Entrepreneur hopes to make money purifying wastewater from gas drilling

Marcellus Shale gas wells have proven to be prodigious producers not just of natural gas, but of toxic wastewater, too.

Ted Leisenring thinks he can make money off both.

Leisenring, 57, a Berwyn businessman, is cooking up a project to build a power plant to generate electricity by burning Marcellus gas, and then use the plant's heat to purify wastewater from the hydraulic fracturing process.

"This is a no-discharge solution for frack water," said Leisenring, whose venture is called Marcellus Power Solutions L.L.C.

Leisenring joins a crowd of entrepreneurs with schemes to treat or dispose of the shale-drilling wastewater, which is laden with salty compounds, toxic metals, and some radioactive particles disgorged from the earth during fracking. Wastewater disposal has become a critical environmental challenge of shale-drilling, which has unlocked vast new reserves of fossil fuels across the nation.

Michael Krancer, Gov. Corbett's secretary of the Department of Environmental Protection, in April ordered Marcellus drillers to stop sending wastewater to 16 plants that discharge inadequately treated waste into Pennsylvania's rivers. Katherine Gresh, DEP's spokeswoman, said the industry appeared to have complied by the May 19 deadline and lauded the "dramatic sea change" in disposal practices.

It will become clearer later this month when drillers file semiannual disposal reports on where the wastewater has been diverted since the DEP's ban went into effect. Leisenring will study the reports, because those waste streams represent potential cash streams for his plan.

The industry says most wastewater is being recycled by mixing it with fresh water to hydraulically fracture new wells. Before it is reused, the wastewater is minimally treated to remove some metals and solids, but not the salty chlorides, so it cannot be discharged into streams.

Not all is recycled. The Pittsburgh Tribune-Review reported last week that Ohio environmental officials are seeing an upswing in Pennsylvania wastewater being trucked to licensed disposal wells in the Buckeye State, an expensive solution that requires fleets of tanker trucks.

Some is also being sent to Eureka Resources L.L.C., a Williamsport plant that is Pennsylvania's only facility equipped to purify the waste to meet the DEP's new disposal standards, which went into effect last year.

"Our guys are scrambling to keep up," said Daniel J. Ertel, the owner of Eureka Resources.

The treatment method used at the Eureka Resources plant is similar to that proposed by Leisenring. Both incorporate a thermal process to boil the wastewater, concentrating the salts, heavy metals, and solids while producing a distilled water that meets standards and can be discharged into waterways.

The Eureka plant produces a concentrated waste brine that needs to be trucked to disposal wells in other states like Ohio, where deep rock formations can absorb and trap the waste. Pennsylvania's deep geology is unsuitable for wastewater wells, which is why shale drillers turned to the now-outlawed use of sewage treatment plants.

Leisenring's power plant would completely evaporate the water, producing a solid, cakey waste that could be disposed of in landfills.

Leisenring is no dilettante when it comes to cogeneration plants, which achieve higher efficiency than conventional power plants by using the waste heat from electricity generation for a secondary industrial purpose.

Leisenring was formerly a project manager for Westmoreland Energy, the power-generation subsidiary of Westmoreland Coal Co. Westmoreland Coal was a venerable Philadelphia natural resources company that moved to Colorado in 1995. Leisenring's father, also named Ted, was formerly Westmoreland's chairman and chief executive.

Leisenring assembled the Marcellus Power Solutions team largely from colleagues who worked together at Westmoreland, which built its last power plant in 1995.

"We have not seen anybody else come in with a cogeneration idea, producing power and evaporating wastewater," Leisenring said. "It's more complex. You have to figure out how to sell the power. It takes a power development team to do that."

Leisenring estimates a seven-megawatt cogeneration plant would cost $13 million and take two years to build, and he says the Marcellus market can support five plants. But so far, no natural gas drilling companies or venture capitalists have stepped forward.

"Right now we're not selling this as a service we could provide to anybody immediately," he said. "Drilling companies look for immediate fixes. They typically don't want to make a long-term solution."

Some industry experts question the need for many expensive thermal evaporation plants since most wastewater is being recycled and does not require such a high degree of purification.

But Leisenring says that more treatment capacity will be needed as Marcellus drilling expands - more than 20,000 wells are projected to be drilled by 2020, up from 3,000 wells currently.

While a well produces an initial gush of wastewater after it is fractured, all wells produce a constant trickle of wastewater for years after the drilling is completed. Leisenring believes that "produced" water, which is collected in tanks on the surface and has a higher concentration of contaminants than the initial flowback, will need more sophisticated treatment.

"That's the market that's ideal for us because our plants can totally evaporate that water, pull all the water out, and produce solids and water that can be put back in the river," he said.