Friday, November 22, 2013

Cabot buys second polluted residential property in Dimock 12-acre parcel on Carter Road flanked by faulty gas wells

The former Mike Ely propety, now owned by Cabot
Cabot Oil & Gas has closed a deal for a second residential property affected by chronic methane pollution in the heart of its prolific gas operations in Susquehanna County, Pennsylvania.

The Texas-based company paid Michael Ely $140,000 for the 12-acre property that includes a doublewide modular home, according to records filed in Susquehanna County Courthouse Wednesday.  The property – now vacant -- borders the intersection of the south end of Carter Road with State Route 3023 in Dimock Township.

The state Department of Environmental Protection has identified at least two malfunctioning gas wells operated by Cabot bordering the property, including the Gesford 3 well, several hundred yards to the north off Carter Road, and the Costello 1 well, just to the south off Route 3023.

Cabot demolished the former Sautner in September 
The agency has forbidden Cabot to drill more wells in a nine-square mile area around the intersection until the company resolves problems with these and other shale gas wells that – according to the DEP inspectors – are causing methane pollution.

The former Ely property sits less than a mile south from another polluted residential property on Carter Road that Cabot bought for $140,000 from Craig and Julie Sautner last year. Cabot demolished the three-bedroom ranch in September and sold the empty lot to a neighbor for $4,000. The new deed includes a clause – called a land covenant -- that forbids residential dwellings on the property.

Cabot bought both the Sautner and Ely properties through a subsidiary called Susquehanna Real Estate 1 Corp.

Ely ancestral home across from Cabot's newly acquired lot
The former property of Mike Ely is part of a larger swath owned by generations of the Ely family since 1858. Bill Ely, Mike’s father, lives in the family’s large ancestral colonial home near the banks of Burdick Creek, which runs under a bridge connecting Carter Road with Route 3023. Bill Ely and his wife, Sheila, are among families in the area that depend on bottled water. Bill told me he has no intention of selling his 19th century house to the company, even though his water is not drinkable.

“I’m not leaving” Ely said Thursday. “My family’s been in this home for generations.”

Susquehanna County and operations centered in Dimock have been the source of both boon and bane for Cabot, which in 2013 was the second largest natural gas producer in Pennsylvania behind Chesapeake Energy. In the first half of the year, Cabot had 15 of the top producing wells in the state concentrated in its leasehold in Susquehanna County – an area experts call a “sweet spot” for Marcellus Shale production. But production has been beset by problems. Both Mike and Bill Ely were among more than 30 families in the area that settled a law suit with Cabot for damages related to water pollution for an undisclosed amount in 2012. The controversy continues, as Cabot, under the watch of the DEP, attempts to fix problems that have prevented it from drilling any new wells in a 9-square-mile region around the Carter Road area. Some of the gas wells have been plugged or shut down, so residents living over them have seen royalty payments dwindle.

Hazards found in some residential water wells include methane, arsenic, bacteria, and various heavy metals that occur naturally. Methane can make water flammable and pose risks of explosion in wellheads and enclosed spaces. Arsenic, heavy metals, and bacteria can cause illness. Drilling can open pathways that allow contaminants to move through the ground, but the extent to which this happens is open to scientific and legal interpretation. Cabot continues to challenge the DEP findings publically with claims the contaminates are a result of naturally-occurring phenomenon.

The DEP began investigating problems in the region after a residential water well on the north end of Carter Road exploded at the home of Norma Fiorentino on January 1, 2009, shortly after Cabot began ramping up operations to produce gas from the Marcellus Shale with the controversial practice of horizontal drilling and high volume hydraulic fracturing. Since then, the area has been the focus of a national controversy over the impacts of shale gas development on residential communities.

During my visit to the area this week, I noticed that a service rig at the Costello gas well had been removed. George Stark, a spokesman for Cabot, was not immediately available for comment about recent developments. Stark told me in September that the rig, which has been at the site for months, allowed crews to “monitor” the casing of the gas well, which appeared sound.

