Halliburton to pay $1.8 million DEP penalty
The loophole wasn't big enough for Halliburton Co.
The company that helped make fracking popular with a loophole critics named after it agreed to pay a $1.8 million fine for its work with local drillers, perhaps the largest fine assessed during the state's shale gas boom. It violated an exemption that allowed it to store small quantities of waste from its acid-based fracking fluid, storing more than 10 times the limit at its facility in Indiana County, the Department of Environmental Protection said on Tuesday.
Halliburton has said the work didn't cause environmental harm, but observers say the violations should be enough for a criminal investigation. The company's subsidiary Halliburton Energy Services Inc. went 12 years without labeling its hydrochloric acid as hazardous waste — as required — and had more than 255 shipments of the waste through its Homer City-area site without permits from the DEP.
“This is a flagrant violation of our rules on record-keeping,” DEP spokesman John Poister said. “This sends a message that you don't have to foul the environment but if you're not following the department's regulations, it's still serious.”
Avoiding permits would have saved the company time and fees, Poister said. Unlabeled trucks could have posed a hazard during any spill, putting truckers, emergency responders and the public at risk of serious health problems, Poister and a safety expert said.
A woman at the Halliburton office in Center, north of Homer City, referred calls to headquarters in Houston. A spokeswoman at Halliburton there declined to explain how the problem started and said the company would not do interviews.
“Halliburton ... is working with the department as part of the ongoing, collaborative effort to ensure the safe and environmentally friendly development of Pennsylvania's natural resources,” spokeswoman Chevalier Mayes said in an email.
Hydrochloric acid is so corrosive it dissolves cement and minerals, making it useful to help start the hydraulic fracturing, or fracking, process used in shale gas drilling. On its website, Halliburton calls hydrochloric acid “the solvent of choice for many production-stimulation procedures applied within the oil and gas industry.”
Short-term exposure in humans can cause severe burns and scarring and potentially deadly respiratory problems, according to the U.S. Environmental Protection Agency.
“That is serious. As a safety person, coming in contact, we should know what we're actually dealing with,” said Turkeytown fire Chief Larry Nemec who was on the scene when a Halliburton tanker leaked water and hydrochloric acid residue in July, closing Interstate 70 near Smithton for more than four hours. “It turned out it wasn't as bad as it could have been. But they should be properly labeled, so when they do have accidents, you know what you're really dealing with.”
Halliburton, with revenue of $29.4 billion last year, is one of the big three service companies that supply the chemicals and drills for oil and gas production companies. It helped commercialize the fracking technology that's unlocked large quantities of gas from the Marcellus and other shale formations.
Critics mocked it for the so-called “Halliburton loophole” that was part of a 2005 federal law. It limits federal oversight of the chemicals pumped thousands of feet deep to help free oil and gas.
In Indiana County, Halliburton violated a different exemption, one related to waste storage, according to the DEP. It was allowed to store 220 pounds per month of waste from the acid it sells but was handling more than 2,200 pounds per month, the DEP's Poister said.
It kept no records of that work and processed and treated that waste without a permit, all in violation of state rules, the DEP said. It shipped the acid waste for disposal at another company, Hart Resource Technologies Inc.'s Creekside plant, though Hart didn't have a permit to do the work, according to the DEP.
Hart's former owner, Paul Hart, said the company was since sold to Fluid Recovery Services LLC and he referred questions to a spokeswoman who could not be reached. Both companies signed separate consent agreements with the DEP and the EPA in 2013 for unrelated violations for exceeding permitted limits for the waste they could dump in local rivers. Hart will not face more penalties for the Halliburton case, Poister said.
“They are not being fined because they cooperated so completely and aided us in building this case,” Poister added. “There was no record keeping (from Halliburton). We literally had to reconstruct every shipment.”
The DEP had said it set a record in 2011 by fining Chesapeake Energy Corp. $1.1 million for damaging water wells and causing a fire. Poister said he knew of no bigger fines for drilling-related work since then.
Exxon Mobil Corp. subsidiary XTO agreed to pay more than $20 million for a wastewater spill into the Susquehanna River basin, but most of that was for its own improvements. The fine was only $100,000 to the EPA.
XTO faced a criminal investigation and Halliburton should, too, said George Jugovic Jr., a Pittsburgh-based lawyer with the environmental group Citizens for Pennsylvania's Future. He led the southwest regional office of the DEP for several years while Halliburton did the work and said a criminal investigation is the only way to find out what the company knew and if it intentionally mischaracterized its waste.
The site was supposed to handle residual waste — not hazardous — bringing a much lower level of scrutiny, he said. The agency inspected the site about once a year, but it took an unusual tagalong from a waste management inspector to prompt the questions that led inspectors to find the violations in 2011, Poister said.
The company fixed the problems when they were told about them then, he added. Poister said he did not know whether the DEP referred the case to the state Attorney General's Office.
“For this to go on this long, it's evidence of a corporate culture that lacks concern for environmental compliance,” Jugovic said. “It's just incredibly outrageous.”
Timothy Puko is a Trib Total Media staff writer. Reach him at 412-320-7991 or email@example.com.