December 12, 2011


Marcellus Shale wastewater recycling company targets southwestern PA

Date: Friday, December 9, 2011, 6:00am EST


Premium content from Pittsburgh Business Times by Anya Litvak, Reporter 

Fresh off a facility groundbreaking in Tioga County, Blossburg-based Hydro Recovery LP is mulling a move into southwestern Pennsylvania.

The Marcellus Shale wastewater recycling company is probing the market in Belle Vernon, Washington County, and Freeport, Butler County.

Hydro Recovery previously considered two locations for possible water treatment plants in Fayette County, but shifted its focus to Washington and Butler because there was more interest there, said Teresa Irvin Copenhaver, business development manager.

Stationary Marcellus water treatment plants allow gas well operators to truck or pipe their flowback and drilling water for treatment there. Zero liquid discharge plants, such as Hydro Recovery’s $12 million existing facility in Blossburg, then return the treated water back to the drillers for use in future operations.

While many such plants charge operators to drop off their water and require them to pick up the treated product, Hydro Recovery flips the formula. It sells the treated water as a patented product to drillers and, in exchange, accepts their wastewater for free.

Copenhaver couldn’t pin down a time line for negotiating a plant in this region. That will depend on market dynamics, she said.

Hydro Recovery is in talks with a Butler County operator looking for frac water recycling options close to its well sites, she said, declining to name the firm. According to DEP records, REX Energy is the most active operator in Butler County, followed by Phillips Exploration Inc.

A southwestern Pennsylvania facility may not rise to the capital cost of the Blossburg plant, Copenhaver said, especially if it’s tailored to one company’s needs.

“It’s really going to depend on where our market research develops,” she said.

Hydro Recovery also is working to build plants in Bradford and Clearfield counties, an effort that’s ahead of its southwestern Pennsylvania pursuits.

Last month, it broke ground on another facility in Antrim, Tioga County, which is scheduled to be operational by mid-2012. The plant also will treat 720,000 gallons of acid mine drainage water per day, which will then be sold to Marcellus operators to diminish their need for withdrawals from Pennsylvania water bodies. The practice of using treated acid mine drainage received a public endorsement last month from DEP Secretary Michael Krancer.

Copenhaver said Hydro Recovery is hoping to incorporate acid mine treatment in future facilities as well, but that will depend on economics. Getting water withdrawal permits in southwestern Pennsylvania is said to be easier than in the Susquehanna River Basin, for example, so paying more for treated acid mine drainage may not be a compelling proposition locally.

WATER MARKET

The frac water recycling market in this region isn’t exactly bursting at the seams, said Anthony Cialella, vice president of energy services with New Castle-based Advanced Waste Services PA.

Advanced Waste was treating Marcellus flowback and discharging it to Pennsylvania waters under a DEP permit before the state asked drillers to suspend taking frac water to such plants in April. Since then, the company has worked to get a treatment and recycling permit, where all treated frac water would be taken away by operators for use in future operations. It secured the permit less than two months ago, but hasn’t been able to wedge itself back into the frac water treatment business yet, Cialella said, because of the abundance of other options.

“Western Pennsylvania is a completely different economy than central Pennsylvania,” he said. “There’s not only other plants that can treat water for reuse, (and) not only are the producers doing that on site, but also there are injection wells in Ohio.”

Range Resources, one of the most active operators in southwestern Pennsylvania, treats the vast majority of its flowback water on site, but does truck some of its drilling water to a plant in New Castle.

“If someone were to construct a facility close to our core operating area in Washington County, we would take a serious look at it,” said spokesman Matt Pitzarella. “Every hour we eliminate from water being hauled on the road saves us about $1 per gallon, which adds up.”

 

http://www.bizjournals.com/pittsburgh/print-edition/2011/12/09/marcellus-shale-wastewater-recycling-co.html

 

Anya Litvak covers energy, transportation, gaming and accounting. Contact her atalitvak@bizjournals.com or (412) 208-3824.