The fouling of 14 residential water wells in the Susquehanna County town of Dimock - the result of poor drilling practices by Oklahoma-based gas exploration Cabot Oil and Gas - has resulted in some bad press, not just nationally, but internationally, state Department of Environmen-tal Protection secretary John Hanger told a Town Hall here Thursday.
"It is unfortunate the word 'Dimock' is known around the world - literally," Hanger said.
Hanger said he recently was asked about the Dimock situation while being interviewed by a Russian television crew, adding that what happened "is a black eye for the (gas) industry, the (DEP) and the state."
The situation, which was discovered in January, 2009, was the result of shoddy well construction that allowed gas to migrate into the wells, Hanger said. On May 13, Hanger fined the company and ordered it to cease all operations in Susquehanna County for one year.
"We need to make sure there are no more Dimocks and no more companies that perform the way Cabot did," Hanger said, adding that most companies working in Pennsylvania operate in a responsible manner.
State Sen. Eugene Yaw, R-Loyalsock Township, said he supported Hanger's handling of the situation.
"Here is a situation where facts warranted strong actions by the DEP, and I support them," said Yaw.
Kathryn Klaber, president of the Marcellus Shale Coalition, a consortium of industry and industry-related companies, called the situation a learning experience that is leading to improvements in drilling regulations, such as more stringent well casing standards.
Hanger said he favors increasing bonds on gas wells so an adequate amount of money is available if a company decides to walk away from a well without decommissioning it. The state requires a bond of $2,500 per well, or $250,000 to cover all wells drilled in the state.
That is not enough to pay for capping an abandoned well, Hanger said.
"Taxpayers are paying for plugging gas wells some companies walked away from decades ago," he said.
Klaber disagreed the bond amount needs to be raised. Companies working in the Marcellus Shale would not risk tarnishing their reputations by abandoning wells, Klaber said.
Hanger responded that there are many examples of companies doing just that.
"I'm disappointed you find this controversial," Hanger told Klaber. "There are plenty of examples where companies have operated this way."
Regarding New York state's moratorium on gas drilling and the possibility Pennsylvania may pursue similar action, Hanger said he is unconcerned with what other states are doing. His job is to ensure that gas development in Pennsylvania is done in a responsible way.
Vincent Matteo, president of the Williamsport-Lycoming Chamber of Commerce, said he supports New York's moratorium because it resulted in gas companies interested in that state locating in Pennsylvania instead.
"I think the greatest thing New York ever did for Pennsylvania is the moratorium," Matteo said.
Yaw said a moratorium would open a Pandora's box of legal challenges.
Attorney Dale A. Tice, an attorney with the Marshall, Parker and Associates law firm, said he represents many rural landowners and farmers regarding gas leases.
"Clients I've work with have been struggling. They are beginning to see the light at the end of the tunnel," Tice said. "They don't want to see that light shut off."
Tice and Paul Kieffer, manager of financial planning for event sponsor M&T Bank, discussed legal and financial implications of gas leases and royalties.
According to Kieffer, he works with many landowners with newfound wealth derived from gas revenue. With that wealth, however, comes challenges, Kieffer said.
Kieffer said landowners should get professional advice before making decisions about what to do with gas revenue.
They need to know the tax implications of gas-related income. They need to know how to safely invest their money and preserve it for themselves and future generations, he said.
Yaw said the Marcellus Shale "across the board has been the savior of the family farm in a lot of places."
Kent Wissinger, M&T Bank assistant vice president of corporate communications, said when bank officials were considering the town meeting in Williamsport, there was only one topic the meeting could possibly focus on - the Marcellus Shale.
"I can't think of an issue more Germain and hot in this area," said Wissinger.
