Pa. Marcellus Wastewater Industry Restructuring, Painfully - Business, Government Legal News from throughout WV

Pa. Marcellus Wastewater Industry Restructuring, Painfully

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The emerging industry for treating and disposing of Marcellus wastewater has undergone a painful restructuring in Pennsylvania since April.

That's when environmental regulators asked drillers to voluntarily stop using conventional wastewater treatment plants.

"It's been a very powerful transformation of the water disposal and water processing industry during the last six months," said Paul Hart, president of Hart Resource Technologies, which operates three treatment facilities to the east and north of Pittsburgh.

In West Virginia, companies drilling for natural gas in the Marcellus shale have been able to use underground injection wells for ultimate disposal of their wastewater.

Pennsylvania's geology is not conducive to underground injection, though. Some haul to Ohio for underground injection. But since transporting water very far is uneconomical, the Marcellus industry in most of the state needs access to some treatment.

The rocky regulatory process of figuring out how that treatment can be provided without damaging waterways has left Pennsylvania Brine and other treatment providers bruised.

New Waste Stream

Salty waste fluids associated with the extraction of gas from the Marcellus shale — flowback from hydraulic fracturing, mostly, as well as produced water that comes up with the gas — became a significant waste stream within a few years after the industry started up in 2005.

The salts, known in water quality lingo as total dissolved solids, or TDS, can run to the many tens of thousands of milligrams per liter, much saltier than sea water. Standard public and private wastewater treatment technology only dilutes the salts and discharges them to waterways.

A salty episode in the Monongahela River in late 2008 got the attention of regulators in West Virginia and Pennsylvania.

In West Virginia, the Department of Environmental Protection responded by setting a high bar in August 2009 for treatment facilities. The small amount of treatment for discharge that was taking place simply shifted to underground injection disposal.

The Pennsylvania Department of Environmental Protection, after much research and public input, implemented a standard in August 2010 of 500 milligrams per liter of TDS as an average monthly limit in discharges of treated gas industry wastewater.

At least 18 public and private treatment facilities, Hart's included, were grandfathered at previously allowed discharge levels.

That seemed to establish the new regime. Hart's business, which had been built since 1985 around treating wastewater from conventional gas and oil wells and which discharged to waterways, now could feel comfortable offering treatment for the larger stream of wastewater from unconventional gas wells.

Turnabout

But the detection soon after in some western Pennsylvania rivers of bromide, one of the dissolved solids and a precursor to a cancer-causing compound, led to PADEP's April call for drillers to find new ways to treat and dispose of their wastewater.

For the grandfathered treatment facilities, it was a reversal that changed everything.

"We have had anywhere from a 60- to 70-percent cut in the amount of water we receive and process," said Hart.

The new, unofficial policy finished treatment for discharge.

Back in 2009, as the state considered TDS regulation, Hart said, 24 facilities treated and disposed of gas industry wastewater in Pennsylvania. Many of those were publicly owned treatment plants that had taken on gas industry wastewater for additional revenue but were primarily dedicated to residential and commercial wastewater.

At the end of 2010, after the TDS regulations but before the PADEP's turnabout, 18 grandfathered facilities offered treatment and disposal, he continued. Some of these were public plants; some, like Hart's, were private plants focused solely on the gas industry. Two facilities also had started up to recycle Marcellus wastewater, treating it partially for re-use by the industry.

Now, he said, six months after, although the grandfathering remains in place, only one facility is truly sanctioned by the state for gas industry wastewater treatment and discharge: Eureka Resources in Williamsport, which produces distilled water.

And PADEP lists three facilities conducting recycling.

Recycling

Recyclers have benefited from the policy switch.

One of those recyclers, Reserved Environmental Services at Mount Pleasant southeast of Pittsburgh, opened at a fortuitous time: April 2010, just as PADEP was discouraging treatment for discharge.

RES precipitates mud and metals using a chemical precipitation process, then filters the fluid to make it clear and chlorinates to kill bacteria, according to President Andy Kicinski. It does not remove salts, but it's not a problem because all of its fluid is returned to the field for dilution and re-use.

The facility has a capacity of a million gallons per day and so far handles about 400,000 gpd. RES charges between $3 to $5.50 per barrel for its serves.

The company also has begun providing clean water purchased from the Westmoreland County Municipal Authority to the field.

Kicinski expects volume to remain steady at this location for now because of the low prices gas producers are getting for their product. But he intends to build three more facilities to serve gas fields in other parts of the state.

Fallout

Although Hart's and other facilities remain grandfathered for Marcellus wastewater for the time being, PADEP's request of drillers all but stopped the business.

Hart acknowledges that the Marcellus industry already was moving toward recycling its hydraulic fracturing flowback, either through simple dilution or with treatment and dilution, when the PADEP changed its tune, and that some companies already were using underground injection disposal in Ohio.

Yet, he expresses frustration.

"I have a valid permit. I've operated my business compliantly. I'm legally allowed to take the water," he said.

"But this has been a very politically charged environment," he continued. "When Marcellus was started, most of the producers were independent. Most producers now are publicly traded. They don't want to be viewed in opposition to the state. Basically, political pressure was applied on these producers to stop bringing water to us."

Hart said he has closed his business to any Marcellus producers who might overcome that pressure while he adjusts his equipment and processes to the new regime.

 

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