DEP officials explained it differently. They had not pinpointed a source for the problems affecting three homes near the well, including the Ely properties. But they had determined that the suspect Costello gas well was "unviable" and would have to be plugged. In an email response to my query earlier this fall, DEP spokeswoman Colleen Connolly reported that Cabot was ”continuing remedial efforts” at the Costello gas well and “evaluating the effectiveness” of the work.  Methane levels were fluctuating, she said. Additionally, tests had shown levels of iron and manganese that were elevated but within standards in some water samples. Elevated levels of these elements are “not uncommon during gas migration,” she reported.

Update 5:25 p.m. EST. In response to my request for an update this week, Connolly said in an email this afternoon that “remediation work” is continuing on the Costello 1 well.  But the department’s characterization of the status of the well remains vague. In Connolly’s words, the well is "essentially unviable," but DEP officials are "not aware of the gas well having been officially plugged.”


  1. well,well,well....thanks for the reporting

  2. Excellent and sad. Thanks Tom.

    Prediction: Dimock, Franklin Forks, The Woodlands (Evans City), Swihart Road (Cecil Township), Several homes in Hickory Twp, Banetown Road, Washington PA...

    All of these places will soon become deserted, like other contaminated places around the world. Love Canal- deserted. Pripyat, Ukrane: Deserted. Centralia, PA: still burning/abandoned. Hinkley California: 2 square miles-- deserted. Northwoods Subdivision, Mayflower Arkansas, Houses being demolished....

    Once a place becomes contaminated, there's no fixing it for 500 years. Do we need to allow these dirty industries into our area? Isn't there another way?

  3. Cabot bought the Sautner property for $167,500 using their front company , Susquehanna Real Estate 1 Corp.; They also bought another property on Elk Lake Rd. for about 37,000. Don't know the history of that one yet. This is the third property bought by Cabot in Gasland . Why would they buy this one? because it's contaminated and between other contaminated properties ? and between Scott Ely and Ray Kemble who are still talking and battling Cabot in court....

  4. this is why they are contaminating the properties in the 1st place so they can steal the

  5. Wake up America to this catastrophe

  6. Scott Ely and the 7,000 sq ft mansion he's building on his property are noticeably absent from this story. Why would someone start to build their dream home on a property contaminated, unusable water?

    1. Scott had his plan in place B.C. His intent to build his dream home on his dad's mountain was his life's goal. None of us could have foreseen this coming. We bought our property in 2003, lived in an trailer on the property and built our dream home too. Honestly, if we had known we were going to be living in an active gasfield we would not have settled here. We had limited resources and were too far into it to leave...I put my retirement money into the house and my husband worked 24/7 to build it. We had 4 neighbors when we moved into our new home. They are gone and we are here. We will stay as long as we can. I am not inclined to sell my property to the gas company.

    2. Correct me if I'm wrong, but did Mr. Ely not start to build his house until "A.C"? I don't know about Scott's personal water tests, but from the publicly available information that I've seen it looks like the few folks that did have methane in their water could vent it fairly easily, and those with minerals in their water could utilize a filter similar to what many in the area had been using for years due to the naturally poor water quality?

      I'm not trying to judge, be obnoxious, or otherwise minimalize what you all on Carter Road have been through, but I think if you're going to write about one family member selling his property to the gas company, it bears mentioning that another one is building a very expensive house on that same property. If I'm wrong, my sincerest apologies.

      Just trying to be pragmatic. ;)


    3. This comment has been removed by the author.

    4. Mike, Thanks for your post and raising the question. I think the broader point is that some (not all) people are going to fight to stay on family land and they are determined to see the problem fixed rather than give up and leave. Bill Ely, as quoted in this article, pretty much says this. My interviews with Scott and the late Ken Ely also reflect this mindset in Under the Surface. It’s really not a radical theme, but a common human reaction by people who feel their land and lifestyle is threatened by outside forces.

    5. Mr. Knapp wrote: "I don't know about Scott's personal water tests, but from the publicly available information that I've seen it looks like the few folks that did have methane in their water could vent it fairly easily, and those with minerals in their water could utilize a filter similar to what many in the area had been using for years due to the naturally poor water quality?"

      This cavalier attitude, usually expressed with contempt towards those with opposing points of view, is all too common from industry representatives, and those lessors who stand to, or hope to, collect royalty payments from shale gas extraction.

