Officials from the Pennsylvania Department of Environmental Protection (DEP) and representatives of the natural gas industry met in Harrisburg, PA, Tuesday for the first of a series of meetings to explore methods of treating wastewater generated by drilling operations in the state, including an increasing number of operations in the Marcellus Shale.

The partnership was formed as a result on an increasing demand for the treatment and disposal of brine and other wastewater generated by traditional and Marcellus Shale drilling operations, according to DEP. Other sources of pollutants entering the state’s water supply include discharges from abandoned coal mines, as well as from industrial and sewage treatment plants.

“The rivers and streams of Pennsylvania have a very limited ability to absorb some of the additional wastewater created from the increased development of the Marcellus Shale formation,” said DEP Acting Secretary John Hanger. “Additional wastewater treatment facilities and methods will be necessary to accommodate the increased volumes of wastewater from these drilling activities.”

The partnership’s goal is to limit surface water discharges from wastewater treatment plants by encouraging the reuse of frac water, locating geologic formations capable of safe deep underground wastewater disposal and evaluating new and emerging technologies for treating the remaining wastewater. The drilling industry and DEP have agreed to develop a long-term strategy for permitting treatment facilities by identifying constituents of concern based on sample well data.

Last month DEP’s Environmental Quality Board (EQB) voted to impose increased permit fees on Marcellus Shale drilling operators that would raise the base permit cost to $900 from $100 and require additional fees for deeper wells (see Daily GPI, Dec. 17, 2008). The proposed permit increases still require approval by the state’s general regulatory review board, but if approved, they would take effect this spring. It is the first time since 1984 that the EQB has voted to increase permit fees.

The new fee structure sets a base permit cost of $900 for all Marcellus Shale wells up to 1,500 feet deep, and imposes an additional cost of $100 for every 500 feet of depth past 1,500 feet. The new fee structure would help ensure adequate funding to cover program expenses for permit reviews and well site inspections, the EQB said. The fee increase also would allow the department to hire additional staff to take care of increased permitting requests in the Pennsylvania communities of Meadville, Pittsburgh and Williamsport. DEP issued 7,792 drilling permits in 2008.

Extracting natural gas from the Marcellus Shale formation requires “significant amounts of water to hydraulically fracture the shale formation,” EQB said. The department requires permit applicants to submit water management plans that outline how and where the water will be gathered, how it will be stored at the site and how wastewater will be processed and treated.

Range Resources Corp., which has more than 100 wells drilled in the Marcellus Shale and supported the permit fee increases, called the creation of the partnership “a major step” toward the development of an improved drilling regulatory program and permitting process in the Marcellus Shale.

“The industry and the state recognize that we have ample water resources for the development of the Marcellus Shale and our newly formed partnership will ensure the long-term development of Pennsylvania’s vast natural gas resources,” said Ray N. Walker Jr., vice president of Range’s Marcellus Shale Division. “While existing water treatment facilities in Pennsylvania can accommodate projected increased drilling levels for several years, the task force will examine and develop water management solutions for the future.”

Last year Range increased its leasehold in the Marcellus Shale by 20% to 850,000 net acres (1.4 million gross) and said it planned to drill 40 horizontal wells in the play by the end of the year (see Daily GPI, July 15, 2008). Range and MarkWest Energy Partners LP last June agreed to develop infrastructure in the area. In October the companies announced completion of the first phase of their Marcellus Shale infrastructure, including Pennsylvania’s first large-scale gas processing facility.

Last month the Susquehanna River Basin Commission (SRBC) approved regulatory changes that streamlined its review of producer applications for natural gas wells in the Marcellus Shale in eastern Pennsylvania and southern New York, while further protecting the basin’s water resources (see Daily GPI, Dec. 8, 2008). Effective Oct. 15, 2008, the commission began requiring gas producers to seek prior approval from the SRBC, no matter the amount of water consumed in the exploration and production of shale gas in the region (see Daily GPI, Aug. 19, 2008).

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