EPA Reaches Landmark Settlement with XTO Energy on Hydraulic Fracturing-Related Wastewater Discharges

July 22, 2013

Less than a month after dropping its controversial, multimillion-dollar investigation into claims that hydraulic fracturing had contaminated a drinking water aquifer in Pavillion, Wyoming, EPA has announced a landmark settlement with XTO Energy Inc. over alleged violations of the Clean Water Act (CWA) relating to discharge of produced and flowback water generated during natural gas exploration and production involving hydraulic fracturing.

The federal government lodged the proposed consent decree in U.S. v. XTO Energy Inc., Case 4:13-cv-01954-MWB (M.D. Pa.) on July 18, 2013, and the public now has 30 days to submit comments before the settlement goes to the judge for final approval. If approved, the consent decree will require XTO to perform injunctive relief valued at nearly $20 million and to pay a civil penalty of $100,000.

The case represents the first major CWA enforcement action brought by EPA under its multiyear “Energy Extraction Enforcement Initiative” and may set the benchmark for a suite of best wastewater practices the agency will seek from companies in CWA cases.

The case stems from a spill that occurred at XTO’s Penn Township facility in central Pennsylvania. During an inspection of the facility, a Pennsylvania Department of Environmental Protection (PADEP) inspector observed wastewater spilling from an open valve on a series of connected tanks. At the time of the inspection in November of 2010, the facility stored wastewater from energy extraction activities throughout Pennsylvania.

In consultation with PADEP, EPA conducted an investigation and determined that XTO discharged up to 57,373 gallons of wastewater into the Susquehanna River over a period of roughly 65 days. XTO was alleged to have violated Section 301 of the CWA, 33 U.S.C. § 1311, which prohibits the discharge of pollutants to the waters of the United States, except in compliance with a permit issued under Section 402 of the CWA, 33 U.S.C. § 1342.

As part of the settlement, XTO has agreed to injunctive relief that the federal government claims will reduce discharges of total dissolved solids by 264 million pounds by increasing recycling and proper disposal of wastewater generated by exploration activities across region. XTO will also implement regionwide operational best management practices, including secondary containment for tanks used to store wastewater; improved standard operating procedures to reduce the risk of spills; remote monitoring of tank volumes to prevent overfill or spills; and installation on all tanks of signage that lists safety information and the number to a 24-hour emergency hotline.

Notably, the injunctive relief also includes a prohibition on using pits or open-top tanks to store wastewater, to prevent air emissions. This outright prohibition seems to echo a recent proposed rule that would revise the Clean Air Act New Source Performance Standards (NSPS) to prevent storage of these materials in unsealed tanks. See “Oil and Natural Gas Sector: Reconsideration of Certain Provisions of New Source Performance Standards; Proposed Rule,” 78 Fed. Reg. 22126 (April 13, 2013). EPA expects to take final action on this proposed rule by the end of this month.