Chesapeake Energy 2012 Annual Report Download - page 29

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applicable laws, regulations or guidance may eventually be adopted with respect to our operations or the ultimate cost
to comply with such requirements.
Hazardous Substances and Waste
Federal and state laws, in particular the Federal Resource Conservation and Recovery Act, or RCRA, regulate
hazardous and non-hazardous solid wastes. In the course of our operations, we generate petroleum hydrocarbon
wastes such as produced water and ordinary industrial wastes. Under a longstanding legal framework, certain of these
wastes are not subject to federal regulations governing hazardous wastes, although they are regulated under other
federal and state waste laws.
Federal, state and local laws may also require us to remove or remediate previously disposed wastes or hazardous
substances otherwise released into the environment, including wastes or hazardous substances disposed of or released
by us or prior owners or operators in accordance with current laws or otherwise, to suspend or cease operations at
contaminated areas, or to perform remedial well plugging operations or response actions to reduce the risk of future
contamination. Federal laws, including the Comprehensive Environmental Response, Compensation, and Liability Act,
or CERCLA, and analogous state laws impose joint and several liability, without regard to fault or legality of the original
conduct, on classes of persons who are considered responsible for releases of a hazardous substance into the
environment. These persons include the owner or operator of the site where the release occurred and persons that
disposed of or arranged for the disposal of hazardous substances at the site. CERCLA and analogous state laws also
authorize the EPA, state environmental agencies and, in some cases, third parties to take action to prevent or respond
to threats to human health or the environment and to seek to recover from responsible classes of persons the costs
of such actions.
Air Emissions
Our operations are subject to the federal Clean Air Act (CAA) and comparable state laws and regulations. These
laws and regulations regulate emissions of air pollutants from various industrial sources, including our compressor
stations, and impose various monitoring and reporting requirements. Permits and related compliance obligations under
the CAA, each state's development and promulgation of regulatory programs to comport with Federal requirements,
as well as changes to state implementation plans for controlling air emissions in regional non-attainment or near-non-
attainment areas, may require natural gas and oil exploration and production operators to incur future capital
expenditures in connection with the addition or modification of existing air emission control equipment and strategies.
In 2012, the EPA published final New Source Performance Standards (NSPS) and National Emissions Standards
for Hazardous Air Pollutants (NESHAP) that amended the existing NSPS and NESHAP standards for oil and gas
facilities and created new NSPS standards for oil and gas production, transmission and distribution facilities. While
these rules remain in effect, the Agency has announced that it will reexamine and reissue the rules over the next three
years. In 2010, the EPA published rules that require monitoring and reporting of greenhouse gas emissions from
petroleum and natural gas systems. We, along with other industry groups, filed suit challenging certain provisions of
the rules and are engaged in settlement negotiations to amend and correct the rules. The EPA is also conducting a
review of the National Ambient Air Quality Standards (NAAQS) for ozone that is expected to be completed in 2013.
Water Discharges
The Federal Water Pollution Control Act, or the Clean Water Act (CWA), and analogous state laws impose
restrictions and strict controls regarding the discharge of pollutants into state waters as well as waters of the U.S. The
placement of material into jurisdictional water or wetlands of the U.S. is prohibited, except in accordance with the terms
of a permit issued by the United States Army Corps of Engineers. The discharge of pollutants into regulated waters is
prohibited, except in accordance with the terms of a permit issued by the EPA or a state agency delegated with EPA's
authority. Further, Chesapeake's corporate policy prohibits discharge of produced water to surface waters. See Item
3. Legal Proceedings for a description of penalties paid by us recently in connection with CWA misdemeanor violations
at a road construction site in West Virginia, as well as pending EPA orders for compliance under the CWA related to
well pad and pond sites in West Virginia. Spill prevention, control and countermeasure requirements of federal laws
require appropriate containment berms and similar structures to help prevent the contamination of regulated waters
in the event of a hydrocarbon tank spill, rupture or leak. In addition, the CWA and analogous state laws require individual
permits or coverage under general permits for discharges of storm water runoff from certain types of facilities.