One of Pennsylvania's largest drillers will be allowed to extract natural gas from beneath a rural community where it has been banned for a dozen years per accusations the company polluted the village water supply, according to a settlement with state regulators.
The state's Department of Environmental Protection lifted its long-term moratorium on gas production in Dimock, a small village in northeastern Pennsylvania that gained national notoriety when residents were filmed lighting their tap water on fire.
The agency's agreement with Houston-based Coterra Energy Inc. is dated Nov. 29 -- the same day Coterra pleaded no contest in a high-profile criminal case accusing the company of allowing methane to leak uncontrolled into Dimock's aquifer. State officials denied that Coterra's plea to a misdemeanor charge was in exchange for being allowed to drill for potentially hundreds of millions of dollars worth of gas.
Some of the residents, who have long accused the Department of Environmental Protection of negligence in its handling of the water pollution in Dimock, said they felt betrayed.
"We got played," said Ray Kemble, the most outspoken of a small group of Dimock residents who have battled the drilling company and state regulators.
Coterra will be permitted to drill horizontally beneath a 9-square-mile area of Dimock and frack the gas-bearing shale that lies thousands of feet down. That's been forbidden since 2010, when environmental regulators accused Coterra's corporate predecessor of failing to keep its promise to restore or replace Dimock's water.
The Department of Environmental Protection said it began negotiations with Coterra in early 2022, shortly after the company formed from the merger of Cabot Oil & Gas Corp. -- the driller deemed responsible for fouling Dimock's water supply -- and Cimarex Energy Co.
"When Coterra took over responsibility of the wells after the Cabot merger, they actively engaged with DEP to address the remaining issues in the area," said agency spokesperson Jamar Thrasher. "Coterra committed to strict controls, monitoring and evaluation, resulting in some of the most restricted conditions on any drilling in the commonwealth."
Cabot, the predecessor company to Coterra, was charged in June 2020 with 15 criminal counts over allegations it drilled faulty gas wells that leaked flammable methane into residential water supplies in Dimock and surrounding communities.
Coterra pleaded no contest to a misdemeanor violation of the state Clean Streams Law. The plea deal with the state attorney general's office requires Coterra to pay more than $16 million to fund construction of a new public water system for Dimock and to pay affected residents' water bills for 75 years.
Attorney General Josh Shapiro, a Democrat who takes office as governor next month, held a celebratory news conference with Kemble and two other Dimock residents on the day Coterra entered its plea.
At the news conference, Shapiro appeared to dodge a reporter's question on whether Coterra would be permitted to resume drilling in the moratorium area, pointing out the administration of Democratic Gov. Tom Wolf remained in charge.
"That's obviously a question for the regulators, not for the attorney general's office," Shapiro said then.
Shapiro's spokesperson said the plea deal was not contingent on the state department's lifting the moratorium.
"Our office plays no role in DEP's regulatory decisions and we do not share confidential information about criminal investigations," Jacklin Rhoads said.
In an interview Friday, Wolf said he was satisfied with his administration's decision to allow Coterra to go back into Dimock, "as long as they do what we need them to do with the new water supply and the pipes." He said the company had to abide by "some pretty stringent guidelines."
Coterra will continue to be prohibited from drilling new gas wells inside the moratorium area. But shale gas drillers such as Coterra are able to drill horizontally for miles until they reach the target, meaning that even though the company will have to start new wells outside of the prohibited area, the gas is easily within reach.
Zacariah Hildenbrand, a Dallas-based biochemist who has conducted testing in Dimock, said that technically speaking, the horizontal portion of a gas well is "orders of magnitude safer" than the vertical portion, from which most incidents of drilling-related water contamination originate.
But he was incredulous that Coterra would want to risk more trouble in Dimock -- and that regulators allowed the drilling -- given the incident proved one of the most high-profile contamination cases to emerge from the U.S. drilling and fracking boom.
"Why even roll the dice for this to happen again? You've already made a colossal mess of this region. It's already been a black eye to the industry," Hildenbrand said. "Why not pick up your tools and go somewhere else?"
The driller has long said the gas in Dimock's water wells was naturally occurring, and over the years, it has periodically requested permission from the state to resume drilling in the community.
In a statement, Coterra spokesperson George Stark said the agreement with the state "resolves longstanding issues and provides for the responsible and safe development of natural resources located inside the nine-square-mile area. It also satisfies the desires of many of the landowners, who communicated their support for such development over the years."
Pennsylvania is the nation's No. 2 gas-producing state after Texas, and Susquehanna County, where Dimock is located, produces more natural gas than any other county in Pennsylvania.
Alan Hall, vice chair of the Susquehanna County Board of Commissioners, said many of his constituents in Dimock had been clamoring for gas production to resume, having leased their land to the gas company long ago.
"They know the gas in that area is very prolific, and there's a lot of it there. And they'd been hoping a resolution would come through, that their leases would be activated again and they'd start being able to get royalties out of the process," he said Monday.
Information for this report was contributed by Marc Levy of The Associated Press.