Wednesday, August 15, 2012

Please, Please Let A Settlement End The Cabot-Dimock Litigation

Laura Legere reports that Cabot and 32 of 36 families in Dimock that sued the company for contaminating their water wells are nearing a settlement. See:

Please, please let a settlement end the Cabot-Dimock litigation.  It's time and would be good for all involved.

To recap, the Pennsylvania Department of Environmental Protection found in 2009-2010 that gas drilling mistakes caused gas to migrate to and contaminate 18 water wells.  Substantial testing by DEP also found that fracking fluids had not contaminated the aquifer or water wells.  EPA testing in 2011 and 2012 confirmed that fracking fluids or chemicals had not contaminated water wells.

To remedy the documented gas migration problem at 18 water wells, DEP ordered the plugging and repair of suspect gas wells, stopped issued drilling permits in a zone where gas had migrated, fined Cabot cumulatively more than $1.3 million, and ordered compensation in the amount of $4.1 million be paid through escrow accounts to the 18 families.  The average payment was $201,000 and was valued at two times the property value of the home.

Of those 18 families for whom escrow accounts were established, 7 received the payments and 11 chose not to take the payments, while continuing litigation.

The lessons from this case are numerous for regulators, companies, landowners, and environmental organizations, but the most important is the importance of excellence in cementing and gas well design to prevent gas migration.  An ounce of prevention is worth a pound of cure.


  1. Mr. Hanger,

    For the sake of accuracy, as you are aware the litigants were not offered two times the property value of the home. The agreement was based on two times the assessed value of the home. The assessed value in this area is roughly 1/2 the fair market value aka property value.

    1. We don't agree about what the agreement said. I don't have it in front of me. The agreement calculating an amount equal to two times the market value. DEP used the best available information about market values of property. An average payment of $201,000 was the result. That is much higher than the average home value in PA. The agreement allowed receipt of the funds without requiring the droping of any other litigation. I remain hopeful that this litigation can be finally settled and lessons learned from the case.

    2. John, you are correct. The escrow amounts deposited by Cabot Oil & Gas for the homeowners were equal to the "Fair Market Value" (Fair Mkt Land Value + Fair Mkt Bldg Value). You can see dollar amounts by following the link:
      The PA DEP still has not answered The Dimock Township Residents' letter of July 23, 2012. See
      Any thoughts on that, John?

    3. Correction: What was offered to the homeowners was 2X the Fair Market Value.

    4. On the letter, I hope you have had the opportunity to discuss the matter and share information with the right folks at DEP. I would think you would get a reply soon. At this point, I have not seen methane test results since December 2010.