Shale Wastewater and Public Treatment Plants

Originally published in Texas Lawyer, June 8, 2015

By Larry Nettles, Sue Snyder, Jay Rothrock and Jordan Rodriguez

Storage, treatment, and disposal of wastewater have been one of the U.S. Environmental Protection Agency's areas of attention when it comes to hydraulic fracturing operations. EPA has been studying the feasibility of existing options for such use—including the use of publicly owned treatment works for treatment and disposal for such wastewater. In that vein, EPA recently proposed effluent limitation guidelines for hydraulic fracturing wastewater that would prevent the discharge of untreated shale wastewater into publicly owned treatment works.

Wastewater from hydraulic fracturing poses unique treatment problems for POTWs. This wastewater often contains salts, minerals, organic and inorganic compounds, metals, and naturally occurring radioactive materials that are not found in wastewater typically handled by POTWs. These substances can interfere with the plants' treatment systems or pass through them untreated before being discharged into the environment.

EPA's proposed ban would apply to wastewater generated from production, field exploration, drilling, well completion, or well treatment during unconventional oil and gas extraction. It would not apply to conventional oil and gas operations, nor would it apply to commercial wastewater plants that are regulated separately. The preamble to EPA's proposed rule concludes that the ban will not increase industry costs because operators have already stopped sending their wastewater to POTWs. EPA bases this conclusion upon the fact that it could not identify a current instance of an operator sending wastewater to a POTW; rather, its research revealed that operators now rely on underground disposal wells, commercial treatment plants, or recycling and reuse technologies to manage waste streams. Thus, EPA anticipates that if the rule is finalized along the lines proposed, it will not result in significant changes to current industry practices.

The Clean Water Act regulates discharges of pollutants from point sources into waters of the United States through National Pollutant Discharge Elimination System permits. Under CWA regulations that have been in effect since 1979, onshore oil and gas facilities may not discharge wastewater directly into the environment, except in limited circumstances, forcing companies to develop other techniques to manage wastewater, most commonly through deep underground injections. This method is common in states like Texas, where companies often inject wastewater into older conventional wells that are no longer productive. In other states, such as Pennsylvania, the geology is not well-suited for underground disposal wells. As a result, companies operating in these regions have to transport wastewater hundreds of miles for disposal. Because long hauls may be prohibitively expensive, operators have often sought other disposal options. Some operators historically discharged shale wastewater into POTWs; more recently, operators have turned to centralized wastewater treatment facilities or developed methods to recycle and reuse the wastewater in future operations when underground disposal is unavailable or uneconomical.

The CWA does not control discharges that enter POTWs through the NPDES permit system. Instead, EPA sets national effluent limitation guidelines and pretreatment standards for industrial wastewater based on the best available technologies that are economically achievable. However, EPA's current guidelines lack pretreatment standards designed for discharges of wastewater from unconventional oil and gas operations. In October 2011, EPA announced its intention to study discharges of shale wastewater with a view toward proposing first-time guidelines and standards, prompted in large measure by concerns that POTWs were ill-equipped to treat this type of wastewater. EPA's proposed rule follows through with this pledge, but rather than setting pretreatment standards for shale wastewater discharges to POTWs, EPA has effectively proposed to ban the practice. Also in 2011, the Pennsylvania Department of Environmental Protection sought a voluntary commitment from operators to cease discharging shale wastewater into POTWs unless and until they could implement technologies capable of removing the pollutants of concern.

Although the POTW issue was confined largely to the Marcellus Shale region, changes in state regulations and technology improvements have resulted in a dramatic increase in wastewater recycling across the United States. According to the Pennsylvania Department of Environmental Protection, annual wastewater reuse has increased from 2.6 to over 22 million bbl since 2010; wastewater recycling has increased from 4.6 to more than 7.8 million bbl over the same period. Even states such as Texas, where underground disposal still predominates, companies are reporting increases in recycling and reuse. Additionally, more operators are using brackish water instead of freshwater in their hydraulic fracturing fluids, according to the Texas Railroad Commission's Eagle Ford Task Force. Oil and gas companies are also developing methods to fracture formations without using water at all; indeed, operators have used carbon dioxide in this way for decades, albeit on a limited basis. As the political and regulatory environment shifts toward conserving finite resources, exploring alternative treatment techniques and reducing freshwater use will remain an issue of strategy importance for industry.

While EPA's proposal essentially confirms the end of a disposal practice that industry and the states have already abandoned, operators who are concerned about the potential impacts of these new requirements should participate in public hearings and the public comment process. EPA is encouraging industry to submit additional data to the agency about recent improvements in wastewater treatment technology, such as mobile filtration plants that treat wastewater in the field for reuse by nearby wells. Information on improved technology can also inform EPA's ongoing revisions to its effluent guidelines and standards for the broader onshore oil and gas industry (including conventional operations), as well as its ongoing study of commercial treatment plants that are currently accepting shale wastewater for treatment and disposal. Deliveries to these commercial plants are not affected by the proposed rule, although EPA has indicated that it could revise regulations applicable to those facilities in a future rulemaking effort. Comments on the proposed rule are due on or before July 17, 2015.

Reprinted with permission from the June 8, 2015 edition of Texas Lawyer. © 2015 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited.

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.