The Associated Press October 18, 2011, 6:42PM ET

Gas company asks to resume drilling in Dimock, Pa.

An energy company has asked to resume natural-gas drilling in a northeastern Pennsylvania town where 18 residential water wells were polluted with methane gas and possibly other contaminants.

Cabot Oil & Gas Corp. asked the Pennsylvania Department of Environmental Protection on Monday to allow it to resume operations in Dimock, Susquehanna County. Cabot's letter to DEP, released by the agency on Tuesday, said the Houston-based company believes it is in compliance with the terms of a December 2010 settlement agreement that required it to remove methane from the residents' water.

State regulators have said Cabot drilled faulty wells that leaked methane in the community's aquifer. The company denies responsibility, but it has been banned from drilling in a 9-square-mile area of Dimock since April 2010.

In its letter to DEP, Cabot asserted Dimock's water is clean and said it wants to stop delivering temporary water to affected residents.

"Cabot now requests that the temporary potable water be discontinued for all residents as the groundwater meets all applicable DEP requirements and there is no valid technical reason to continue providing the water," wrote Phillip Stalnaker, a Cabot vice president.

DEP spokeswoman Katherine Gresh had no immediate comment Tuesday on Cabot's request but has previously said the agency is not under a deadline to respond.

After finding that Cabot failed to live up to the terms of two previous agreements to fix Cabot's water, DEP announced in September 2010 that it would force the company to pay nearly $12 million to connect the homes to a municipal water line. Opposition from Cabot and many other residents and local elected officials, who viewed the water line as a boondoggle, forced DEP to scuttle the plan.

Instead, DEP struck a bargain with Cabot in December under which the company would pay each of the affected residents twice the value of their homes, a total of $4.1 million, and provide a treatment system to remediate the gas. A half-dozen treatment systems have been installed and Cabot said they are effective at removing methane.

But residents who filed a federal lawsuit against Cabot are appealing the December settlement. None of them have taken the money or a treatment system.

Resident Craig Sautner said Tuesday that he will fight to make Cabot continue delivering replacement water.

"They have to restore my water, and they haven't done it," he said. "We appealed the consent order, so how can they resume drilling? That's not a done deal. If we have to fight the DEP, then we'll fight them, too."

DEP also raised questions in May about the integrity of several of Cabot's existing gas wells, saying they continued to leak methane, indicating faulty construction. In its letter Monday, Cabot said DEP had misinterpreted state regulations dealing with well integrity.


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