Bloomberg News

Ohio Tries to Escape Fate as a Dumping Ground for Fracking Fluid

February 03, 2012

Feb. 1 (Bloomberg) -- The millions of gallons of chemical- laced wastewater that fracking produces must flow somewhere, and Ohio is trying not to be that place.

The oil and natural-gas drilling boom spurred more permits for disposal wells there during the past two years than during the previous decade combined. The volume injected into them was on a near-record pace last year, according to the Department of Natural Resources, and more than half was from out of state. That included 92.6 percent of the water sent to a Youngstown well closed last year after 11 nearby earthquakes.

“We have become in Ohio the dumping ground for contaminated brine,” state Representative Armond Budish, the House Democratic leader, said at a Jan. 26 forum in Columbus. “We didn’t prepare adequately for the potential for earthquakes and other environmental problems.”

Now, Ohio is considering tightening regulations governing wells in response to the temblors and seeking to stem out-of- state fluid shipments. It’s an example of the challenges U.S. states face as they try to enjoy hydraulic fracturing’s economic boost while avoiding its side effects.

Ohio’s situation highlights the tradeoff that may come with the technique of using chemical-laced water to bring forth natural gas and oil, said Glen Andersen, energy program director for the National Conference of State Legislatures in Denver. While states benefit from investment by companies including Chesapeake Energy Corp., Halliburton Co. and Vallourec SA, they also may contend with roads damaged by heavy equipment and concerns about polluted drinking water, he said.

Negotiating the Constitution

“It doesn’t necessarily mean there needs to be this tradeoff with environment versus energy extraction,” Andersen said in a telephone interview. “It really comes down to the degree to which it’s regulated and whether those regulations are enforced.”

In Ohio, companies pay to operate disposal wells after they have been approved by the state, and brine haulers hired by drillers pay the companies to inject the fluid. The well owners pay a disposal fee to the state of 5 cents per barrel for brine originating in the state and 20 cents for out-of-state wastewater, according to the Ohio Natural Resources Department.

Republican Governor John Kasich said that while he’s not happy about the increasing volume of wastewater from neighboring states, the U.S. Constitution prohibits interference with shipments. He declined to speculate about what might be done.

Soaking It Up

“When people are using our things, and they could disrupt our ability to have progress here, we have to be concerned about it,” Kasich said in an interview in Columbus on Jan. 26. “We’re thinking about what we can do and not violate the interstate commerce clause.”

There were more than 150,000 so-called Class II injection wells in 33 states to handle drilling wastewater disposal, according to a 2010 U.S. Environmental Protection Agency inventory, Catherine C. Milbourn, a spokeswoman, said in an e- mail.

Ohio has fewer wells and less disposal as energy-producing locales such as Texas and Oklahoma, said Larry Wickstom, the state geologist.

Still, with fracking’s increase, Ohio’s wells absorbed 368.3 million gallons during last year’s first three quarters, according to Natural Resources Department records. That’s up from 359.3 million for all of 2010 and more than in any year since 1987, records show. The state approved 29 permits for wells last year after averaging about four a year for the past two decades.

Pennsylvania’s Sponge

Of the almost 22 million gallons of wastewater that Pennsylvania’s Marcellus shale operators sent to disposal wells in the first six months of 2011, nearly 99 percent went to Ohio, according to production reports from the Pennsylvania Environmental Protection Department.

Pennsylvania has six active Class II wells compared with 177 in Ohio in part because the geological formations in the state’s east aren’t permeable, and because until recent years, the state allowed drillers to discharge brine into streams or take it to treatment plants, Steve Platt, an EPA hydrologist in Philadelphia, said in a telephone interview.

Fluid recycled or sent to disposal wells increased after the state started limiting wastewater sent to treatment plants in 2010, Kevin Sunday, a spokesman for the Pennsylvania department, said in a telephone interview from Harrisburg.

Effluent Exodus

The exodus of fracking wastewater to Ohio is “a chronic problem,” Jan Jarrett, chief executive of the environmental advocacy group PennFuture, said in a phone call from Harrisburg. She called for solutions such as the construction of treatment facilities that can handle drilling wastewater and meet state standards.

“This is not going to go away,” Jarrett said.

After Youngstown’s earthquakes, including a 4.0 magnitude New Year’s Eve temblor, Ohio shut down a disposal well that D&L Energy Inc. began operating in December 2010 and declared a moratorium on new wells in the area pending further study.

Ohio will no longer allow drilling into Precambrian or bedrock levels because the 9,300-foot (2,834-meter) Youngstown well was too deep, Kasich said.

The Natural Resources Department soon may make other recommendations, including limiting volumes injected and requiring more in-depth analysis of rock formations and seismic data before wells are drilled to limit earthquake risk, said Rick Simmers, chief of the department’s oil and gas division.

‘A Mighty Risk’

The Youngstown well may have triggered a unknown fault, and Ohio needs to do more mapping of its deep underground structure, said Wickstom, the state geologist.

The state’s actions are too little, too late, said Jack Shaner, deputy director of the Ohio Environmental Council in Columbus. He called the Youngstown earthquakes “a heck of a shake-up, wake-up call.”

“Why is Ohio lunging at the opportunity to be the dumping ground for the nation’s fracking waste?” Shaner said in a telephone interview. “We are taking a mighty risk in injecting materials into the deep, dark unknown underground.”

While Simmers said the state hasn’t reached a definite conclusion that the Youngstown well caused the quakes, the evidence “is pretty solid,” Art McGarr, a geophysicist for the U.S. Geological Survey in Menlo Park, California, said in a telephone interview.

Preliminary findings of a study McGarr is completing for the EPA suggest a connection between the volume of fluid injected and the size of the earthquakes, and it’s reasonable to expect more seismic activity with increasing amounts of fluid, he said.

“It’s a concern, but it isn’t anything that has me in a panic,” Kasich said. “We are going to need more capacity, but it’s not something that I’m laying awake at night worrying about.”

--With assistance from Romy Varghese in Philadelphia. Editors: Stephen Merelman, Mark Schoifet

To contact the reporter on this story: Mark Niquette in Columbus at mniquette@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net


The Good Business Issue
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus