A business partner in a fledgling Rayne Township water treatment plant closed by the Pennsylvania Department of Environmental Protection contends over-regulation by the state agency needlessly shut down the plant for long periods of time and caused financial strains on the start-up venture.
“The reason that plant closed was totally because of the DEP. It really upsets me that they operated in the fashion they did,” George Aubrey said Wednesday. Aubrey is the managing partner of Aquatic Synthesis Unlimited, one of two companies that renovated the former Kay Arena near the north end of the Route 119 Bypass into a water treatment plant intended to serve the natural gas and oil well drilling industry.
The companies planned to use specialized equipment and proprietary processes to treat wastewater from natural gas drilling operations, enabling drillers to use recycled water in their next hydraulic fracturing job instead of buying fresh water.
Aubrey said the plant would have reduced the amount of “frac” chemicals injected into gas well drilling holes and would have cut trucking costs for local drillers who sometimes haul flowback and wastewater to Ohio for disposal.
But in a Gazette story Sunday, DEP confirmed it has started a bond forfeiture, closure and cleanup action against Aquatic Synthesis Unlimited.
A DEP spokesman said the plant operated only sporadically, some water leaked from a containment area and contaminated a small amount of soil and the operators left 1 million gallons of water at the plant.
DEP plans to use a $1 million bond posted by Aquatic Synthesis to clean up the treatment site.
Aubrey said he sold his holdings in the venture to other investors in September. And, he added, he had an inkling early on that getting the new plant through DEP’s permitting process was not going to be easy.
In December 2011, Aubrey started working with TERRA Services, of Irving, Texas, to get the arena renovated and the water treatment equipment installed. TERRA brought piping and material for a containment area onto the site, and Aubrey said he was cited (he was later told it was only a warning) by DEP officials for bringing material onto the property before the permitting process was completed.
The following June, DEP told him a permit would not be issued until the citation was settled.
“And the citation was ‘constructing and operating a wastewater facility without a permit.’ I said, ‘I can’t sign this thing.’ I was no more constructing and operating a plant than the man in the moon,” Aubrey said.
The citation originally included a $38,000 fine, he said.
“They went in a back room and came back and said, ‘We’ll settle for 18 (thousand). But I said, ‘I can’t sign this because it’s not true.’ … That was my first dealing, I knew things were not going to go well with the DEP.”
Aubrey eventually paid the $18,000 to get the permit process restarted.
Aubrey said DEP also told him he had to be on a water management plan. He disagreed, telling the DEP officials, “No I don’t. I’m zero discharge here.”
He appealed that to Harrisburg, and a week-and-a-half later was told he was correct, but he was also informed his energy producers had to have a water management plan. Aubrey also challenged that.
“They’re bringing dirty water. I’m cleaning it and giving it back to them,” he said he argued to DEP. “I’m not putting anything into the commonwealth’s rivers. I’m not taking anything out of the rivers. I’m taking dirty water and giving it back to them for reuse,” he said.
Another two weeks went by before, according to Aubrey, Harrisburg again told him he was correct.
“I said, ‘Send me that in writing, but do you see what you folks did to me? You shut me down for 3ﾽ weeks at $5,000 a day.”
Aubrey said DEP later required a slurry test of sulfates and metals precipitated from the wastewater. He said the slurry had already been tested by Advanced Waste, a New Castle company allowed to accept slurry for disposal under the terms of the plant’s permit. The slurry test came back fine, Aubrey said, but DEP next required a cake test (a dried form of the slurry). Those tests caused the plant to be shut down for another 45 days.
The plant kept taking water in during the shutdown periods when it could not send cleaned water out and the tanks became contaminated, Aubrey said. When he tried to ship the water to Ohio for disposal in injection wells, DEP officials told him he did not have a transfer permit.
Aubrey again disagreed, contending he was not transferring the water for other uses, only sending it for disposal. And, he said he told DEP, his permit allowed him to dispose of the residual waste at sites other than Advanced Waste.
“I was shut down again,” Aubrey said, and that time he lost the support of his investors. “We were only open two weeks of the entire period, June to September.”
While the plant was idled by DEP, lightning hit a transformer during a heavy rainstorm and the plant’s sump pumps did not work. Some of the treated water (containing concentrated salts) flowed out of the containment area and turned some grass brown.
“Not much different than if you salted our roads in the winter,” Aubrey said.
He’s unsure about DEP’s claim there are still 1 million gallons of water on the site.
“I was out of the picture since September, but I would say all the water that was in there would be treated but it would have chlorides in it. It would be very salty water,” he said.
The Kay Arena treatment plant’s survival was also impacted by the fact that drilling of conventional natural gas wells has fallen off significantly as natural gas prices fell.
“Everybody moved their rigs to Ohio,” Aubrey said, and to other areas with “wet gas” — natural gas with premium value because it contains more ethane, propane, butane and pentanes. But production companies still have “dirty water, flowback water, coming back from all the wells that were already drilled,” Aubrey said. “They had to take that water somewhere.”
To save trucking expenses, production companies were taking their flowback to the Kay Arena plant.
“So we were just holding water,” Aubrey said. “Then when we hit capacity, we couldn’t take any more. But we filled all those tanks up with people bringing us water but not taking it back because they weren’t drilling so they couldn’t use the water.”
Aubrey said he has not been contacted by DEP and has had no control of what has been done at the treatment plant since September.
DEP attorneys, he said, agreed with the $1 million bond he posted before the plant was permitted.
“They made me file that bond based on the plant being full. So, that’s what happened. The plant’s full,” he said.
Aubrey is now concentrating on establishing another water treatment plant — which he said will have no residual waste — in eastern Ohio to serve companies drilling wet gas. He anticipates it will be operational by early winter.
He also expects the natural gas drilling industry to rebound as the price of gas goes back up.
“You’ll see everything move again,” he predicted. “I might come back into Pennsylvania. It’s my home state. I’d like to see it take advantage of this kind of (water treatment) technology because it did nothing but good for the environment. It’s a green technology. It’s better than shooting 800,000 bucks worth of chemicals down each hole and that contamination coming back up and figuring out what to do with it.”