PhillyDeals: Gas-field water treatment put at $3 billion

It's going to cost $3 billion a year to treat wastewater in the Marcellus Shale gas fields in upstate Pennsylvania and neighboring states once the industry gets going, says Ryan M. Connors, a water- stock analyst with Boenning & Scattergood.

It can take six million gallons of water to hydraulically fracture ("frack") a single deep natural gas well into production. Drillers contemplate tens of thousands of Marcellus wells. Boenning expects 3,300 wells coming online in 2020, pumping water at 14 cents a gallon.

"Most of this water returns to the surface in the form of a contaminated liquid," bearing "chlorides and sulfates as well as heavy metals," the disposal of which "presents yet-to-be-fully resolved challenges for gas companies," Connors told clients in a report.

Exxon Mobil Corp. is so fearful that stricter water laws could derail shale-gas drilling that the company "inserted a protection clause allowing it to walk away should new laws restrict the company from fracking" in its $41 billion deal this month to buy Marcellus driller XTO Energy, Connors adds.

In Texas shale fields, where water-quality laws are relatively lax, drillers dump waste down dry oil wells. Upstate Pennsylvania has more water, but mountain-road trucking costs are high, pollution laws are stronger, and disposal is expensive. Drillers would like to dump waste in municipal treatment facilities. But those are "designed to treat biological, not chemical, wastewater."

The best solution, Connors concludes, is to boil wastewater away, using natural gas burners, leaving the bad stuff as manageable solids.

He says that would be good business for U.S. boilermakers, at least.

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This article was promoted by ActionPA and Energy Justice Network.