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OIL EXPLORATION FIRM TO PAY $1.2 MILLION

Washington, D.C. - HS Resources, an oil and gas exploration company, will pay a $700,000 penalty and spend another $500,000 to buy and preserve wetlands in southern Louisiana to settle claims that it illegally destroyed 20 acres of wetlands. The penalty is the largest of its kind ever imposed in Louisiana.

A settlement filed today in federal court in Lake Charles, La., requires HS Resources to spend $500,000 acquiring wetlands habitat in the Calcasieu River watershed and convey this land to the Nature Conservancy, a nonprofit organization, for preservation.

Between 1997 and 1999, San Francisco-based HS Resources carried out drilling and construction that destroyed wetlands at 10 different sites in Louisiana, without notifying the Army Corps of Engineers. Section 404 of the Clean Water Act obligates builders to secure a permit from the Corps before they dredge or fill wetlands. The penalty to be paid by HS Resources recaptures the economic benefit that the company initially enjoyed by failing to comply with the law.

"Companies cannot ignore their duty to protect wetlands as they pursue their economic interests," said Lois Schiffer, the Assistant Attorney General for the Environment at the Justice Department. "It is particularly important for companies to disclose their plans that affect wetlands when they work in remote areas, as in the case here. We will continue to find -- and prosecute -- those who break the law and illegally destroy wetlands."

The land to be preserved under the settlement includes long-leaf pine savanna, a once-widespread ecosystem in the Southeast. About 98 percent of this ecosystem has been altered or destroyed in the United States, and the Nature Conservancy has identified this type of habitat as one its highest priorities for conservation in Louisiana.

"Wetlands are vital as nurseries for many species of fish, shellfish and shrimp which spend their adult lives in the open ocean," said U.S. Environmental Protection Agency Regional Administrator Gregg Cooke. "Wetlands also act as sponges, providing important flood control and hurricane protection for inland development. EPA will continue to work with the Corps to ensure that these critical resources remain intact for future generations."

Today's agreement requires HS Resources to apply to the Corps, within two weeks, for an after-the-fact permit for its prior drilling activities. If the Corps decides to issue a permit, it would require HS Resources to mitigate the environmental effects of its past drilling, and these requirements would be enforceable by the court under today's settlement. If the Corps denies the permit, the United States retains the right to seek environmental restoration of the sites where HS Resources drilled.

To become effective, today's settlement must be signed by a federal judge. Meanwhile, the public will have 30 days to comment on the settlement after notice of the agreement is published in the Federal Register, which is expected in about a week.

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