PA Environment Digest Blog: Olympus Energy Shale Gas Driller Expresses Fear Municipalities Will Use Their DEP Compliance Record With Hundreds Of Violations To Help Make Local Land Use Decisions On Oil & Gas Infrastructure Projects

During a May 10 Commonwealth Court hearing, an attorney for Olympus Energy LLC said the hundreds of notices of violation issued by DEP to the company should not be admissible in local land use proceedings because they do not prove the company’s shale gas drilling operations have an adverse impact on the environment “beyond the normal that would be expected from any oil and gas development.”

The case involves an Olympus Energy land use application for the Dionysus shale gas well pad submitted to West Deer Township, Allegheny County in 2019.

In December 2021, the Township found the shale gas well pad proposed by Olympus failed to meet their zoning ordinance setback requirements of at least 650 feet from preexisting buildings.

The Township also concluded “with a high degree of probability that the proposed deep well site would substantially affect the health, safety and welfare of the community beyond what is normal for this type of use,” according to Bridget Holbein, Commonwealth Court Office of Legal Counsel.

The determination was based in part on the company’s DEP compliance record.

Olympus appealed the Township decision to Allegheny County Common Pleas Court and they upheld the West Deer Township decision in an August 2022 ruling.

Olympus appealed the County Court decision to Commonwealth Court in September of 2022 (Docket No. 991 CD 2022).

“The first and the most important is the issue of the admissibility and probative value of Department of Environmental Protection notices of violation. We think that was an error for the [Township] board here to rely upon those. It has implications way beyond this specific application,” said Blaine Lucas, counsel for Olympus Energy. “[It] implicates every other application for zoning that Olympus might have. It implicates any other application that any other natural gas operator might have, and it implicates basically any zoning applicant who may also be regulated by the Department of Environmental Protection.”

“There are hundreds and hundreds of NOVs for Olympus and other operators. In Olympus's case there were [also] four consent orders [penalty agreements], only four,” said Lucas. “The big issue here is the DEP NOVs are just third party allegations and their hearsay. There's no firsthand testimony.”

[Note: from January 1, 2014 to December 31, 2019, the DEP Oil and Gas Compliance Database shows DEP issued Olympus Energy 516 notices of violation and another 270 NOVs from 2019 to May 5, 2023.

[Read more here about the Olympus Energy compliance record submitted to the Township.

[DEP issues between 959 and 1,323 notices of violation to unconventional shale gas operators annually. Read more here.

[So far in 2023, DEP has issued 557 notices of violation to unconventional operators. Read more here]

“If there was firsthand testimony from one or more other sites that identified a particular issue that somehow [they] would be transferable over and the same issues would occur at the subject application. Theoretically that's possible, but we don't have that here. We just have this litany of NOVs with no first-hand testimony on any of it at all.”

“Keep in mind too, the allegation here is that Olympus's history is different than other operators. Well what do we do about that?,” said Lucas. “We asked the DEP, ask for a subpoena for DEP inspectors, that we ask for a subpoena so other operators, people can come in and explain all their hundreds of violations?”

“We just think this is such a slippery slope. This was nine nights of hearings [by the Township] that could just go on forever,” said Lucas.

John Smith, the attorney for the objectors to the well pad, pointed out the DEP compliance record considered by the Township was not just the list of notices of violation issued by DEP, but it was the company’s compliance record laid out in DEP’s eFACTS database, something completely different. [Click Here for the Olympic Energy eFACTS record.]

“So throughout their briefs, Olympus says, "It's unfair. We've been denied due process. We can't cross examine." If you pull and click on any of the information in here [the eFACTS record], and I invite you to do so, what Mr. Crowley [an objector to the well pad] used, it all explains the violations,” said Smith.

“It explains whether there was an appeal. It explains what happened. It explains whether it was corrected. It basically walks you from beginning to end of their admission of liability every time,” explained Smith.

“So in this particular one that I have here for Olympus, that was part of Mr. Crowley's consent assessment or CACP [Consent Penalty Agreement with DEP] was entered into, it requires by DEP regulation, an admission of liability from Olympus. And they pay a fine,” said Smith. “And every time they pay a fine, it's an admission of liability. Every time they don't appeal, it's an admission of liability.

“So the idea that these are just mere allegations and they equate them to a complaint is not the case. This is a docket basically kept in the regular course of business by the DEP explaining what happened and what the result was,” said Smith.

“So when Olympus gets a notice of violation, they have a choice. They can meet with the DEP, and DEP will give them corrective action. DEP will say, "You have this many days to do it." [Or they could] say, "That was water spilled. We're not doing anything," said Smith.

[Note: DEP inspection reports that lead to formal written notices of violation are first-hand, often detailed accounts of what one or more DEP inspectors finds during an inspection and specifically defines any violations of regulations they are observing.

[Operators like Olympus have the opportunity to respond to those violations or DEP directs them to respond to those violations in a written report on how the company plans to bring their location back into compliance.

[Click Here from a recent Olympus Energy example involving an incident where Olumpus shale gas wells interfered or “communicated” with another shale gas well in Westmoreland County on March 14, 2023. Click Here to view other inspection reports of Olympus Energy facilities.]

Under questioning by Judge Michael Wojcik, the attorney for Olympus admitted the company had the opportunity to challenge the evidence concerning the NOVs, but chose not to.

Judge Wojcik went on to summarize that the finders of fact in this case [the Township] determined they [NOVs and compliance record] were “probative” or evidence of the company’s environmental compliance record relevant to their decision-making and made a factual finding.

John Smith, attorney for the objectors to the well pad, also took issue with the Pollution Prevention Contingency Plan required by DEP and submitted to the Township by Olympus as required by their zoning ordinance.

Smith noted DEP requires a company to submit their pollution incident history along with the PPC Plan to the agency.

“The township ordinance requires that PPC plan to be submitted to the Township at the time of the application. They submitted it. They left off their pollution history,” said Smith.

“When you look at the [DEP] guidance document from 2005 [for] the PPC plan, it says, "Give us your pollution history, all your past incidents," because they want to make sure on this new site that whatever happened in the past has been cured and something's going to be done differently,” said Smith.

“That's what the township should want too. That's why the information is probative. That's why it's relevant. And when the DEP issues fines, what they look to is the past conduct,” said Smith.

Smith also noted some municipalities may not be aware that a pollution incident history is required to be submitted as part of the PPC Plan.

“The DEP also can look at the past practices and past conduct to deny a permit altogether. And so that's why the PPC plan is a compilation of the pollution incidents and so is the eFACTS and so is the DEP website,” said Smith.

Questions during the oral argument by several judges indicated this case may be decided on the setback issues alone-- the well pad plan submitted by Olympus Energy did not comply with the zoning ordinance.

If Commonwealth Court ends up not ruling on the notice of violation/ compliance record issue and lets the Allegheny Court ruling stand, it will be a major statewide precedent other communities can use in evaluating oil and gas facility land use and zoning applications.

And as the attorney for Olympus Energy said, DEP's compliance information is already being used by other communities.

But, until the ruling is issued by Commonwealth Court, we won’t know any of this for sure, and then the PA Supreme Court may be asked to weigh in.

The May 10 oral arguments in this case were an En Banc Session of Commonwealth Court, meaning all the judges on the Court could participate.

Click Here for video of Commonwealth Court hearing.

(Photo: Olympus Energy Midas shale gas well pad in Plum Borough, Allegheny County.)

NewsClips:

-- Post-Gazette - Anya Litvak: Judge Rules Environmental Violations Can Inform How Townships Evaluate Oil and Gas Land Use Permits

-- TribLive: Olympus Energy As Well In Washington Township On Hold As More Discussions To Be Scheduled

-- Environmental Groups Raise Serious Compliance Issues With Olympus Energy-- Over 600 Violations On 13 DEP Permits-- In Comments On Proposed Shale Gas Drilling Pad In Allegheny County [PaEN]

-- DEP: Olympus Energy Natural Gas Driller Fined $175,000 For Water Quality Violations In Allegheny County [PaEN]

-- Olympus Energy Fracking Interfered With Another Shale Gas Well In Westmoreland County [PaEN]

-- Olympus Energy’s Hyperion Midstream Company Natural gas Pipeline Broke Loose From Supports And Crashed Into Home In Westmoreland County [PaEN]