Chesapeake’s Dirty Energy

Nat gas giant under DOJ investigation

March 2, 2012

The Justice Department is investigating Chesapeake Energy (CHK)—the second-largest natural gas producer in the U.S. that spent millions pushing the idea that natural gas is a clean alternative to coal—for possible criminal violations of the Clean Water Act.

In a filing with the Securities and Exchange Commission Wednesday, Chesapeake disclosed that the company is under investigation for three of its well sites in West Virginia.

Penalties under the Clean Water Act range as high as $37,500 per day, per violation.

The EPA declined to comment on ongoing enforcement issues.

Michael Kehs, a spokesman for Chesapeake, told AP that the investigation involves "the movement of dirt or rock without proper permitting."

The AP reports:

Chesapeake said in the filing that it also is working with the Environmental Protection Agency to resolve compliance orders issued in the fourth quarter of 2010 concerning the company's compliance with Clean Water Act permitting requirements in West Virginia. …

In November 2010, the EPA cited a subsidiary, Chesapeake Appalachia LLC, for allegedly filling in four streams in Wetzel and Marshall counties while building roads and laying pipeline for Marcellus shale gas drilling projects. In one case, inspectors found that Blake Fork and a picturesque waterfall near New Martinsville had been completely filled with gravel for a road. …

Chesapeake Energy and its CEO, Aubrey McClendon, have pumped millions of dollars into green lobbies to market natural gas as a cleaner alternative to coal energy.

As the Washington Free Beacon previously reported, Chesapeake bankrolled the Sierra Club’s "beyond coal" campaign to the tune of $26 million. Chesapeake also funded campaigns by the American Lung Association pressing for tighter EPA air quality regulations that coal organizations said would cost the industry billions of dollars.

The air quality regulations were promoted by left wing environmental groups such as the Center for American Progress. The Washington Post reported in February that energy tycoon T. Boone Pickens, who has significant investments in natural gas, gave the Center for American Progress more than $400,000 to fight for the regulations and a bill introduced by Pickens to further subsidize the natural gas industry.