Pennsylvania fracking water being disposed in Ohio

| Tuesday, July 5, 2011

Pennsylvania's waste is becoming Ohio's million-dollar treasure.

Marcellus shale drillers are shipping more fracking waste to the Buckeye State, on pace for Ohio to bank nearly $1 million in fees this year from out-of-state drillers pumping hazardous fluids deep under Ohio.

The amount of wastewater Ohio accepted from out-of-state drillers jumped 25 percent in the first quarter, compared to the last quarter of 2010, likely in part because Pennsylvania officials this year increased pressure on drillers to keep fracking waste out of surface water, said Tom Tomastik of the Ohio Department of Natural Resources.

Drillers "have to do something with this waste," said Pam Melott, manager at WTC Gas Field Services in Indiana County, one of several haulers newly registered to ship to Ohio. "There's a lot of prospective customers. Our customers have called me and they want to know, 'What are we going to do?' ... So, yes, they're very interested in this."

Pennsylvania has six active deep-injection disposal wells, all in Somerset, Clearfield, Beaver and Erie counties, but state Department of Environmental Protection records show drillers tapping the state's gas-rich Marcellus shale rely completely on Ohio to take their waste. Companies sent nearly 14.8 million gallons for underground disposal in the last six months of 2010, the most recent statistics available.

The state has 174 permitted disposal wells and four applications pending, Tomastik said. Ohio's Department of Natural Resources received 16 applications last year, the most since about 1990, he said.

Drillers are contemplating developing disposal wells in both states, government regulators and industry officials said. More haulers are registering to carry shipments to Ohio, and one developer is considering a rail line covering several hundred miles, Tomastik said.

"It's going to get busy," said Tomastik, who oversees Ohio's underground injection program and expects 15 to 25 disposal-well applications in coming months. "It was already increasing, but now it's being fast-tracked because of the demand."

To free gas from the Marcellus shale more than a mile underground, drillers use more than 4 million gallons of water per well. Laced with chemicals and shot at high pressure, the fluid breaks through the earth, but more than a fifth of it returns to the surface with more chemicals, solids and metals freed from underground, and that water must be treated either for reuse or disposal.

Drillers were taking some of it to plants that treated it, then dumped it into rivers. The Pennsylvania DEP in August set stricter standards for the amount of solids those plants could allow in treated water. This spring, the agency asked drillers to stop taking Marcellus water to those plants, sparking the search for options.

"We all knew. ... Every oil and gas well produces brine, and that brine has to go somewhere," said Patrick Creighton, spokesman for the Cecil-based Marcellus Shale Coalition.

Some water used in shale gas drilling won't be recycled, usually because there's no place to use it or no convenient place to recycle it. That water is distilled into a highly concentrated brine and that goes to underground disposal wells, said Matt Pitzarella, spokesman for Texas-based Range Resources, which has offices in Cecil.

Marcellus drillers in Pennsylvania generated more than 6 million barrels of liquid waste from July 2009 through June 2010, according to state records. Depending on whether disposal reporting was done correctly, as little as 0.5 percent or as much as 4.7 percent of that may have gone to injection disposal wells.

In the second half of last year, drillers produced almost as much liquid waste -- 5.3 million barrels -- and started sending more than 6.6 percent of their waste to injection disposal wells, all in Ohio.

As regulations tightened and pressure mounted, more Marcellus shale drillers moved toward recycling. Several of the region's most active drillers said they recycle 90 percent to 100 percent of the water they use, sending what can't be recycled to Ohio or to a specialized treatment plant in Williamsport.

Some of the wastewater may take years to return to the surface with gas at a well. It contains such high concentrations of salt that often it can't be recycled, said Matt Pitzarella, spokesman for Texas-based Range Resources, which has offices in Cecil.

Consol Energy Inc. officials estimate they can reuse water four to five years before it becomes too salty, spokeswoman Lynn Seay said. The coal and gas company, based in Cecil, is casing and testing its first disposal well in Ohio and expects a permit by fall, she said.

"Sooner or later, they end up with something they've got to get rid of," said Jan Jarrett, president and CEO of the environmental group Citizens for Pennsylvania's Future. "I would think (a disposal well) is a viable, environmentally accepted disposal option -- provided that it is done by the book and that (the U.S. EPA) vigorously regulates it."

Underground injection wells long have been the primary disposal spots in states including Texas, Louisiana and Arkansas -- but not in Pennsylvania, experts and industry officials said.

To bore an affordable, effective disposal well requires a permeable layer of earth that will absorb the waste and an impermeable layer above to trap it, all about 4,000 to 5,000 feet underground, said Badie Morsi, director of the University of Pittsburgh's Petroleum Engineering Program. Pennsylvania has that type of rock, but companies are either tapping it for gas or using it for underground gas storage, experts and industry officials said.

Ohio, in contrast, has plenty of unused, permeable, relatively shallow sandstone, Morsi said.

Since the Pennsylvania DEP's request to keep drilling waste out of rivers, inquiries nearly tripled for disposal wells in Pennsylvania, said David Sternberg, a spokesman at the EPA, which oversees the state's disposal wells. Yet, no developers have applied, he said.

Those developers likely would have to drill 12,000 to 15,000 feet to find acceptable disposal space, Morsi said. That could cost three times as much as boring a well in Ohio, he said.

Ohio runs the deep-injection disposal wells in its state for the EPA, and last June added a surcharge to help pay for regulators and inspections, Tomastik said: 5 cents per barrel for Ohio drillers, and 20 cents for out-of-state drillers. Ohio doesn't have much shale drilling yet, but set the fee as part of a package to make the growing industry pay for itself. So far, that one fee has brought in nearly $78,500 a month just from out-of-state drillers, Tomastik said.

Companies providing the disposal service recently raised charges from about $1 per barrel to about $4 per barrel, and trucking adds $2 to $3 per barrel, according to Pitzarella.

That hasn't slowed demand. Of the 2.4 million barrels of fracking water injected into Ohio disposal wells last fall, 39 percent came from other states. During the first three months of this year, 49 percent came from out of state, Tomastik said.

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