Records bid ends in Ohio dumping case

COLUMBUS An environmental group’s public records case against state regulators has ended in a settlement agreement, with Ohio turning over documents related to the alleged illegal dumping of oil and gas drilling wastewater in northeast Ohio and paying a fine.

The Ohio Supreme Court on Tuesday dismissed the Sierra Club’s case against the state Department of Natural Resources in the wake of the deal. The department paid $2,500 in attorneys’ fees and penalties and produced the records the Sierra Club’s Ohio chapter was seeking related to the department’s investigation of D&L Energy and Hardrock Excavating LLC in Youngstown.

The Natural Resources Department revoked the companies permits in February amid a federal investigation into the dumping of up to 40,000 gallons of wastewater from hydraulic fracturing into a storm sewer that drains into the Mahoning River.

The Sierra Club alleged in a lawsuit filed in September that the state failed to produce public records it had requested six months earlier. The groups attorney, Richard Sahli, said Tuesday that the club received the documents not long after the legal action was taken; they contained few new details.

A spokeswoman for the Natural Resources Department declined to comment.

The investigation continues into allegations that Hardrock’s then-owner, Benedict W. Lupo of Poland, directed an employee to discharge thousands of gallons of drilling mud and brine into a sewer that empties into the Mahoning River watershed, a violation of the Clean Water Act. Such wastewater is supposed to be placed in an underground well piped deep into the earth.

The Hardrock employee, Michael P. Guesman, 34, of Cortland, pleaded guilty in U.S. District Court in Cleveland on Aug. 29 to his role in the dumping. His sentencing has been set for Jan. 24 in Cleveland federal court. He is expected to cooperate with authorities in testimony against his former boss.

Lupo, a former principal in both D&L and Hardrock, has pleaded not guilty to the Clean Water Act violation. He is facing federal criminal charges in the case, but no trial date has been scheduled.

Violations of the federal Clean Water Act could carry a three-year prison sentence, along with a year of supervised release and a fine of $50,000 per day of violation up to $250,000. The company could face up to five years of probation and the same potential fine.

The men were charged after investigators from the Ohio Department of Natural Resources agents acted on a tip and arrived Jan. 31 at the Salt Springs Road facility to witness two people using a hose to dispose of liquid from a frac tank into the storm sewer before they drove away in a truck labeled “Mohawk.”

Cleanup costing hundreds of thousands of dollars went on for weeks following the incident with some of the bill covered by D&L Energy, contributing largely to D&L’s Chapter 11 bankruptcy filing in April.

Resource Land Holdings LLC of Colorado Springs, Colo., purchased its assets for $20.7 million in November through a federal bankruptcy court auction. Under the deal, the Colorado corporation did not assume any D&L liabilities.

Court filings indicate the assets purchase included D&L’s interests in joint ventures, pipeline agreements, operating agreements, lease inventories, real estate, equipment, subsidiaries and three of four disposal well operations. A fourth disposal well not one at the epicenter of a series of earthquakes in the Youngstown area around the eve of 2012 was to be purchased separately for $4 million.

According to published reports, D&L held more than 30,000 acres in the Marcellus and Upper Devonian shale regions of eastern Ohio and western Pennsylvania.