Chesapeake Energy 1998 Annual Report Download - page 31

Company has utilized operating and disposal practices that were standard in the industry at the time, hydrocarbons
or other wastes may have been disposed of or released on or under the properties owned or leased by the Company
or on or under other locations where such wastes have been taken for disposal. In addition, many of these
properties have been operated by third parties whose treatment and disposal or release of hydrocarbons or other
wastes was not under the Company's control. State and federal laws applicable to oil and natural gas wastes and
properties have gradually become more strict. Under such laws, the Company could be required to remove or
remediate previously disposed wastes (including wastes disposed of or released by prior owners or operators) or
property contaminatiàn (including groundwater contamination) or to perform remedial plugging operations to
prevent future contamination.
The Company generates wastes, including hazardous wastes, that are subject to the federal Resource
Conservation and Recovery Act ("RCRA") and comparable state statutes. The EPA and various state agencies have
limited the disposal options for certain hazardous and nonhazardous wastes and are considering the adoption of
stricter disposal standards for nonhazardous wastes. Furthermore, certain wastes generated by the Company's oil
and natural gas operations that are currently exempt from treatment as hazardous wastes may in the future be
designated as hazardous wastes, and therefore be subject to considerably more rigorous and costly operating and
disposal requirements.
Superfund. The Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), also
known as the "Superfund" law, imposes liability, without regard to fault or the legality of the original conduct, on
certain classes of persons with respect to the release of a "hazardous substance" into the environment. These
persons include the owner and operator of a site and persons that disposed of or arranged for the disposal of the
hazardous substances found at a site. CERCLA also authorizes the EPA and, in some cases, third parties to take
actions in response to threats to the public health or the environment and to seek to recover from responsible classes
of persons the costs of such action. In the course of its operations, the Company may have generated and may
generate wastes that fall within CERCLA's defmition of "hazardous substances". The Company may also be or
have been an owner of sites on which "hazardous substances" have been released. The Company may be
responsible under CERCLA for all or part of the costs to clean up sites at which such wastes have been released. To
date, however, neither the Company nor, to its knowledge, its predecessors or successors have been named a
potentially responsible party under CERCLA or similar state superfund laws affecting property owned or leased by
the Company.
Air Emissions. The operations of the Company are subject to local, state and federal regulations for the control
of emissions of air pollution. Legal and regulatory requirements in this area are increasing, and there can be no
assurance that significant costs and liabilities will not be incurred in the future as a result of new regulatory
developments. In particular, regulations promulgated under the Clean Air Act Amendments of 1990 may impose
additional compliance requirements that could affect the Company's operations. However, it is impossible to predict
accurately the effect, if any, of the Clean Air Act Amendments on the Company at this time. The Company may in
the future be subject to civil or administrative enforcement actions for failure to comply strictly with air regulations
or permits. These enforcement actions are generally resolved by payment of monetary fmes and correction of any
identified deficiencies. Alternatively, regulatory agencies could require the Company to forego construction or
operation of certain air emission sources.
OSHA. The Company is subject to the requirements of the federal Occupational Safety and Health Act
("OSHA") and comparable state statutes. The OSHA hazard communication standard, the EPA community right-to-
know regulations under Title III of the federal Superfund Amendment and Reauthorization Act and similar state
statutes require the Company to organize information about hazardous materials used, released or produced in its
operations. Certain of this information must be provided to employees, state and local governmental authorities and
local citizens. The Company is also subject to the requirements and reporting set forth in OSHA workplace
standards. The Company provides safety training and personal protective equipment to its employees.
OPA and Clean Water Act. Federal regulations require certain owners or operators of facilities that store or
otherwise handle oil, such as the Company, to prepare and implement spill prevention control plans, countermeasure
11