Commission Upholds Order to Revoke D&L Permits
YOUNGSTOWN, Ohio – The state's oil and gas commission has denied an appeal by D&L Energy and upheld an earlier order issued by the Ohio Department of Natural Resources' chief to revoke the company's six operating permits.
D&L's permits were revoked in February after it was discovered that on Jan. 31 an employee from a related company, Hardrock Excavating, was found intentionally dumping contaminated wastewater from drilling operations down a storm drain on D&L's property.
The company appealed the order in March and argued that since Hardrock Excavating dumped the wastewater, D&L should not be held liable.
However, the commission found that D&L and Hardrock owner Lupo wore "two different hats" relative to the incident. While he ordered the wastewater dumped as the owner of Hardrock, he also allowed it to be dumped on D&L property, thus acting as an officer for that company.
"Mr. Lupo cannot feign ignorance of his responsibilities to D&L Energy in authorizing such dumping to occur on D&L's property," the commission found.
That contamination leaked into a nearby tributary and subsequently into the Mahoning River. The federal government then charged Lupo and an employee with one count of violating the U.S. Clean Water Act.
In its findings, the commission questioned whether D&L’s participation in the Jan. 31 incident was “so egregious as to justify removing this company from the disposal business? And, the answer is, yes."
The commission said that D&L’s former president Ben Lupo, who also owned Hardrock and other companies at D&L's Salt Springs Road site, admitted to instructing employees to illegally dump the wastewater.
During the cleanup, evidence given to the commission determined that the "illegal disposal of oilfield wastes into the storm sewer at 2755 Salt Springs Road was a repeated occurrence, if not a routine practice."
Through its corporate officer, in this case, Lupo, "D&L acted in total disregard of Ohio law and its own disposal plans. The violations committed and condoned by D&L were egregious and repeated," the commission determined.
The commission said that D&L used a waste hauler with improperly identified trucks and failed to make certain filings to the division. While these violations alone would not warrant revocation of the company's permits, the commission determined that the "aggregate effect of these violations, when combined with the repeated dumping of oilfield waste on D&L property, shows and operator who cannot be trusted to act in compliance of Ohio law."
D&L filed for Chapter 11 bankruptcy in April. The company held six permits to operate injection wells in the area, and was denied four new applications to drill additional wells.
A D&L well at Youngstown's Ohio Works Park in 2011 was tied to a series of earthquakes that shook the Mahoning Valley that year.
Copyright 2013 The Business Journal, Youngstown, Ohio.
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