Water follows the shale trail

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The market for wastewater treatment solutions to serve shale gas wells could be worth $100 billion over the next 50 years. Emily Pickrell investigates.

The discovery of potentially huge natural gas reservoirs in the Northeast Marcellus Shale has left US natural gas companies with visions of gigantic extractions dancing in their heads. But the water-intensive extraction technique required to establish the gas wells – known as hydraulic fracturing – will generate billions of gallons of contaminated water that will need to be cleaned up.

The bill for treating this wastewater could run into billions of dollars, according to Ryan Connors, an equities analyst at Boenning & Scattergood, who points out that this, in turn, may create new opportunities for companies providing wastewater treatment solutions. “It seems all but certain that the shale gas wastewater treatment market nationwide will exceed $100 billion over the estimated life of the known US shale plays, perhaps a period of 40 to 50 years,” Connors told GWI.

The Marcellus Shale gas field, one of the largest of its kind, stretches from New York through Pennsylvania, Ohio, Maryland and West Virginia. While thousands of wells have been drilled at Marcellus, most of them to date have not been deep wells.

Hydraulic fracturing (fracking), which blasts water down gas wells at high pressure, was successfully used on the Barnett Shale in Texas. The technique, during which a stew of chemicals is added to the water to help break down the rock and let the gas flow out, makes the Marcellus Shale look like a rich opportunity for new gas discovery. Pennsylvania’s state Department of Environmental Protection (DEP) issued more than a thousand gas well drilling permits for Marcellus in 2009 and has already begun reviewing permit applications for proposals to build treatment plants for processing the wastewater.

Hydraulic fracturing is water-intensive. It can use up to six million gallons (22,700m3) of water per ‘frac’ to get a natural gas well working, and there is some concern about the addition of chemicals to water, how the wastewater will be disposed of, and possible leaks and spills into groundwater sources.

In the past, contaminated shale water has been put into disposal wells. This solution has been viable for the Barnett and Haynesville Shales on the Gulf Coast, but the location of the Marcellus Shale covers states where regulation is stricter, particularly Pennsylvania.

These stricter regulations have led companies to develop a broad range of ways to dispose of or treat the used water, including mobile treatment units (MTUs). MTUs are used for exploring new potential well sites and are capable of treating low volumes of water. For areas that have a higher concentration of wells, regional wastewater treatment facilities tailored to cope with fracked water will be in demand.

Calgary-based Aqua-Pure is one such company specialising in non-traditional wastewater treatment. Aqua-Pure has already cleaned up more than 500 million gallons (1.9 million m3) of water in the Barnett Shale and plans to use this expertise in the Marcellus Shale.

“The Marcellus just started to open up to drilling and to fracking; we are hoping to move in there early this year,” said Jason Copan, senior process engineer at Aqua- Pure. “The Marcellus is substantially larger than the Barnett and we expect the amount of water to be treated to be larger once drilling takes off. It is a very large opportunity for our company.”

Ecosphere Technologies, General Electric, HPD (Veolia) and Siemens are also vying for a share of the wastewater cleanup market in the Marcellus Shale.

The fracking process itself is controversial, and there is currently a Senate bill in committee that would amend the Safe Drinking Water Act to repeal a 2005 exemption for hydraulic fracturing. Congress had exempted hydraulic fracturing into drinking water sources from regulation under the Safe Drinking Water Act, for purposes related to oil, gas, and geothermal production.

Concern about further regulation in the Marcellus Shale led Exxon Mobil to include a protection clause in its purchase of shale gas producer XTO Energy that would allow it to walk away if new laws restrict fracking.

But strict legislation also shows the critical role effective wastewater treatment could provide. Hydraulic fracturing is here to stay, Connors asserts, because of the demand for this huge potential source of natural gas. “With a combination of huge gas reserves and stringent environmental policies, it’s no wonder that the Marcellus is viewed as the most promising among several potentially lucrative shale gas wastewater treatment markets,” he said.