MARCELLUS SHALE:

Wastewater disposal concerns persist despite rise in reuse

Fresh data from Marcellus Shale drillers show that despite doubling oil and gas production over the past year, industry has curbed a parallel rise in waste.

Wastewater volumes jumped by 26 percent since 2011, according to new data from the Pennsylvania Department of Environmental Protection. But that is a relatively controlled rise considering the region's surging natural gas production, and it's enough to prompt some claims that the industry has an entirely smaller environmental footprint with its improved handling of water.

During the first half of 2012, companies reported a total of 12.1 million barrels of drilling fluid, frac fluid and produced fluid generated from unconventional wells in Pennsylvania, up from 9.6 million barrels in the same period last year.

Meanwhile, drillers using horizontal drilling and hydraulic fracturing in Keystone State shale brought up almost 900 billion cubic feet of gas between January and June this year, up from 2011's midyear weigh-in of 435 billion cubic feet -- despite the fact that a natural gas glut has pushed prices to 10-year lows.

Now concerns over water quality and drought have put a spotlight not only on the high volumes of water used with every puncture of the ground, but also on how drillers dispose of what the wells spit back.

A single fractured well can require 4 million gallons of chemical-laced water that cannot directly re-enter the public water supply safely. That’s a fraction of the water used by agriculture and other industries, but an increase over water demands of traditional wells. Frac fluid churns up particles deep in the ground, bringing a more hazardous mix to the surface that can include sodium, chloride and arsenic compounds and naturally occurring radioactive material.

"There remain a dearth of desirable options for the really high waste stream," said Natural Resources Defense Council attorney Kate Sinding, especially as drilling wastewater is exempt from federal hazardous waste management requirements.

As the policy, economics and perception of wastewater disposal evolve, drillers are hopeful that reuse serves as that sought-after solution that wins nods from critics and regulators, without throwing off companies' bottom lines.

Reduce, reuse, recycle?

Reuse is indeed the most common path for wastewater, and it is an option many industry and environmental advocates see as the most palatable. Last year, companies in Pennsylvania reported reusing about half of their wastewater. By the first half of this year, that rate had risen to 76 percent.

"They may see it as cheaper in the short run to simply truck in 100 percent of their water and truck it out," said NRDC attorney Thom Cmar. "But there's a strong economic case to be made that recycled wastewater is in the industry's interest."

Previously, Marcellus drillers would send tens of thousands of gallons of wastewater to public sewage treatment plants. In the first half of 2011, they shipped 47,000 barrels to be treated and then discharged into waterways. But in April of last year, DEP Secretary Michael Krancer ordered a stop to the practice. The volume sunk to 408 barrels in the second half of 2011 and none this year.

At the time of Krancer's order, the Pennsylvania Independent Oil and Gas Association had said the limitation would be a burden on gas companies and make wastewater disposal too expensive. Instead, reuse rates have climbed, requiring some initial investment for wastewater treatment operations but ultimately providing industry with a reliable cycle of usable fluid. The Marcellus Shale Coalition, which represents the shale play's major operators, was supportive of the order.

Unconventional drillers in Pennsylvania have reused or recycled about 11 million barrels of wastewater so far this year, a statistic industry officials use to tout their effective resource management.

"It means now that we can produce these abundant quantities of natural gas that we're seeing, but we're able to do so in a way that minimizes its impact on the environment," said John Krohn, spokesman for Energy in Depth, an industry group run by the Independent Petroleum Association of America.

Krohn added that the shift to wastewater reuse was "brought into maturity" in Pennsylvania and sets an example for drillers in the rest of the country.

When drought conditions scorched the nation this year, for example, Marcellus representatives pointed to their robust reuse practices as a saving grace from any material effect on production levels.

"Just a few short years ago, water reuse and recycling technology was an idea," Marcellus Shale Coalition spokesman Patrick Creighton said in an email. "Today, Pennsylvania's Marcellus Shale producers are reusing more than 90 percent of flowback water."

The data confirm that statement -- with some slight qualifications. Reuse rates are up, but recycled water rates have fluctuated up and down. Recycling is classified differently, as it must be treated at a centralized plant. That category this year accounted for 14 percent of waste, down from 38 percent in the same period last year.

But taken together, recycled and reused volumes accounted for a steady 90 percent of wastewater disposal both last year and this year. In real terms, that is 8.6 million barrels in the first half of last year, up to 10.9 million so far this year.

Is that enough?

Critics say advances in wastewater reuse do not tell the whole story. NRDC's Sinding says wastewater reuse and recycling may not be as resource-friendly as they sound. She argues that the industry must account for the energy-intensive processes needed to treat water for recycling, in which facilities remove organic contaminants and inorganic constituents that can taint a well.

