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For Release: Tuesday, January 24, 2012

DEC Seeks Fines of $187,500 from U.S. Energy for Water Quality Violations in Allegany State Park Stream

Inadequate Stormwater Controls Found at Pennsylvania Drilling Sites and Roads

The NYS Department of Environmental Conservation (DEC) filed an administrative complaint seeking an order requiring U.S. Energy Development Corporation to pay $187,500 for water quality violations associated with Pennsylvania drilling activities that affected Yeager Brook in Cattaraugus County, the agency announced today. DEC is also requiring that U.S. Energy install appropriate stormwater and erosion controls to prevent any future water quality impacts in New York state.

"This enforcement action should provide a strong deterrent to other oil and gas well operators in New York and neighboring states whose operations impact New York's natural resources," said DEC Deputy Commissioner and General Counsel Steven Russo. "We will not allow U.S. Energy's actions in Pennsylvania to negatively impact New York's waters. U.S. Energy must ensure that proper stormwater controls are put in place to prevent future violations."

Three separate incidents of water quality violations during recent rainstorms caused turbidity in Yeager Brook from stormwater runoff. DEC and the NYS Office of Parks, Recreation and Historic Preservation (OPRHP) investigated the cause of the turbidity and found that during heavy rain events in September 2011, December 2011 and January 2012 significant amounts of sediment from U.S. Energy's mining roads and well pads in Pennsylvania's Allegheny National Forest washed into nearby waterways, resulting in severe turbidity in the waters of Yeager Brook within Allegany State Park.

The investigation began when OPRHP staff observed cloudy, gray water appearing in Yeager Brook, and found U.S. Energy's upstream mining roads were covered in thick, heavy mud without the appropriate stormwater and erosion controls in place. In each incident, improper or ineffective erosion and sediment controls around a well site or oil and gas road allowed stormwater to run off into Yeager Brook. U.S. Energy's violations resulted in Yeager Brook having two to three times the normal level of turbidity, or amount of suspended solids, in the water.

DEC is seeking $112,500 in fines against U.S. Energy for these violations, which is the maximum amount allowed by law. DEC is also seeking an additional $75,000 in penalties against U.S. Energy for failing to comply with two previous consent orders for similar violations in August 2010 and November 2010.

In the August 2010 violation, stormwater and water that flowed from the site during the drilling of the well mixed with drill cuttings on-site, which ultimately made their way into Yeager Brook. DEC initiated an enforcement action, requiring U.S. Energy to enter into a consent order with a penalty of $10,000, $2,000 of which was suspended provided that the company took the effective action to prevent a recurrence of the incident.

In the November 2010 violation, stormwater runoff carried sediment-laden water from U.S. Energy's oil and gas drilling operations in Pennsylvania into nearby ditches, creeks and streams, and ultimately into Yeager Brook. The violation was resolved by U.S. Energy signing a consent order with a payable penalty of $1,500 and installing erosion and sediment controls for roads, wells and ancillary sites.

In the current enforcement action, DEC found U.S. Energy did not implement sufficient corrective action as required by the consent orders for the 2010 violations. In addition to the $187,500 in new fines sought, the DEC has demanded that U.S. Energy must now pay $2,000 from the Aug. 2010 violation which was initially suspended and $750 in stipulated penalties for a violation of the order based on the November 2010 violations.

DEC actively enforces New York's water quality statutes, regulations, and where applicable, permits, which mandate that sediment discharges into streams cannot cause a substantial, visible contrast to a waterway's natural conditions. Controlling water turbidity is important in safeguarding water quality because sediment can transport pathogens and harmful nutrients, and can suffocate fish and destroy their habitat. Yeager Brook is a designated trout stream, used for fishing and recreation. Additional information about New York's water quality regulations can be found on DEC's website.

To view DEC's complaint against U.S. Energy (PDF file, 4.6 MB), visit: http://www.dec.ny.gov/docs/legal_protection_pdf/usenergy.pdf .

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