Exxon Mobil Inc. (NYSE: XOM) says that Pennsylvania prosecutors are unfairly picking on the oil behemoth in an effort to stop hydraulic fracturing, or fracking, in the gas-rich state.
The company’s subsidiary, XTO Energy Inc. (XTO: US), is fighting criminal charges over a 2010 wastewater spill that Pennsylvania authorities say leaked pollution into a tributary of the Susquehanna River. The charges are the first of their kind against a public company drilling in Pennsylvania’s Marcellus Shale, the Wall Street Journal reported.
In a recent motion, XTO accused Attorney General Kathleen Kane of singling the company out as part of “an arbitrary and improper law-enforcement agenda” whose goal might be to “end hydro-fracturing in Pennsylvania altogether.”
Kane fired back this week in a court filing that calls XTO’s claims “nothing more than weak attempts to obfuscate the truth,” the WSJ reported. Carolyn Myers, a spokeswoman for the attorney general’s office, told the WSJ that the state has convicted more than 800 individuals and companies of environmental crimes. “No single industry has been targeted,” she said.
The case involves a 57,000-gallon spill of wastewater that had been used in fracking operations in the north-central part of Pennsylvania four years ago. Fracking requires blasting millions of gallons of water, sand and chemicals into dense shale rock to crack open deposits of natural gas, and much of the liquid returns to the surface. XTO had arranged for contractors to store the flowback fluid in large tanks where it could be treated and reused for other fracking jobs.
When a Pennsylvania inspector showed up unannounced at the storage site, however, the state employee found that wastewater was leaking from a partially open valve. The discovery set in motions investigations by Pennsylvania’s Department of Environmental Protection and the U.S. Environmental Protection Agency, the WSJ noted.
XTO maintains that the contractor is responsible for the leak and that the energy firm therefore can’t be held liable. In July 2013, XTO settled civil litigations that it violated the federal Clean Water Act and agreed to pay a $100,000 penalty and take measures to prevent wastewater spills.
In September, Pennsylvania prosecutors filed eight criminal misdemeanor charges against XTO. Each charge carries a maximum penalty of $25,000 a day. The company in response called the criminal charges "unwarranted and legally baseless because neither XTO nor any of its employees intentionally, recklessly or negligently discharged produced water on the site," according to a statement.