"We need much more disclosure from the companies [about] technologies, energy needs, waste products and what methodologies exist to manage those," she told EnergyWire last week. "There are still question marks about that."

From industry's perspective, that is a reach. Krohn, of Energy in Depth, countered that such arguments are not always as dire as they seem. Industry has not crunched the numbers on how much power is used in the treatment process, as that is often done by contractors, but he suspects it is more than counterbalanced by the savings in water.

Plus, he pointed out, natural gas contributes to the power grid in Pennsylvania, making the energy used in the treatment process cleaner than if it were entirely dependent on dirtier fossil fuels.

"To the extent that that energy is coming from [natural gas sources]," he said, "there is not a negative externality associated with that increased wastewater treatment."

Another concern of environmentalists: What happens to the contaminants removed from wastewater during treatment for reuse? Those residuals must be disposed of, and that is often done via landfill, another disposal method that has increased significantly since last year.

In the first half of 2011, drillers sent 19,000 barrels of residuals, often in solid or sludge form, to landfills. That number dropped to 7,600 barrels in the second half of 2011 and shot up to 83,600 barrels in the first six months of 2012. Though those numbers represent a mere fraction of wastewater disposal management, environmental advocates have expressed concern over the high levels of sometimes toxic chemicals.

"Since chemicals in these residual wastes are present at higher concentrations than in the original produced waters, careful management is essential to avoid undermining the value of the treatment process through release of residuals to the environment," NRDC researchers wrote in a May report on wastewater.

Shipping wastewater to Ohio

Wastewater that is not reused or recycled most often ends up injected in disposal wells for underground storage -- a method preferred by some states, but scrutinized for links to man-made earthquakes and the dangerous consequences if a well is constructed shoddily.

For permanent underground storage, fluids are shot down Class II injection wells, which are less regulated than Class I wells and more of a fright to environmentalists who worry about industry cutting corners or state regulators overlooking problems.

Unconventional drillers in Pennsylvania reported sending 8 percent of their wastewater to disposal wells for injection this year. That is compared with 5 percent in the first half of last year and 16 percent in the second half, following the Pennsylvania order for drillers to cease sending wastewater to public sewage treatment plants.

The Keystone State has only a handful of operating disposal wells and instead opts to send much of its waste to Ohio, which each year takes on millions of barrels of wastewater produced from unconventional wells throughout the region. The effect of Krancer's order can be seen in Ohio numbers, which show a dramatic upswing in out-of-state wastewater received between the first and second half of 2011: 2.7 million barrels at the beginning of the year and 4.1 million in the latter part.

According to the Ohio Department of Natural Resources (DNR), 3.3 million barrels of brine from out-of-state producers were injected into Ohio disposal wells in the first half of this year, although numbers are still coming in for the second quarter.

In all of last year, Ohio disposal wells took in 12.5 million barrels of fluid -- from both local and out-of-state producers.

"This year's total is on target to meet or exceed last year's," DNR spokeswoman Heidi Hetzel-Evans wrote in an email, adding that after 2011's big jump in out-of-state waste, the volumes have settled into a steady rise.

As industry focuses on wet gas operations in the Utica Shale, Ohio recently moved to strengthen its disposal well standards. Under the new rules, Ohio DNR can order seismicity tests before a well is drilled and specify the volume and pressure of fluids injected. The agency can also force a well to shut off if monitors show risky conditions (EnergyWire, July 12).

The standards came after public concern surged following injection-related earthquakes in Youngstown, Ohio, in late 2011. But environmentalists say the rules are still missing the mark because they merely give DNR the authority to carry out seismicity tests, rather than requiring tests for each well.

"There are certain safeguards that need to be in place at every single well, and not up to the discretion of the department or an individual permit writer" said NRDC's Cmar, who is based in Chicago but grew up in Ohio.

Even if current Ohio regulators are directly addressing underground injection, future leaders could have different priorities, Cmar said, "and it could very easily fall by the wayside."

The environmental group has recommended that U.S. EPA update its underground injection control standards or that the agency or Congress eliminate the decades-old Resource Conservation and Recovery Act exemption for oil and gas wastes, in which EPA determined the industry produced "special wastes ... lower in toxicity than other wastes being regulated as hazardous waste."

In the meantime, environmentalists are pushing for stricter state regulation that would include increased monitoring of disposal well siting and pressure.

"From cradle to grave, this waste is not being treated the way it should," Cmar said. "And that is the source of a lot of the real, observable impacts from drilling."

But industry maintains that the legwork on better wastewater management has been done, and the only prevailing task is to mold skeptics' perception.

"This is a win-win for the environment and the economy," Creighton said.

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