FISCAL YEAR: 2013

Press Release
December 3, 2012
FOR IMMEDIATE RELEASE

CHESAPEAKE APPALACHIA SENTENCED FOR CLEAN WATER ACT VIOLATIONS

U.S. Attorney also announces formation of West Virginia Natural Resource Watch Group

WHEELING, WEST VIRGINIA - Chesapeake Appalachia, LLC (hereinafter Chesapeake) was sentenced in federal court for three violations of the Clean Water Act related to natural gas drilling activity in Northern West Virginia, according to United States Attorney William J. Ihlenfeld, II.

Judge Frederick P. Stamp, Jr. ordered that Chesapeake pay a fine of $600,000 and be placed onto supervised release for a period of two years as a result of its three criminal convictions.

Chesapeake pleaded guilty in October to three counts of “Unauthorized Discharge into a Water of the United States”, admitting that it discharged sixty (60) tons of crushed stone and gravel into Blake Fork, a water of the United States, on at least three different occasions in December of 2008. Chesapeake also admitted that after discharging the stone and gravel that it then spread the material in the stream to create a roadway for the purpose of improving access to a site associated with Marcellus Shale drilling activity in Wetzel County, West Virginia.

The Clean Water Act, also known as the Federal Water Pollution Control Act, was enacted by Congress to restore and maintain the integrity of the Nation’s waters. It prohibits the discharge of any pollutant from a point source into the waters of the United States without a permit. Discharges of dredged or fill material into waters of the United States are prohibited unless authorized by a permit issued by the U.S. Army Corps of Engineers.

“The defendants knowingly and repeatedly obliterated sensitive wetlands,” said David G. McLeod, Jr., Special Agent in Charge of EPA’s criminal enforcement program in West Virginia. "Companies and their managers who try to skirt the law to save money undermine our efforts to protect the public and the environment. Make no mistake, they will be vigorously prosecuted.”

The parties agreed that separate violations committed by Chesapeake and occurring in connection with impoundments constructed in Marshall and Wetzel Counties would be addressed by civil penalties and not via criminal charges. Efforts to resolve the civil claims against Chesapeake are ongoing.

In response to citizen complaints and other information, the EPA has conducted a series of inspections at sites operated by Chesapeake Appalachia, LLC in northern West Virginia. As a result of those inspections, the EPA has issued eleven (11) administrative compliance orders. At this time, Chesapeake has complied with and/or sought and received extensions for all requirements of the orders.

Chesapeake Appalachia, LLC, is a wholly owned subsidiary of Chesapeake Energy Corporation. The case was investigated by the U.S. Environmental Protection Agency, Criminal Investigation Division. It was prosecuted by David Perri, Assistant United States Attorney.

In addition to announcing the sentence imposed in the Chesapeake matter, U.S. Attorney Ihlenfeld also announced the formation of the West Virginia Natural Resource Watch Group to ensure compliance with environmental laws and to promote respect for our state’s natural resources. This new task force will conduct its first meeting on December 13, 2012, and the team will include representatives from federal, state, and local agencies.

“It’s critical that we keep a close eye on the energy extraction that is going on all around us,” said Ihlenfeld. “The economic impact that it’s having on our area is wonderful but we must make sure that our natural resources are not compromised and that future generations have clean water to drink and clean air to breathe.”

The agencies making up the group will work together to promote consistent communication, information sharing and good working relationships among law enforcement and regulatory agencies. It will also identify suspected violations of local, state, and federal environmental laws, coordinate prosecution efforts, and provide training.

The group expects to focus on violations of the Clean Water Act, the Clean Air Act, and the Resource Conservation and Recovery Act (RCRA), as well as illegal disposal of hazardous waste, tampering with drinking water supplies, and other federal criminal violations that have an impact on the environment.

December 3, 2012

STATUTE:

• Clean Water Act (CWA)