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D&L argues for restoration of permits



Published: Thu, May 23, 2013 @ 12:00 a.m.

By Marc Kovac

news@vindy.com

COLUMBUS

This much is clear: Ben Lupo was affiliated with a handful of companies on Salt Springs Road in Youngstown involved in the oil and gas industry.

And, according to testimony before a state panel Wednesday, there is some agreement that Lupo committed a “stupid, intentional act” when he purportedly directed the dumping of tens of thousands of gallons of oil-field waste into a storm sewer, for which he is facing criminal charges.

But in a hearing in Columbus, legal counsel for a company that lost its injection-well permits as a result of the incident and attorneys for the state argued whether Lupo was representing all of the companies in which he held an ownership interest at the time the brine was illegally discharged into a tributary of the Mahoning River.

D&L Energy says Lupo was acting on his own behalf or in the interest of separate companies, and D&L shouldn’t be penalized for Lupo’s actions. It has asked the Ohio Oil and Gas Commission to vacate revocations issued by the state and allow it to continue to operate its existing injection wells and several more for which it had sought permits.

“Don’t punish D&L Energy for something they didn’t do,” said Michael Cyphert, representing the company.

But legal counsel for the environmental- enforcement section of Attorney General Mike DeWine’s office countered that Lupo was intertwined with D&L Energy, Hardrock Excavating and other businesses, and D&L broke the terms of its operating agreement with the state.

The two sides appeared before the state panel for the first of two days of hearings on D&L’s request to restore its permits. The hearing included opening statements from legal counsel representing D&L and the state, plus the current chief executive officer of the company and the head of the Ohio Department of Natural Resources’ oil and gas regulatory efforts.

The Youngstown dumping incident has caught the attention of industry and environmental advocates, who are keeping close tabs on activity in eastern Ohio’s growing oil fields and the horizontal fracking underway.

Drillers rely on injection wells to dispose of brine and waste fluids that result from fracking.

Earlier this year, the state permanently revoked six existing operating permits and denied three permit applications for D&L Energy and Hardrock Excavating after investigators caught employees dumping tens of thousands of gallons of oil-field waste into a storm sewer.

Much of the permit appeal is based on Lupo’s role with D&L Energy.

Nicholas Paparodis, CEO and president of D&L, said the company is not involved in the transportation of brine for storage or disposal, nor does the company hold an ownership stake in Hardrock or Mohawk Disposal Management LLC.

None of the other officers was aware that brine was being disposed of improperly at the site, he said. Lupo subsequently resigned from his post at D&L after the incident.

Cyphert acknowledged that Lupo directed the brine waste to be dumped, but he said those instructions were given through Hardrock Excavating, not D&L.

“Ben Lupo wore many hats,” he said. “It is true at the time that he instructed the Hardrock employee [to dump the oil-field waste], he was also an officer with D&L Energy. ... The real questions before this commission is who is Ben Lupo acting on behalf of if he was in fact an employee, an officer, a manager, of several companies?”

He added, “Ben Lupo’s a bad person. He intentionally directed someone to put brine down a sewer. He shouldn’t have done that. But are those actions to be imputed to D&L Energy simply because he’s an officer of the company or was an officer at the time?”

Testimony is expected to continue today.


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