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Coast Guard Sinks Idea to Allow Barges to Haul Shale Wastewater

The U.S. Coast Guard (USCG) said it is withdrawing a proposal to allow barges to transport wastewater in bulk from hydraulic fracturing (fracking) along the nation's waterways, in part due to tepid support from the oil and gas industry, but it may revisit the idea in the future.

In Tuesday's edition of the Federal Register, the USCG said it was withdrawing a policy letter from October 2013, which had proposed granting the guard the authority to give conditional approval for barges to transport fracking wastewater (see Shale DailyOct. 31, 2013). Specifically, the USCG had proposed specifying the conditions under which a barge owner could request an inspection certificate for transporting wastewater, and to define what information barge owners would need to provide.

"That proposed policy is withdrawn and no new policy is proposed at this time," the USCG said, adding that barge owners may continue to request approval to transport wastewater. Those requests would be considered on a case-by-case basis. The USCG added that barge owners would be required to comply with current regulations, including supplying details of the chemical composition of each individual tank load.

"USCG will consider instituting a standardized process for transporting wastewater in bulk after it has assessed whether current regulations are inadequate to handle requests for transport of wastewater in bulk and environmental impacts that may be associated with wastewater transport by barge," it said.

USCG’s J.G. Lantz, director of commercial regulations and standards, wrote on Feb. 17 that the proposed policy letter was in response to the rapid pace of shale development in the Appalachian Basin. He also disclosed that in 2011, a barge owner contacted the Coast Guard to request permission to transport wastewater.

"Anticipating that this would be the first of many requests, the USCG proposed a standardized national policy to replace the case-by-case process which might have led to delays in processing those requests," Lantz said. "We have not received significant interest from industry, however, which is one of the reasons we are withdrawing the proposed policy."

USCG Lead Chemical Engineer Cynthia Znati told NGI's Shale Daily that, to date, the Coast Guard has not authorized any shipments of wastewater via barge.

According to Lantz, the USCG received 70,115 comments during a 30-day public comment period over the proposal. Of those, 98% of the comments (68,747) were opposed to the proposed policy, and many also voiced opposition to fracking.

"Commenters stated concerns that a spill or accident would release toxic chemicals into our rivers and could put our drinking water at risk...[but] these comments expressed the writers' general opposition to the proposed policy letter without offering input regarding the substance of transporting wastewater in bulk as described in the policy," Lantz said. "The USCG has no legal authority to permit, prohibit, or place conditions on the practice of fracking itself. [Our] only authority in this matter is the authority to evaluate the safety of wastewater as a cargo and set conditions on its carriage by vessel."

West Virginia Oil and Natural Gas Association (WVONGA) Executive Director Corky DeMarco said oil and gas producers would need to put wastewater on trucks and drive it to navigable rivers in order for transport by barge to be an option -- and it's not an attractive one.

"Like anything else that's possibly hazardous or at a potential contaminant, the likelihood of an accidental spill goes up when you're using roads," DeMarco told NGI's Shale Daily on Wednesday. "Our exposure would be greatly increased. That's the reason the USCG didn't get a lot of input from the producers. For us to be able to process the wastewater and dispose of it as close to where we produce it makes more sense for us."

DeMarco added that due to the current collapse in oil and gas prices, "the transportation costs [via barge] would eat into what minimal amounts of profit there are in drilling gas wells right now." And for the past several years, the industry has been reusing upwards of 90% of produced water through treating it and adding freshwater. Any residual, highly-concentrated fluids "are usually disposed of in an underground injection well.”

At the time the USCG floated the possibility of allowing barges to transport wastewater, at least two projects along the Ohio River were considered potential beneficiaries.

GreenHunter Water LLC began processing complex oilfield waste from a bulk storage and barge transloading terminal along the Ohio River at New Matamoras, OH, in July 2013 (see Shale DailyJuly 1, 2013). About 80 miles upriver, River Rail Development LLC was redeveloping a former steel mill in Steubenville, OH, to support shale operations (see Shale DailyApril 9, 2013).

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