand or gravel from a drilling pad then pushed it over the pad's bank.

At one site, Mr. Ely watched a bulldozer operator clear a pad covered in a "big, goopy concoction" of sand and spilled gels and acids by pushing the mess over a bank, he said. State files for the second site show that an inspector from the Department of Environmental Protection discovered an unreported pile of diesel-soaked soil dumped at the edge of a farmer's field.

Cabot had well-control or casing problems on three wells other than the Gesford 3 site where Mr. Ely saw the plume of shallow gas. A "wild well" specialist from Texas was called to a site on Mr. Ely's father's property in late 2008 after a failed valve made it impossible to shut off the spewing well, forcing the family to evacuate overnight.

Something loose in the well jammed the flow, and workers resorted to dumping buckets of methanol on dry ice stacked around the wellhead to freeze it.

"That well could have let loose at any moment, at any time," he said. "We didn't know what was stopping it from blowing out of there but we knew the well was full of fluids."

Cabot files report
After Mr. Ely described what he saw to Cabot officials, the company contracted the environmental consulting firm URS Corp. to investigate any environmental impacts from the alleged incidents.
A final report of the investigation, which was initially outlined by URS in March 2010, will be submitted to the Department of Environmental Protection by Nov. 30, Cabot spokesman George Stark said.

"We have worked with the past administration and we're working with this administration to demonstrate soundly that none of the areas laid out in the accusations exceeded the cleanup standards or were outside the norms of protective health and safety," he said.

Mr. Stark said the 20-month investigation involved close consultation with the DEP and required a year of groundwater monitoring at one of the suspect sites, but ultimately revealed that "there really wasn't anything there."

The company will not release any data from the report before it is submitted to the department, he said.

A DEP spokeswoman confirmed that the agency has been in "constant contact" with URS about the investigation and is anticipating "a report to see what steps they have taken as far as all of the violations."

"We expect a report shortly as to how they are complying with the recommendations we gave them," spokeswoman Colleen Connolly said.

Mr. Stark would not address many of Mr. Ely's specific allegations, since they are dealt with in the report, but said Cabot "takes environmental stewardship seriously and thoroughly investigates all environmental claims."

Asked if he disputes that the incidents alleged by Mr. Ely ever happened, Mr. Stark said, "Each of them has been investigated and the resulting analysis shows that either there was something to investigate further or nothing to investigate."

He said he would not dispute that shallow gas escaped from the Gesford 3 site, but he challenged Mr. Ely's "visual opinion" of the event.

"I'm not saying it didn't happen," he said. "But, if it did occur, we're not aware of any problems as a result of it."

Spills documented

Many of the spills described by Mr. Ely were also documented during state inspections of the well sites, often after Cabot reported the incidents to regulators. Some of the incidents described by Mr. Ely have already gone through state-reviewed remediation and been cleared, Mr. Stark said.

According to agency records, the DEP issued violations at Cabot sites for at least 51 separate incidents involving spills, seeps or releases between 2008 and 2010, including after a July 2009 inspection found stained sand on the well site where Mr. Ely said the "goopy" concoction was later pushed off site.

In a document compiled for the federal Environmental Protection Agency, Cabot reported 19 spills and releases of hazardous substances or wastewater at its Susquehanna County well sites and 14 additional spills "where Cabot does not have sufficient information to confirm that a release of a hazardous substance ... occurred" between June 2008 and May 2011.

The company explicitly did not include instances of methane migration into water supplies in its EPA report because "Cabot disputes the validity of these allegations," the company wrote.

Cabot claims elevated levels of methane reach Dimock water supplies through natural pathways. It has produced data showing detectable amounts of methane naturally occur in 80 percent of the water wells it has tested in Susquehanna County in a geological pattern that mirrors the occurrences in Dimock.

Cabot was forced by the DEP to plug three of its gas wells suspected of allowing methane to taint water supplies, including the Gesford 3 and 9, the twin wells where Mr. Ely saw the methane plume and where Cabot lost a drill bit in unconsolidated rock about 800 feet down.

In correspondence with the DEP in September 2010, Cabot called the three wells "safe, properly constructed and valuable" even though the company proposed earlier the same year to drill a relief water well at the Gesford pad "in an attempt to degas the aquifer," according to DEP documents.
"The department has many reservations concerning this course of action," a regional DEP oil and gas manager wrote.
The last three years in Dimock have been remarkably caustic, with the driller at times pitted against state regulators and neighbors who embrace the company at odds with those suing it.
Mr. Ely has stood at the heart of that division.

A Dimock native whose grandparents' name was given to a creek that runs through town, he is building a new house and raising a family on his father's homestead.

With a speciality in spill prevention and response for gas stations and other petroleum services, he joined GasSearch as a heavy equipment operator and later helped set up the subsidiary's drilling rigs.

He found that the companies working on the drilling sites "had no care for what spilled anywhere. It was the most reckless industry I've ever seen in my life," he said. "I stood up because I couldn't see them just wrecking everybody's properties."

The roles he has been given in the last few years have forced him to split his loyalties: a leaseholder with tainted water, an employee of the company blamed for the contamination, a plaintiff in the case against his employer, a neighbor trying to protect his neighbors and, in return, being accused of blowing their best chance at financial comfort.

"I'm not against the oil industry," he said. "I am not against any of my neighbors extracting the gas from the land to achieve wealth, small or large. I am not here to deprive them at all of that."

In fact, he said, "I know they can do this in a safe manner" and in many ways he has seen that Cabot and others have improved: The driller no longer uses pits and now uses liners and other containments on its well pads to protect against spills reaching the ground.

"Things are different because of what happened at the beginning," he said. "Things are different because we spoke out."


He fears that the state will set a low bar for the Marcellus Shale industry if the DEP does not change course and require Cabot to continue water deliveries - something DEP Secretary Michael Krancer says he will not do because Cabot met the legal obligations outlined in an order drafted during the Rendell Administration.

According to the order, Cabot could stop the deliveries after it offered to install methane-removal systems and funded escrow accounts with twice the tax-assessed value of each affected home. The quality of the residents' drinking water was not a factor in that aspect of the agreement.
"How can they retract all that science?" Mr. Ely said of the DEP's record of Cabot's violations. "They can't go through and say that Cabot's findings clear them of all charges."
On a cold morning last week, he pulled the handle on a spout above his water well and let the water run for half an hour.
Clear and effervescent for more than 20 minutes, the spray of water then turned a milky brown. He caught it in a glass.
"All we want is water," he said, standing outside his soaring, half-finished home that is waiting for its brick walls.

"We are pleading for help. We are on our last straw."

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