Wednesday, February 1, 2012

Ohio Tries to Escape Fate as a Dumping Ground for Fracking Fluid

Bloomberg Businessweek
Feb 01, 2012
By Mark Niquette

Feb. 1 (Bloomberg) -- The millions of gallons of chemical- laced wastewater that fracking produces must flow somewhere, and Ohio is trying not to be that place.

The oil and natural-gas drilling boom spurred more permits for disposal wells there during the past two years than during the previous decade combined. The volume injected into them was on a near-record pace last year, according to the Department of Natural Resources, and more than half was from out of state. That included 92.6 percent of the water sent to a Youngstown well closed last year after 11 nearby earthquakes.

“We have become in Ohio the dumping ground for contaminated brine,”

state Representative Armond Budish, the House Democratic leader, said at a Jan. 26 forum in Columbus. “We didn’t prepare adequately for the potential for earthquakes and other environmental problems.”

Now, Ohio is considering tightening regulations governing wells in response to the temblors and seeking to stem out-of- state fluid shipments. It’s an example of the challenges U.S. states face as they try to enjoy hydraulic fracturing’s economic boost while avoiding its side effects.

Ohio’s situation highlights the tradeoff that may come with the technique of using chemical-laced water to bring forth natural gas and oil, said Glen Andersen, energy program director for the National Conference of State Legislatures in Denver. While states benefit from investment by companies including Chesapeake Energy Corp., Halliburton Co. and Vallourec SA, they also may contend with roads damaged by heavy equipment and concerns about polluted drinking water, he said.

Negotiating the Constitution

“It doesn’t necessarily mean there needs to be this tradeoff with environment versus energy extraction,”

Andersen said in a telephone interview. “It really comes down to the degree to which it’s regulated and whether those regulations are enforced.”

In Ohio, companies pay to operate disposal wells after they have been approved by the state, and brine haulers hired by drillers pay the companies to inject the fluid. The well owners pay a disposal fee to the state of 5 cents per barrel for brine originating in the state and 20 cents for out-of-state wastewater, according to the Ohio Natural Resources Department.

Republican Governor John Kasich said that while he’s not happy about the increasing volume of wastewater from neighboring states, the U.S. Constitution prohibits interference with shipments. He declined to speculate about what might be done.

Soaking It Up

“When people are using our things, and they could disrupt our ability to have progress here, we have to be concerned about it,” Kasich said in an interview in Columbus on Jan. 26. “We’re thinking about what we can do and not violate the interstate commerce clause.”

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