Cabot Gas and Oil reaches $4.1 million settlement with Dimock Township residents
The state Department of Environmental Protection and Cabot Gas and Oil Co. reached a settlement Wednesday evening to avoid the construction of a controversial water pipeline in Susquehanna County.
As part of the settlement, Cabot agreed to pay $4.1 million to families in 19 Dimock Township households who claimed their water wells had been polluted by the company’s natural gas drilling activities in the region. Cabot will also pay for the installation of gas mitigation systems in each of the effected homes.
Prior to the settlement, DEP planned to build a 5.5-mile pipeline from nearby Lake Montrose to supply the homes with fresh drinking water. The project, estimated to cost $11.8 million, was going to be funded by grants and loans offered by the Pennsylvania Infrastructure Investment Authority (PennVest), which provides for sewer, storm water and drinking water infrastructure projects.
The project generated strong opposition within the community, even among some of the individuals who were going to benefit from the pipeline.
DEP Secretary John Hanger said the department would abandon the plans to build the pipeline after the settlement was reached.
“Our primary goal at the department has always been to ensure that the wells Cabot drilled in Dimock were safe and that they were not contaminating local private water supplies,” said Hanger in a statement. “This agreement lays the foundation for families to finally put an end to this ordeal.”
Thursday, Gov. Ed Rendell praised Mr. Hanger for negotiating the settlement.
“It’s a good settlement because [Cabot] shared the fiscal responsibility of making this right,” said Mr. Rendell. He said he was not concerned about future drilling by Cabot because the state is watching them carefully and will hold the company accountable for future violations of drilling regulations.
DEP began investigating reports of stray gas in Dimock wells in January 2009. In April 2010, DEP ordered Cabot to cap three wells in the Dimock area believed to be the source of the migrating gas. At the same time, the department suspended its review of pending permit applications from Cabot for new wells in Pennsylvania.
As part of the settlement, Cabot will pay DEP $500,000 to cover the state’s investigation of the gas migration issue.