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December 20, 2013

Subsidiary agrees to settle case

CHARLESTON, W.Va. — A Chesapeake Energy subsidiary has agreed to nearly $10 million in fines and restoration work to settle federal allegations over unauthorized discharges of fill material at more than two dozen natural gas extraction sites in West Virginia, federal officials announced Thursday.

Under the settlement announced by the U.S. Environmental Protection Agency and Department of Justice, Oklahoma City-based Chesapeake’s subsidiary, Chesapeake Appalachia LLC, will pay a $3.2 million fine and spend $6.7 million on restoration work.

A Justice Department statement said the fine is one of the largest involving Clean Water Act provisions pertaining to the burial of streams and wetlands without permits.

The statement said the settlement resolves violations at sites in Boone, Kanawha, Lewis, Marshall, Mingo, Preston, Upshur and Wetzel counties.

“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 for environment and natural resources.

The allegations involved about 2.2 miles of streams and 3 acres of wetlands.

The case began through routine inspections and public tips and the company also disclosed potential violations following an internal audit.

The settlement requires the company to fully restore the wetlands and streams where feasible. It also must monitor the restored sites for up to 10 years to ensure the restoration’s success and implement a program for future compliance of federal and state law.

The agreement is subject to a 30-day public comment period and court approval.

Chesapeake Appalachia has oil and natural gas properties in West Virginia, Pennsylvania, and Ohio.

In December 2012, Chesapeake Appalachia was fined $600,000 for destroying a Wetzel County waterfall while constructing a well pad. The company pleaded guilty to three violations of the federal Clean Water Act.

It was accused of illegally discharging 60 tons of crushed stone and gravel into Blake Fork at least three times in December 2008, then spreading that material to build a road.

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