Shale Daily / NGI All News Access

Utility Promoting Pipelines for Marcellus Water

The head of a major Pennsylvania water utility sees a two-fer in convincing Marcellus Shale operators to replace trucks with pipelines to supply water for fracking, thereby saving roads and supplying piped water to rural customers.

In addition to potentially lowering operating costs, certainly over the long term, the proposal could solve some large problems facing rural Pennsylvania: the quality and accessibility of water supplies and the damage to local roads caused by hauling trucks, Kathy Pape, president of Pennsylvania American Water Co. (PAW), said last Wednesday at the second day of the Marcellus Shale Gas Environmental Summit in Pittsburgh.

"We have parts of Pennsylvania that are still like third-world countries in terms of public water supply. So a pipeline is one way we see to get water out to those areas," she said. The idea is this: operators would build water pipelines to reduce their trucking and road repair costs, and then give the pipelines to PAW once drilling operations are completed.

While that might sound like a scheme to get free pipelines, Pape said regulated utilities can't include contributed assets in their capital costs, meaning that donated pipes would not increase rates (although it would increase the number of rate-paying customers).

Additionally, Pape believes there are benefits to industry taking the lead. First, operators might be able to see cost savings by pipelines to sparsely populated corners of the state that PAW would like to serve but can't afford to connect to the grid.

Second, because operators already have leases for surface access they can build pipelines through open country, whereas PAW is often forced to build pipelines under roads. Pape noted that the primary cost of pipeline construction comes from road restoration.

With access to piped water, many residents in rural corners of Pennsylvania would be able to stop using unregulated water wells that are often contaminated, according to a 2009 report from the Center for Rural Pennsylvania. Because operators often get blamed for contaminating those wells, many companies have been forced to test water wells before drilling begins in order to gather baseline information (see Shale Daily, Aug. 10).

The proposal wouldn't keep industrial trucks off the roads entirely. Operators also use trucks to haul sand and wastewater to and from well sites, and while each Marcellus well requires around 5 million gallons of water for each round of stimulation, companies are increasingly recycling water or using other fluids (see Shale Daily, Aug. 24).

Although often overlooked, PAW is one of the most important players in the Marcellus and at the center of many major regulatory issues in Pennsylvania over the past year.

After PAW noticed elevated levels of total dissolved solids levels on the Monongahela River the Pennsylvania Department of Environmental Protection (DEP) imposed a 500mg/L effluent standard for oil and gas operators (see Daily GPI, May 18).

And the concerns about bromide levels in PAW water supplies contributed to DEP asking facilities to stop delivering wastewater to water treatment plants (see Shale Daily, April 20).

After the New York Times published an article about radioactivity from Marcellus wastewater contaminating public water supplies, PAW alleviated some public concerns by voluntarily testing its major water supplies finding "no elevated or harmful levels" of radiological contaminants, volatile organic compounds or inorganic compounds.(see Shale Daily, May 19).

And several major recommendations of the Marcellus Shale Advisory Commission -- including increased setbacks from waterways, guidelines for notifications and an environmental assessment checklist -- came from PAW (see Shale Daily, July 19).

"We don't want to sit on the sidelines and say, 'This industry should stop,' because we don't believe the industry should stop. We believe we should have a seat at the table," she said.

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