November 29, 2011

Shaner invests in facilities

By Cliff White — State College - Centre Daily Times

Posted: 12:01am on Nov 26, 2011; Modified: 11:44am on Nov 29, 2011

Centre County’s gas magnate, Lance Shaner, has doubled down his bet on the Marcellus Shale.

Shaner, the co-founder and chairman of the board of Rex Energy and president and CEO of Shaner Hotels, both State College-based companies, has invested in Hydro Recovery, which operates water treatment facilities servicing the gas industry.

Shaner Capital, a $20 million investment fund created in 2010, will assist Hydro Recovery in fulfilling its aggressive expansion plans. The company has one wastewater recycling facility in Blossburg, in Tioga County, and is building another in Tioga County to supply acid mine drainage water to gas companies for use in hydrofracturing.

As drilling ramps up throughout the commonwealth, Hydro Recovery has looked to meet the expanding need for its services by planning two more facilities, in Lawrence Township, Clearfield County, and Towanda, Bradford County. It is looking into building plants in Belle Vernon, Washington County, and locally in Snow Shoe, according to Teresa Irvin Copenhaver, HydroRecovery’s business development manager.

“There’s an increasing need for water to be treated in the Marcellus Shale,” Copenhaver said.

At its Blossburg plant, gas companies truck in wastewater and flowback water, which is then put through a chemical precipitation process that removes the dirt and heavy metals from the water. The solids are pressed into a dry cake and carted off to landfills, and the clean water is then resold back to the gas industry.

“We are a zero-discharge facility, which means any water that comes into our facility for treatment goes back out to gas companies for fracking,” Copenhaver said. “We’re 100 percent recycle, reuse.”

Hydro Recovery was formed in 2008 by Neil Hedrick, who will remain a manager in the new partnership. It has thrived this year, after a request was made by the Department of Environmental Protection in May, asking drillers to cease sending their fracking flowback to publicly owned treatment plants, which had problems adequately treating the toxic water before it was released into the commonwealth’s water supply.

“We helped solve a problem,” Copenhaver said.

The Blossburg plant now frequently reaches its capacity of 330,000 gallons per day, serving drillers including Seneca, EQT and Shell. Next summer, Hydro Recovery will open its Antrim plant, which will treat approximately 720,000 gallons of acid mine drainage water per day and 300,000 gallons of wastewater per day.

At the plant’s groundbreaking, Lance Shaner said Hydro Recovery will use its capital influx from his investment to build more plants that use acid mine drainage to feed the gas industry’s massive demand for water, an announcement that was greeted enthusiastically by the DEP.

“Acid mine drainage impairs more than 5,000 miles of streams in our state, making it ideal for operators to take the drainage out of our waterways and put it to use for hydraulic fracturing,” DEP Secretary Mike Krancer said in a news release. “As natural gas extraction does not require drinking quality water, this represents a real win-win that can address two water challenges at once.”

Cliff White can be reached at 235-3928.

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