      I'm a firm believer of the victims, when they state they did not have problems with their water "BC", or pre-drilling by Cabot, and that "AC", the problems in that nine square mile area began to appear in spades. PADEP concurred by holding Cabot responsible in the Consent Agreements. This nightmare situation, for the 36 or so households that were impacted, is winding down for most, but only after several years of a form of hell on earth.

      It is virtually impossible to believe Mr. Knapp's sincerity, when he wrote: "I'm not trying to judge, be obnoxious, or otherwise minimalize what you all on Carter Road have been through...", since he has done that often before, and, continues to do that by the very opening of his comment, the part that I quoted above.

      The simple fact that this industry always refuses to acknowledge any damage they have done, and that they are responsible for, should be a warning to those who think they can "work with" this industry, with the hopes of making improvements in the industry practice.

      That can only be done by State and Federal law. "Voluntary" best practices, and promises, do not mean anything.

    6. I'm from the industry, and I have never failed to acknowledge that the gas industry is responsible for having caused some issues. Dimock most certainly being one of those examples. Even the EID-financed "Truthland" movie features Loren Salsman stating that ineffective cementing practices caused methane migration in Dimock.

      I don't expect you to believe my sincerity, although I hope that you may consider it in time. I'll be the first to admit that I've posted things that have been overly defensive in the past. I used to take industry criticism far too personally, mostly because I DO care. I live here, have my whole life. My dad has made his living by being a professional fishing guide here in Western PA, and is one of the more well known outdoor writers on the East coast. I cherish our natural wonders as much or more than anyone else. To show that we practice what we preach so to speak, we've drilled wells less than 100 feet from: our president's house, his mom and dad's house, his grandparent's house, his uncle's house, my house, my parent's house, our VP of Operation's house, etc. We drill in the area where we live, quite literally in our friends and neighbor's back yards.

      I do not agree that we should be banning gas drilling. I think that drilling, if properly regulated and conducted by reasonable, responsible companies, can be a huge net positive to our environment as well as our economy. This is the view that John Hanger has. I am a big fan of his. If it can be done properly, let's make sure that it's being done properly so we can maximize the benefits, minimize the negatives, and make sure that nobody else has to go through what the folks in Dimock have been faced with.

    7. Dear Mr. Knapp,

      While I disagree with you as to industry's ability to voluntarily be reasonable and responsible, as well as Pennsylvania's government (and PADEP) to adequately oversee and enforce anything in relation to shale gas extraction in our Commonwealth, or to actually protect the citizens and environment, and while I dispute your assertion that it can be a huge net positive to our environment and economy (other than the obvious aspect that our lives and economy are currently based upon the burning of fossil fuels, and therefore, there is no way to just turn off the spigot to zero, and I don't know anyone who thinks that way), I very much appreciate the comment you just posted.

      If discussion had always been conducted thusly, we all might have had fewer white hairs, and less heartburn, to put it mildly. Whatever efforts you make towards bringing your industry into both reasonableness, and, responsibility, would be appreciated.

      As to "Truthland" and EID, you may point to a brief statement by Mr. Salsman, but the overwhelming take away from both that short PR film, and, the later "FrackNation", is that the methane migration conditions were pre-existing, naturally occurring, that the water was fine (isn't there a clip of a smiling Mr. Salsman drinking a glass of water somewhere in one of those films?), and that because the US EPA declared the water to not be contaminated in June or so of 2012, that the water had never been contaminated, which is about as far from the truth as one could get.

      May you and your family have a wonderful Thanksgiving.

    8. Mr. Barth,

      Thank you for your kind words. This discourse would most indeed benefit from a generous dose of civility. I was at Tony Ingraffea's talk in Butler County, PA last week and I feel quite certain that I was very much in the minority being a gas industry guy, but I was treated very nicely by the folks in attendance and had a very nice lengthy discussion with a few folks after the event (until we got the boot by security, actually).

      While I know it may not seem this way, especially with as heated the rhetoric surrounding this issue has become, there are MANY people in the oil and gas industry who have far more in common with you that you might think. Most are outdoorsmen. Most have young families. Most want to see the environment and the health and well being of our neighbors protected to the utmost degree. I hope that the common ground we have can be built on, and that one day folks such as yourself might not be so skeptical. I view every day as a fresh opportunity to show the world that this can be done right. I also understand that words are hollow.

      I wish a wonderful holiday to you and yours as well.


