Seven years after residents of the small, low-income Butler County community called the Woodlands became convinced that Rex Energy’s shale drilling had ruined their water wells, the company spent $159,000 to settle their claims.
State College-based Rex Energy Corp. paid the money in April to end lawsuits brought by nine Woodlands families in Connoquenessing Township who said they watched as their water turned black or orange or stopped flowing altogether right around the time that Rex was ramping up its drilling and fracking in the area.
As with nearly all such settlements, both the amounts and the details of the cases were kept under wraps by strict nondisclosure clauses. But when Rex filed for bankruptcy in May, it had to disclose all of its spending for more than a year preceding the filing.
In those documents, Rex revealed that it paid the Woodlands families between $16,250 and $27,125 each.
The company issued a statement Monday, saying, “While we cannot comment on the settlement, Rex Energy continues to deny any wrongdoing related to this matter.”
Janet and Fred McIntyre, who for years were the most public faces of the water situation in their community, received $20,000.
For Sheri Peacemaker, that would cover the cost of water delivery for about eight years. The Woodlands resident spends $200 a month to have the volunteer fire department haul water to her buffalo every two weeks. She used to get water from the White Oak Springs Presbyterian Church in Renfrew, where donations funded the distribution of water for dozens of families in the area.
Ms. Peacemaker was not part of the lawsuits or the settlements — she didn’t know anything about them and had just learned that her neighbors were involved. With three kids in the house, her well — which she said always had problems but had all but stopped producing water after Rex’s drilling began — can’t support the needs of the house.
She has thought about moving, but “you can’t sell a house without water. So I’m kind of stuck.”
The number of so-called nuisance lawsuits — where plaintiffs say oil and gas development has impaired their enjoyment of their property — is on the rise in West Virginia, according to an annual litigation report produced by Downtown-based law firm Babst Calland.
In Pennsylvania, such lawsuits have been declining for several years.
Very few become public and the exceptions often reveal more about the amounts paid than about the actual situation on the ground.
It took two years to unseal a 2011 settlement between the Hallowich family in Washington County and Range Resources Corp. and two midstream firms, showing the plaintiffs were paid $750,000.
A long-running lawsuit against Cabot Oil & Gas for the alleged contamination of water wells in Dimock in 2009 was the rare case to make it to trial.
While dozens of families initially sued the company, all but two signed settlements with nondisclosure clauses in the end. The two plaintiffs who remained were awarded $4.24 million by a jury, but the trial judge last year said the amount wasn’t commensurate with the evidence and ordered the landowners and Cabot to seek a settlement or prepare for a new trial.
They settled for an undisclosed amount in September and are bound by a nondisclosure clause.
John Stolz, a Duquesne University professor of environmental microbiology who has been studying and championing the water quality issue in the Woodlands, said he was enlisted as an expert witness in the cases filed against Rex.
He never got deposed because of the settlements, and anything he saw while reviewing case materials is now obscured by a confidentiality agreement.
“That’s the frustrating thing,” Mr. Stolz said. “My concern, as a scientist, … is that this all goes away.”
Oil and gas representatives frequently repeat some version of “there’s never been a documented case of water contamination from fracking.”
The cycle of allegations, settlements and gag orders allows for that plausible deniability, Mr. Stolz said.
Mr. Stolz and his team canvassed the Woodlands in 2011 after residents began complaining about their water quality. He said around 50 families reported changes to their wells then.
In the years since, water tests done by Rex and environmental regulators showed no impacts from drilling. Mr. Stolz cautioned that one-time samples wouldn’t tell the story, as water quality and quantity can vary day to day.
Mr. Stolz’s recent water quality tests show that at least one well at the Woodlands has returned to pre-drilling conditions. “Overall, the water wasn’t bad,” he said.
The McIntyres are doing well, Mr. Stolz said, and the settlement money will help the families but, “It doesn’t get your life back. It doesn’t get your health back. It doesn’t get your hours of angst back.”
Rex’s financial disclosures also indicate the company paid a Zelienople couple $139,000 to settle their water contamination claim in 2017.
Rex is in the process of preparing for an auction of all of its assets. It is inviting bids by July 26. If it receives more than one qualified bid, the company will hold an auction in New York on Aug. 16.
A sale would still need the approval of the bankruptcy judge.
Anya Litvak: alitvak@post-gazette.com or 412-263-1455.
First Published: July 10, 2018, 12:30 p.m.