WATER SCHEMES ACROSS THE SHALE PLAYS: MARCELLUS/UTICA
| Jurisdiction | United States |
(May 2014)
WATER SCHEMES ACROSS THE SHALE PLAYS: MARCELLUS/UTICA
Partner
K&L Gates LLP
Harrisburg, Pennsylvania
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R. TIMOTHY WESTON is a partner in the Harrisburg, Pennsylvania office of K&L Gates LLP, and practice group coordinator of K&L Gates's global Energy Practice Group. With 42 years of experience in environmental and natural resources counseling and litigation, energy development, administrative and legislative issues, his practice includes representation of diverse interests in project development, natural resource management, and regulatory matters. As part of K&L Gates's Appalachian Basin oil and gas team, Mr. Weston has been an active practitioner in the area of environmental and natural resource issues associated with development of the Marcellus and Utica Shale gas plays, representing both individual companies and the major coalition of entities involved in exploration and development of Marcellus Shale across the basin. Mr. Weston is a 1972 cum laude graduate of Harvard Law School, and earned his B.A. in mathematics with high honors from the University of California at Santa Barbara in 1969. Mr. Weston served for eight years as an Assistant Attorney General in the Pennsylvania Department of Environmental Resources, and from 1979 to 1987, as the Department's Associate Deputy Secretary for Resources Management. He currently serves as Chair of the Pennsylvania Statewide Water Resources Committee, responsible for guiding development of the Commonwealth's State Water Plan, and a member of the Citizens Advisory Council to the Pennsylvania Department of Environmental Protection.
This article is for informational purposes only and does not contain or convey legal advice. The information herein should not be used or relied upon in regard to any particular facts or circumstances without first consulting with a lawyer.
Table of Contents
1. Introduction
2. The Water Resource Challenge in Perspective
3. Water Rights and Water Withdrawal Regulation
3.1 Overview - What Is the Meaning of Water Rights?
3.2 "Water Rights" Granted Under Mineral / Oil & Gas Leases
3.3 Basis of "Water Rights" Under State Law - Common Law and Regulatory Programs
3.4 Common Law Principles Applicable to Water Withdrawals
(a) Classifications of Water
(b) Riparian Rights in Surface Streams, Lakes and Subterranean Streams
(c) Common Law Rights in Percolating Groundwater
(d) The Restatement Rules for Surface Water and Groundwater
(e) Interaction Between Surface and Ground Water
3.5 Regulated Riparian Regimes
(a) Pennsylvania
(b) New York
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(c) West Virginia
(d) Ohio
(e) Kentucky
(f) The Delaware River Basin Commission
(g) Susquehanna River Basin Commission
(h) Great Lakes -- St. Lawrence River Basin Water Resources Compact
4. Protection of Water Supplies
4.1 Liability of Gas Well Operators for Impacts on Other Water Users
(a) Liability for Impacts Caused by Water Supply Development
(b) Liability for Impacts Caused by Gas Well Development and Operation
5. The Flowback / Wastewater Challenge
5.1 Scope of the Challenge
5.2 Overview of Wastewater Management Issues
5.3 Requirements for Characterizing Flowback Wastewater
5.4 Assuring Delivery to Appropriate Facilities
5.5 Treatment, Reuse and Disposal Technology Choices
(a) Natural pond evaporation
(b) Direct reuse for drilling and hydraulic fracturing
(c) Underground injection of flowback & production brines
(d) Conventional treatment technologies
(e) TDS reduction via reverse osmosis
(f) TDS reduction via evaporation
(g) TDS reduction via crystallization
(h) Key regulatory questions affecting selection
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5.6 Regulatory Drivers to Technology Selection - Restrictions on Surface Water Discharges
(a) Overview
(b) The PA TDS Strategy and Regulations
6. Legal and Regulatory Issues in Implementing Treatment and Disposal Facilities
6.1 Regulatory Issues Overview
6.2 Underground Injection of Wastewater or Treatment Residuals
(a) Acquiring Rights to Allow Underground Injection
(b) Federal Safe Drinking Water Act - Underground Injection Control ("UIC") Program
(c) Pennsylvania
(d) Ohio
(e) West Virginia
(f) New York
(g) DRBC
7. Summarizing Key Challenges to Wastewater Management
8. Final Words
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1. Introduction
Shale formation development in the Marcellus and Utica shales presents water supply and wastewater challenges of considerable dimensions, whose scope, intensity and resolution depend to a substantial degree upon the jurisdiction, location and watersheds involved, as well as the relative level of competition for associated water resources.