    9. Michael, as a former employee of Schlumberger Well Svc. I can say that with current technologies drilling will never be done safely 100% of the time or even 75% of the time. Current cementing practices are but a shot in the dark at best. The amount of clean water usage and thus toxic chemically contaminated radioactive flowback is totally unacceptable in todays world. Renewables should be the immediate focus of world energy and should recieve the major subsidies from our tax dollars, not big oil and gas. 161 water supplies affected in Pa. with 4000+ violations for approx 7000 wells drilled and a target of 70,000 for Pa. is beyond alarming. Do the math. Most of these companies employees are from other states which is where they return when a job is finished. They could care less about our water, air, property values or life styles and this is just another facet of this industry that cannot or will not be controlled......

  7. After the boom, the shale-gas towns will be left with empty rental units previously rented by shale workers who are no longer around, houses that used to have good water wells but no longer do, empty lots that used to have houses (like the Sautner house) but no longer do, aging gas infrastructure (including the cement in the well bores meant to protect the water supply), a list of serious, ongoing environmental problems, and the memories of those families who have left in search of safer, more pleasant places to live and work. It's a high price to pay, and it would be bad enough if the boom continued for 50-100 years, but data from older shale areas suggest that 10-15 years may be more like it. What a waste.

    1. Mary,
      I think I brought this up on this blog before. One of my freak outs, among many, is deeding of property based on land use. This affects environmental regulations. For instance, a property or area deed as industrial may have different compliance standards than property deeded as commercial, residential or agricultural. Given the go-go effort to push shale gas in places like Pennsylvania this may have not been much of an issue at the time.

      The agriculture or residential landscape of Pennsylvania seemed to fit nicely with an industrial effort like shale gas exploitation. The surface would only be impacted just temporarily during drilling and the subsurface infrastructure would be out of sight and hopefully mind. Operations and maintenance impact would be the occasional wellhead valve turn and greasing of a compressor motor or two. This optimistic and swimmingly operational assumed endeavour don't seem to be the case in some of the Marcellus region.

      Given this situation brought up by Tom and others in previous posts, I'm kind of worried about land use changing. The question that should be asked of industry and Pennsylvania is: will the impacted areas be re-deeded from agricultural/residential to commercial or industrial? If the area deed gets changed this could possibly impact how shale gas/oil operations are controlled and potentially impacted areas remediated.

    2. Michael,

      Yes, I do remember you've brought this up before. Sounds to me like a point that deserves further investigation. (With deed restrictions I think you are dealing with land use on a property-by-property basis, right? As opposed to zoning, which would affect a larger area? I mention this because there are a lot of places in PA that have no zoning.)

    3. Excellent question Mary. I'm about 50 percent sure that Pennsylvania is on a site by site basis when dealing with environmental impacts. I'm obviously not the best real estate person and environmental consultant on the internet. Hopefully, at a minimum this comment will inspire further research into the matter by those interested.

      Yes a deed restriction pertains to property. Area or zone restrictions may be at the whim of municipalities. Either way it may affect the property value. Especially if the area was to get zoned or rezone with future use restrictions. As you may tell, I'm confused on this topic.

      Lets say a property is impacted by drilling or production operations. I'm guessing two things may happen: (1) future use restrictions and (2) cleanup levels of groundwater dependent on proposed restrictions. So if a property is deed restricted and/or the area is zoned/rezoned, that could change the required level of cleanup for both the soil and groundwater. Meaning the site could be defined as clean, but the well water undrinkable. Hopefully, I'm coming off a little less confused.

      As you know, well water quality adds greatly to rural property values. Obviously New York has its own set of regulations. Here's Pennsylvania Code on Site Specific Standards on groundwater as an example:

      Copied from PA code linked above

      § 250.403. Use of groundwater.

      (a) Groundwater will not be considered a current or potential source of drinking water where groundwater has a background total dissolved solids concentration greater than 2,500 milligrams per liter.

      (b) Except as provided in subsection (a), current and probable future use of groundwater shall be determined on a site-specific basis.

      (c) Drinking water use of groundwater shall be made suitable by at least meeting the primary and secondary MCLs at all points of exposure identified in § 250.404 (relating to pathway identification and elimination).

      (d) Current drinking water or agricultural uses of groundwater, at the time contamination was discovered, shall be protected.

      end of copied section

      In summary, I'm not freaking out any less, yet.

    4. Michael--Thanks for the longer explanation. So, with the understanding that you are not an expert on how this would work in PA, it sounds as if what you are saying is that there is at least a possibility that this is how it would work:

      1) gas company knows that a property has been contaminated by the company's activities or at least suspects that it might have been contaminated by the company's activities;

      2) gas company buys the property--maybe even at a price that is at or above the pre-pollution fair-market value (very "generous");

      3) gas company now owns the property, so it has land-use restrictions attached to the deed (e.g. no home can ever be built on the land--and if there is already a home on the property, maybe the company even tears the home down (I'm speaking purely hypothetically, of course));

      4) gas company then resells the property, perhaps at a bargain-basement rate, because the gas company knows that even though it has taken a loss on the price of the property, it will still come out way ahead in the event that the company is ever held liable for polluting the land, because now the deed restrictions are such that a less comprehensive (and therefore less expensive) pollution clean-up would be required;

      5) meanwhile, the party (or parties) who purchased the land at bargain-basement rates will end up owning a piece of land that will never be cleaned up to anything like the standard that existed pre-pollution;

      6) given a sufficient number of these exchanges, a town could end up with a lot of property that is no longer fit for its original use (both because there are restrictions on the relevant deeds and because the property has not been and will not be restored to anything like its original state).

      Do I have that straight, or am I missing something?

    5. Outstanding Mary. I'm probably getting close to being out of my depth at this point. You seem to have it fairly straight. At least straighter than me. There could be many scenarios for a hypothetical property in Any State, USA: sale pre/post well or well field abandonment; retention of water rights by seller; retention of environmental liability by seller, etc. As you can see this gets into many areas of commerce beyond the science and engineering of site and groundwater protection and remediation. I'm guessing there's an entire universe of criteria (legal and accounting for example) that would have to be looked into. In a perfect world, the state agencies tasked to address residents' environmental and property concerns would be more than willing to do so. Saving the internet from my freak outs in the comments sections of blogs.

    6. So I think it would be safe to say that the gas industry's practice of buying and selling these properties, the deed restrictions involved and so on deserve a closer look by those who are experts in the relevant environmental and real estate laws, etc.

      In the meantime anyone contemplating buying one of these properties from the gas industry should really be very careful about what they may be getting themselves into, and any town in which properties are being handled in this manner should really look into what, exactly, the long-term consequences for the town may be.

    7. Certainly, the management of liability issues is a driver. Mary and Michael raise some very practical points worth exploring.

    8. Got a little long winded. Totally off topic. I just downloaded Google's new app "Newsstand." It's an aggregation of magazines, newspapers and some blogs. Your blog showed up. It doesn't include the comments, but a reader could jump to the site if necessary. I'm guessing that 80 percent of readers don't participate in the comments. So that's a good thing maybe. Subscriptions seem to go through google Play so us forgetful readers don't have to memorize and manage yet another password and subscription. There's got to be a way that this benefits creators of content.

  8. I wanted to add another thought re the discussion of gas companies buying up property, as has happened in Cabot's case in Susquehanna County. Susquehanna County has received a lot of press and a lot of attention from the public, but it is certainly not the only area where there has been a lot of drilling and it is not the only area that has experienced water quality issues. Recall that Cabot bought the properties via a subsidiary called Susquehanna Real Estate 1 Corp. If there were not so many people paying attention to what goes on in Susquehanna County, would we even know about the properties that Cabot acquired? This makes me wonder what might be going on in other areas of PA (like Bradford County and SW PA) and in other states where drilling and fracking are occurring--have other, similar, property transers (possibly via subsidiary companies and possibly accompanied by the creation of deed restrictions) gone on in other places?

  9. FYI DEP told me that the purchasing of the property, by the gas company would allow better access to testing/decision making....

    1. Will the operator and DEP set up environmental monitoring stations on this property for testing the land, water and air any time soon? There will have to be physical structures both above and below the surface. Neighbors should be able to at a minimum, visibly monitor the installation and operational progress. This could include: construction and sampling of groundwater monitoring wells and placement of ambient air monitoring kits. Obtaining sample results may become problematic given the new property ownership.

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