Conference Explores Options to Reuse Wastewater from Hydraulically Fractured Oil & Gas Wells

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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Each year, U.S. Oil & Gas Producers spend billions of dollars to acquire, transport, treat and dispose of water used in their hydraulic fracturing process. Large and small water-service companies are jockeying for a greater slice of a rapidly growing industry. But because each shale formation has unique geologic and hydrological properties, as well as different regulatory structures, no "one size fits all" solution to the industry's water challenges appears imminent, agreed speakers and attendees at the "Water Management for Shale Plays - 2013," conference, produced by Information Forecast Incorporated (Infocast) (Woodland Hills, California).

Oil and gas producers spent $18 billion to transport and treat water associated with shale formation, George Kast, founder and chief executive of Produced Water Solutions Incorporated (Erie, Colorado), told about 125 attendees at the Infocast conference. That figure came from a report published by the U.S. Department of Energy (DoE) (Washington, D.C.) in 2011. Given the continued dramatic growth of hydraulic fracturing, outlays likely are higher today.

In some basins, it can cost up to $13 per barrel to dispose of wastewater from shale drilling, the DoE report noted. Trucking is often a significant portion of those disposal costs, the report said.

Some states with large shale formations, such as Texas, Ohio and North Dakota, have many available underground injection wells where operators can dispose of wastewater from hydraulically fractured wells. But other states, including Pennsylvania and West Virginia, have a limited number of disposal wells, forcing companies to either transport waste water long distances to an adjacent state, or treat it to meet local water-quality standards.

Oil and gas producers are more closely investigating recycling and other options for wastewater because the volume of that water is large and growing. It takes 4 million to 7 million gallons of water to hydraulically fracture a single well, and 10% to 15% of that water quickly returns to the surface in the form of flowback water, Steve Hughes, water management group manager for TETRA TECH Incorporated (NASDAQ:TTEK) (Pasadena, California), told conference attendees. Once a well begins producing oil or gas, it produces less flowback water, but more produced water--basically, water that had resided in the reservoir along with the oil and gas. Both kinds of wastewater must be disposed or treated for reuse. In Pennsylvania, oil and gas operators created about 35 million barrels of flowback and produced water in 2010, Hughes told the conference. But by 2017, that amount is expected to more than double, to about 85 million barrels.

For operators in Texas and North Dakota, the cheapest and easiest disposal option has been to put the wastewater in one of the state's many disposal wells. But operators in Pennsylvania don't have that option. They have had to incur heavy costs to transport wastewater to neighboring Ohio, which has numerous wastewater wells. But high transportation costs, coupled with recent seismic activity in Ohio that some connected to disposal of wastewater from hydraulically fractured wells, are raising questions about the future of transporting wastewater from Pennsylvania to Ohio, Hughes told attendees.

Hughes outlined several options oil and gas producers have for treating their wastewater for potential beneficial reuse by other industries. At this point, he said the most cost-effective option appears to be thermally treating the wastewater so it can be used in industrial chemicals, such as hydrochloric acid and bleach.

"The markets for these chemicals are stable and growing, particularly in the Northeast," he said. "Extensive brine pre-treatment processes would be required to satisfy chemical product specifications. And rail access would be required to deliver the chemicals to markets. But the sale of high-value chemicals allows for a cost-competitive per-barrel fee."

It could cost $8 to $12 per barrel, plus transportation costs, to thermally treat oil and gas wastewater from the Marcellus to be reused in industrial chemicals, Hughes estimated. That is slightly less than the costs to treat that wastewater for reuse as a road salt, he added. But the TETRA TECH manager noted the road salt reuse option carries several additional wrinkles that could drive up the cost and limit its economic effectiveness. Road salt is only used for four months a year in the Northeast, while wastewater from hydraulic fracturing is produced every day. Storing the manufactured road salt would add costs and reduce the economic attractiveness of that option. Moreover, the addition of so much road salt to a mature market could cause prices to collapse, creating additional risks and uncertainties for all parties.

Hughes also noted that eight thermal treatment plants are operating, or under development, in the Marcellus Shale, each capable of processing 2,000 to 8,000 barrels of wastewater per day.

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