Development of the extensive natural gas reserves contained in the Marcellus and Utica shale deposits has already proven to be one of the most important economic and energy opportunities for the United States, and the promise for coming decades remains bright. At the same time, extraction and utilization of this gas resource has posed interesting water supply, water resource impact, and wastewater challenges.
While some traditional oil and gas development has utilized, to a modest extent, water supplies in the drilling and hydraulic fracturing processes, Marcellus and Utica shale exploitation involves orders of magnitude greater water resource requirements and wastewater management challenges. Horizontal drilling techniques, coupled with hydraulic fracturing of deep horizontal extensions, entails water use multiple times greater than traditional wells. Based on experience in the Marcellus and Utica plays over the past decade, approximately one to five million gallons of water are required for hydraulic fracturing of each gas well, with the process utilizing as much as 500,000 to 1,000,000 gallons of fluid in each of multiple stages.
At the same time, the fracture stimulation of Marcellus and Utica shale wells results in substantial volumes of flowback wastewaters containing high salt contents and other constituents of potential concern. Of the volumes pumped downhole for fracing, a portion (ranging from 25-50%) emerges from the well over time as flowback water, followed by additional production brines (produced water) over time. Generally, such flowback waters contain 4-25 percent salts (including constituents from the underground formations), plus oil and gas, and chemicals added during the hydraulic fracture process. Typical total dissolved solids ("TDS") concentrations in Marcellus flowback may exceed 100,000 milligrams per liter ("mg/l") - higher than experienced in some other regions and shale plays.
These high-TDS wastewaters pose a substantial challenge, both in terms of volume and concentrations. A number of eastern streams are already burdened with high TDS concentrations, largely from abandoned mines and acid mine drainage, with limited capacity to assimilate additional loadings, particularly during low flow periods. Other streams, particularly in rural watersheds across the northern portions of Pennsylvania and southern New York, are subject to special protection for their high quality, with discharges strictly regulated under "anti-degradation" standards. Some States, such as Pennsylvania, have moved to impose stringent restrictions on new or increased loadings of TDS from Marcellus Shale development, pointing the way to effective "zero discharge" scenarios for wastewater management. Some states, such as Pennsylvania, have effectively proscribed introduction of gas well wastewaters to publicly-owned treatment works (that is, sewage treatment plants) and established new treatment
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standards guidelines for the oil and gas sector. Meanwhile, the U.S. Environmental Protection Agency ("EPA" is scheduled to propose a rule revising effluent guidelines for the unconventional oil and gas extraction industry in 2014.
Over the past five years, recycling of flowback and produced water has grown from a relative rarity to a common practice, contributing significantly to the reduction of disposal requirements, while concurrently reducing somewhat the draft on freshwater supplies. The challenge continues, however, to secure adequate and reliable sources of water with appropriate quality characteristics in reasonable proximity to proposed well sites to meet the gas well development requirements, and to assure adequate, cost-effective methods for disposition of that quantity of flowback and developed water that cannot be effectively treated and reused in ongoing gas well development activities.
Thus, the entire "water balance" of Marcellus and Utica shale development is a critical element to successful pursuit of these shale plays.
2. The Water Resource Challenge in Perspective
From a statewide or basin perspective, water requirements for Marcellus and Utica shale development might appear comparatively modest. The Susquehanna River Basin Commission, for example, estimates that annual consumptive water use for all gas well development, once full-scale development has been reached, will equate to approximately 28 million gallons per day ("mgd"),1 representing approximately three percent of total basin consumptive water use.2 By comparison, the total Marcellus Shale gas well water demand in the Susquehanna Basin equates to about one-half the basin-wide water use by the recreational sector (golf courses and ski resorts), and less than one nuclear power plant.3 However, in some basins, cumulative consumptive water use (from all uses) poses concerns during drought and low flow events, as eastern States and water management agencies attempt to balance demands by upstream users versus needs for downstream flows to maintain wastewater assimilative capacity, fisheries, salinity control in estuaries, and other environmental conditions.4 At the same time, some of the Marcellus and Utica shale...
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