Halliburton fined $1.8 million over disposal

Company misstated amount of waste reported to state

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In one of the largest penalties leveled against an oil and gas service company in Pennsylvania's history, the Department of Environmental Protection fined Halliburton Energy Services $1.8 million for transporting, processing and disposing of hydrochloric acid without classifying it as a hazardous substance.

Over a period of 12 years, Halliburton didn't keep records of how much acid it moved, making it difficult to account for all potential infractions, but the DEP counted 255 violations between 1999 and 2011.

Halliburton, the Houston-based energy service firm that helps oil and gas operators frack and cement wells, operated a facility in Homer City where it stored, among other things, unused hydrochloric acid hauled from well sites. The company would treat the acid with lime to neutralize it, according to DEP spokesman John Poister, and then would send the resulting liquid waste to other facilities. Mr. Poister said some acid was not properly neutralized and was sent to facilities that were not permitted to accept such waste.

One of the recipients of the waste, formerly called Hart Resource Technologies in Creekside, helped the DEP recreate a timeline of waste that came from the Halliburton facility. In exchange for cooperating, Hart was not cited for accepting the waste.

Halliburton declined to answer questions on Tuesday. It issued a statement confirming it reached an agreement with the DEP and said it's cooperating with the agency.

"Halliburton joins with the department in observing that there is no evidence that these past practices resulted in harm to the public or the environment," the statement said.

According to the DEP's online records, solid waste inspections at the Indiana County facility began in 2009 and that year several violations were discovered, including unlawfully "dumping solid waste," storing waste in a manner that doesn't protect groundwater degradation and operating a disposal or processing facility without a permit.

The 2010 inspection found no violations and the 2011 visit cited the company for not labeling storage containers properly and not keeping records.

Halliburton had long asserted that it was exempt from provisions of the state's Solid Waste Management Act because of a federal exemption for oil and gas companies that handle less then 220 pounds of waste per month, Mr. Poister said.

The exemption allows operators to handle small amounts of hazardous material without classifying it as such or seeking permits.

Because Halliburton identified itself as an exempt facility, the DEP didn't give it the same attention that it would a large operator.

"It was a relatively low-priority place," Mr. Poister said.

A solid waste inspector who tagged along on an evaluation of the Homer City facility with a clean water inspector in 2010 raised questions about the volume of waste being processed there. In 2011, that hunch led the DEP to investigate and eventually the agency determined that Halliburton was, in fact, a large-quantity facility, meaning it was processing 2,220 pounds of waste monthly, or 10 times the limit of exempt facilities.

If the DEP were conducting an inspection of a larger operation, it would have asked for records and truck signage indicating proper labeling of hazardous waste. But Halliburton didn't keep records and the DEP didn't ask for them until it began its investigation.

"That's the regulatory conundrum," Mr. Poister said. "We all want to be everywhere at once, but realistically we can't.

"We don't have eyes and ears in every company. The consequence of not following the regulations is exactly what happened. They get a big fine."

The magnitude of fine and the fact that the DEP went back 12 years to look for violations is "outrageous," said Ken Komoroski, and oil and gas attorney with Morgan, Lewis & Bockius LLP.

Disagreements between the DEP and waste handlers aren't uncommon, he said. Typically, when the agency disagrees over an exemption, the operator might agree to change record keeping requirements or pay a small fine.

"It happens, but it never goes to a $1.8 million penalty," he said. "To be a large-quantity generator triggers some additional requirements but it doesn't change the environmental outcomes."

The Homer City facility remains operational, Mr. Poister said, but the company told the DEP it stopped accepting hydrochloric acid from well sites. However, it is still permitted to store new acid at the facility and transport it to well sites, because that qualifies as a product, not as waste.

Anya Litvak: alitvak@post-gazette.com or 412-263-1455. First Published February 18, 2014 1:29 PM

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