Chief Oil & Gas LLC has paid a $180,000 civil penalty for failing to report a hydraulic oil spill and a waste pit liner violation at a Marcellus Shale gas well in Jefferson, Somerset County, a year ago.

A surprise state Department of Environmental Protection inspection on June 10, 2010, found evidence that an undetermined amount of hydraulic oil -- used in drilling machinery and not to be confused with hydraulic fracking fluid -- had been discharged onto the ground and that a waste pit was close to overflowing, according to Kevin Sunday, a department spokesman. Drilling companies must report such spills to the DEP because they are classified as residual waste.

Chief had completed drilling and hydraulic fracturing and capped the well in March 2010. Mr. Sunday said the company was charged with violations of the state Oil and Gas Act, the Clean Streams Law and the Solid Waste Management Act.

"The penalty amount took into account a number of factors, including the operator's history, its response and the real and potential impacts to the environment," Mr. Sunday said. He noted, however, that it was the first penalty against Chief for failure to report unauthorized discharge of residual waste.

Jefferson is located five miles west of Somerset, in the headwater drainage area of Laurel Hill Creek, a popular trout fishing stream.

Both the company and DEP say the well pad is on private property and that no surface or groundwater was impacted.

http://www.post-gazette.com/pg/11180/1156930-503.stm