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The state’s Oil and Gas Commission on Friday denied the appeal of a company at the center of the oilfield waste dumping incident on Salt Springs Road that led to federal charges against the owner and one of his companies, calling the incident the “worst case scenario” of illegal dumping.
The Oil and Gas Commission in their decision rendered Friday re-affirmed the Ohio Department of Natural Resource’s decision to revoke D&L Energy’s six injection well permits and three pending permit applications. The commission noted the permit revocations “basically removed D&L Energy, Inc. from the brine disposal business” in order to protect the state’s water supplies.
D&L Energy has 30 days to appeal the commission’s ruling in Franklin County Common Pleas Court.
D&L and Hardrock Excavating owner Ben Lupo, 62, of Poland, is currently facing federal illegal dumping charges that could land him in prison for up to three years. Lupo has since stepped down as D & L’s president but retained an 81 percent ownership in the companies, according to records. D & L also has filed for bankruptcy.
Lupo at the time told investigators he ordered the oilfield waste dump that eventually made its way into the Mahoning River. Investigators believe he also ordered at least 20 similar dumps down a storm sewer that fed in to a Mahoning River tributary.
The commission noted they normally issue non-compliance citations for various issues surrounding the case, including a complicated web of companies with various permits, names and tasks but all owned by Lupo and headquarter at the Salt Springs road building.
“So the question becomes: was D&L’s participation in the illegal dumping incident of Jan. 31, 2013 so egregious that as to justify removing this company from the disposal business?” the commission’s decision says. “And the answer is: yes.”
The decision says Lupo was solely responsible for the companies’ actions and acted in complete disregard for Ohio law.
The commission said Lupo was acting as both D&L and Hardrock owners at the time because the dump site was shared property with D&L, making D&L complicit in the infraction.
Lupo’s attorneys unsuccessfully argued ODNR unlawfully revoked D&L Energy’s six injection well permits and denied three pending permit applications because D&L is a “sister” company and not a subsidiary or parent company to Hardrock and Mohawk.
They wrote Hardrock would financially benefit from improperly dumping waste because it’s a brine transportation company. But D&L, an injection well company, would receive no financial gain from the dump because the two companies deal with unrelated parts of the oil and gas industry. Attorneys wrote the D&L injection wells were available for the brine to be dumped into legally, showing that Lupo was only acting on Hardrock’s behalf.
A field report by the Ohio Environmental Protection Agency says Lupo told investigators ordering brine dumps into the storm sewer on a “regular basis” and later said it he ordered the dumps at least six times between September and February. He said the brine was “light water” that came from cleaning out frac tanks that stored a variety of fracking fluids.
Lupo said he tried to dispose the water in the Koontz well in Leavittsburg and the Peribeck well in New Lyme but the tanks were full, so he ordered they be dumped into storm drain that flowed into the Mahoning River, the report says.
D & L also is known for owning an injection well that was found to be the cause of 11 earthquakes in late 2011 and early 2012 in the Youngstown area. Those injection wells were shut down by the state. The company was cited for more than 50 violations in Ohio since the 1980s, but ODNR granted Lupo a permit for a new injection well on Jan. 7, according to records obtained by WKBN.COM.
The company has filed for Chapter 11 bankruptcy. Filings say D & L owns assets totaling more than $50 million and expects to make more than $2 million this year. Lupo resigned his position as president of the company the day after he was indicted, but kept an 81 percent ownership in the company filings say. His wife, Holly Serensky Lupo, owns four percent and Susan Faith, of Girard, owns the remaining 15 percent.
Bankruptcy filings also say officials may have improperly diverted funds from D & L to other companies the group owns and operates.