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Marcellus Shale fight takes new turn with pipeline mandate

More than the drinking water has become poisonous in Susquehanna County.

More than the drinking water has become poisonous in Susquehanna County.

In a sharp rebuke of one of the state's biggest Marcellus Shale gas drillers, the Pennsylvania Department of Environmental Protection on Thursday ordered an $11.8 million pipeline built to deliver water to 18 rural residences in Dimock Township whose household wells are contaminated by natural gas.

In response, Cabot Oil & Gas Corp., the Texas driller whose wells the state blames for the pollution, denounced the decision as "unfounded, irrational, and capricious" and accused DEP Secretary John Hanger of "obvious political pandering."

The atmosphere in Susquehanna County, which borders New York state north of Scranton, has become so polarized that Cabot crews now travel with uniformed escorts after an enraged Dimock resident drew a handgun on an employee.

"Put the guns away," Hanger said at a news conference Thursday in Dimock, where he announced the pipeline project. "Everybody has to do this through the law.

In an interview, Hanger said the decision to spend $650,000 per home to extend public water service 12 miles to Dimock from the borough of Montrose was the only certain remedy for homeowners with contaminated wells.

"It's remarkable that Cabot has not resolved this problem," Hanger said, describing DEP's nearly two-year effort to fix the most contentious environmental problem related to Marcellus Shale exploration. Hanger said DEP would force Cabot to pay the bill.

Anticipating DEP's announcement, Cabot took out ads in the shale region, addressed to the "Citizens of Pennsylvania," to deny it caused the pollution and announce that it "intends to fight these allegations through its scientific findings."

In a letter to Hanger on Tuesday, Cabot chief executive officer Dan O. Dinges said DEP had ignored evidence that Cabot was not responsible for gas that migrated underground to residential water wells. He said Cabot had only signed previous consent agreements under duress.

Those consent agreements required Cabot to plug three wells believed to be the source of the leaking natural gas, and to provide residents with trucked-in water deliveries. Cabot says it has spent $8 million investigating and trying to fix the problem.

Dinges said his company was willing to drill new state-of-the-art water wells for residents, or to install in-house water-treatment systems that are commonly used in other areas where well water becomes contaminated. But the residents, who have sued Cabot, objected to those solutions because they do not trust any water from their aquifer.

Dinges complained to Hanger that he has "now taken the position that the only acceptable solution to water-supply issues in the area is a wasteful and environmentally disruptive community pipeline."

He accused Hanger of "an obvious and unfounded bias against Cabot and in favor of the private litigation plaintiffs, to the point that your conduct suggests coordination with plaintiffs' counsel."

Dinges also contended that a much-publicized Jan. 1, 2009, explosion of a Dimock resident's water well never happened.

In attachments to Dinges' letter to Hanger, Cabot provided affidavits from emergency responders who said there was no evidence of a blast. The exhibits also said a resident at the house had been working on the water well with a blowtorch several days before the incident, without igniting any gas.

"Both you and your department's staff have known this information for some time, yet you continue to trumpet this fictional 'incident' in an effort to stir up public opposition and distrust toward Cabot and its activities in the region," Dinges said.

Until this week, Cabot's response to Dimock complaints has been mostly legalistic.

Hanger said he was astonished by Cabot's letter.

"I read that letter multiple times, with my jaw literally dropping at every sentence," he said.

DEP has amassed "overwhelming" evidence that Cabot's wells were poorly constructed and caused massive leakages of natural gas, Hanger said.

"It's as though Cabot lives on a planet or a universe in which it gets to choose its facts and its opinions," he said. "Maybe that's the way things look when you sit in Houston, Texas, where Cabot is headquartered."

The sour exchange between chief executive and chief regulator comes as the state legislature is engaged in a fierce debate about establishing a production tax on natural gas.

The Rendell administration has argued that the tax is needed partly to compensate local residents for the disruption and environmental degradation caused by gas drilling.

Hanger said the new water main to serve Dimock would be built by Pennsylvania American Water Co. from its treatment plant in Montrose. The project will be funded by the Pennsylvania Infrastructure Investment Authority, and Hanger said DEP would seek to recover the funds from Cabot.

In response to incidents of escalating anger in Dimock, Hanger urged residents to stay calm.

George Stark, a Cabot spokesman, said the atmosphere in Dimock had become so divided that a resident recently brandished a pistol at a Cabot employee trying to service the water supply. He said Cabot had hired an armed guard to accompany employees on some visits.

"There are some homes with a much higher tension level," he said. "We're not trying to threaten anyone."