Cabot Oil and Gas Faces Lawsuit in Marcellus Shale Drilling

Of all the towns that have been subjected to drilling for natural gas in Pennsylvania since the opening up of the Marcellus Shale, none have suffered more than Dimock. In just over a year several drinking water wells have been contaminated (one of which exploded on New Years Day, ripping through an 8 foot slab of concrete), numerous spills have dumped highly toxic wastewater, diesel fuel, and fracking fluid into local streams and rivers, and residents have been exposed to dangerously high levels of methane gas and heavy metals. The series of infractions on the part of Cabot Oil and Gas, a Houston based energy company that has large holdings in Dimock, resulted in a $120,000 fine from Pennsylvania's Department of Environmental Protection (DEP) earlier this month. But the cost to residents has been far greater.

On Friday of last week 15 families in Dimock announced that they were suing Cabot for poisoning their water and the likelihood that exposure to toxic chemicals has led to personal injury, including neurological and gastro-intestinal complications. Among the plaintiffs is a Cabot employee and Dimock resident who has knowledge of company practices and violations that have not yet been reported. According to Leslie Lewis, an attorney with one of the firms representing the families, the charges against Cabot are far reaching and reveal a profound degree of negligence and fraudulent conduct. "To me they just seem like a rogue operation," she says. "Anything goes."

Things were supposed to go differently in Dimock. Residents were promised handsome royalties and assured that their property and surrounding farmland-their greatest asset-would not be harmed. Today, if they wanted to leave, chances are they wouldn't be able to sell their homes. "We've all had property damage," said Pat Farnelli, one of the plaintiffs in the case. "We've all had major downward shifts in the quality of our lives. Probably most of us are starting to feel some health effects. You've got to worry about your kids, your grandkids that live here."

Farnelli, whose home is surrounded by gas wells, says that her children started to develop stomach problems late last summer. They would be fine at school but when they returned home at the end of the day and drank the water, the symptoms would reappear. Farnelli thought it was some kind of stomach virus and didn't really suspect gas drilling until her neighbors told her that their water was contaminated. One day her neighbor showed her a glass of water that she says looked a bit cloudy and smelled like formaldehyde or some kind of chemical solvent. "It didn't smell like water," she told me.

In some cases it didn't look like water either. Farnelli says that some residents had tap water that looked like unpasteurized apple cider with a kind of sludgy sediment on the bottom. It was a brownish orange color and had greasy bubbles on top. In 2008 Cabot drilled twenty wells in Dimock and has rapidly increased production since. They hope to drill sixty wells by the end of this year and between fifty and seventy in 2010.

There are many ways to contaminate drinking water wells. According to a Consent Order issued by the DEP in early November, Cabot failed to properly cement well casings in several instances, which can allow methane and other toxic chemicals to leak or migrate into underground aquifers and nearby drinking water wells. When that gas gets trapped in the headspaces of wells, as it did in the case of Norma Fiornetino's drinking water well on New Years Day, it can explode. Today many residents live in fear that the same might happen to them and that their land and water has been ruined.

But they're also in a bind. With their homes devalued and royalty payments only trickling in, all they have left are the mineral rights underneath their property. The lawsuit is intended to make up for the damages to property, health, and quality of life but it may be too late to restore the land and water to its previous condition.

Not surprisingly, the company has continued to deny that it is responsible for the undoing of Dimock. In a prepared statement, Cabot CEO Dan O. Dinges said, "we see no merit in these claims and are disappointed that these citizens felt it necessary to proceed in this fashion."

However, it has become increasingly difficult for the company to brush away the complaints of residents in the face of overwhelming evidence. And the whistleblower in the case will certainly test the company's ability to defend its practices. "It's horrifying to hear him speak," said Lewis, referring to Nolan Scott Ely, the Cabot employee who has joined the lawsuit. "It'll all come out."

"We believe we're going to find some very unpleasant things as a consequence of this suit that have yet to appear in the paper," says Michael Lebron, a spokesperson for the litigants.

Farnelli says that numerous spills and infractions have gone unreported. Particularly alarming is the dumping of wastewater on roads and fields in Dimock. Throughout the summer, Farnelli says, Cabot made a point of "watering" the road that she lives on-a dirt road that has washed out several times since drilling began-to control dust even though no one was complaining about the dust. The strange thing was that it rained a lot last summer, and to Farnelli and others Cabot's actions never really made sense. Why water the road just before it was supposed to rain?

Using tank trucks, the company would spray the road from one end to the other. Walking back from her neighbor's one day, Farnelli noticed that the water smelled bad and seemed to have some kind of oil or detergent in it. You could see rainbows in it when the sun hit and there were large bubbles on the surface that just sat there and didn't break. When residents complained, Cabot started using trucks that said "Fresh Water" on them.

"We think it was produced water," Farnelli told me. "We think it was frack water." Hydraulic fracturing is a controversial technique that breaks open the shale by injecting millions of gallons of water, sand, and chemicals also known as fracking fluid deep underground to release the gas. The produced water that comes to the surface often contains naturally occurring radioactive elements and the residual chemicals used in the fracking process. Storing and treating the produced water has emerged as one of the most important issues facing Pennsylvania and New York, where horizontal drilling and hydraulic fracturing are relatively new. According to Farnelli Cabot also sent tank trucks into surrounding fields to empty them of wastewater. Sometimes it would take two days.

"We know that was frack water because there were people who lived around here working for them. And they were some of the ones who had to do it," she says.

Local residents who have worked on clean up crews after Cabot's spills have also been exposed to highly toxic chemicals. According to Lewis, on one occasion, two local workers were sent into a pit as part of a clean up crew with no protective gear. They literally burned their hands from the toxic waste.

In the meantime Cabot continues to expand its drilling operations throughout the country. Although the price of natural gas has fallen dramatically, the company's production for the year is up approximately 10 percent according to a recent statement. In the third quarter of this year they reported a net income of $38.9 million.

Residents of Dimock are still struggling to pay their mortgages.

"One hand giveth not nearly as much as what was promised," says Lebron, "while the other hand took away everything."