YOUNGSTOWN, Ohio -- The Buckeye Water District in Wellsville was enjoying a
seven-month windfall of sales to the tune of $24,000 per month by selling water
to energy giant Chesapeake Energy Corp. at $15 per thousand gallons. Then in
May, Chesapeake approached the Buckeye board of directors with an ultimatum:
either lower the price to $5 per thousand gallons, or lose the business for
good.
“The board told them ‘No,’ ” says Buckeye Water District manager Al DeAngelis. “We charge our residential customers $10.17 per thousand. It wouldn’t have been fair to them.”
The board researched the prices other water districts were commanding in other regions, DeAngelis says, especially in southwestern New York and northern Pennsylvania, where they were getting $16 per thousand gallons. “We were the first guys on the block with an agreement here,” he says.
Water has become a precious, much sought commodity for energy companies as oil and gas exploration accelerates in the Utica shale in eastern Ohio. Giant energy companies such as Chesapeake require between three million and six million gallons of water to hydraulically fracture a single well.
The process involves injecting water, sand and a smattering of chemicals under pressure into the well so it can crack open tight shale formations and release natural or wet gas trapped for millions of years.
Since the Buckeye Water District stopped selling water to Chesapeake, DeAngelis says, the company has opted to secure contracts with private owners of lakes and ponds while also procuring water at no cost from streams and creeks.
“They’re running a lot of trucks,” DeAngelis observes. “Where exactly they’re getting their water from, I don’t know.”
The practice has engendered new concerns from opponents of hydraulic fracturing, who are worried that big corporations are not only poisoning water supplies with chemicals, but also depleting the resource.
Youngstown resident Lynn Anderson was dismayed to learn that a brine truck could simply pull up to a city fire hydrant, hook its hose to the coupling, and fill its tank full of city water – water that would be used for local oil and gas operations.
She was even more troubled to learn that the city had no mechanism in place to monitor just how much water was being drawn from the hydrant. For all the water department knew, Anderson says, these companies could be helping themselves to thousands of gallons more than they’re entitled to.
“The water department said that they trusted them,” Anderson says, “that they didn’t monitor it.”
Anderson, an environmental activist who lives near Mill Creek Park on the west side of Youngstown, believes the oil and gas industry poses a serious threat to the availability of clean water, especially during periods of dry weather and drought.
Not only are these companies polluting water supplies through hydraulic fracturing, she argues, they’re also consuming vast quantities of water that, as of now, is not being recycled through the ecosystem.
“There’s the danger of these companies sucking water out of our streams, lakes and creeks,” she says. “We’ve got to be vigilant and protect our water.”
Citizen activists such as Anderson fear these companies – both large and small – pose a long-term risk to the environment and are putting pressure on communities to sell them water.
One of Anderson’s friends and another woman in early July witnessed a brine truck employed by Bocor Holdings LLC of Canton filling up from a hydrant at the corner of McGuffey Road and state Route 616. The two, out scouting the McGuffey Wildlife Preserve, were disturbed when they also found out that a natural gas well was being drilled toward the back of that land.
Anderson and the others contacted the Youngstown Water Department, inquired about the city’s contracts with oil and gas companies and requested that meters be placed on the hydrants being used so that the city could better monitor water consumption.
“By Friday, July 13, the department said that those hydrants would have meters on them,” Anderson says. “We’re interested in seeing the outcome of it.”
According to records, Youngstown this year entered into two contracts with oil and gas companies allowing them to use city water directly from two hydrants. Bocor was awarded a permit to use 80,000 gallons from the McGuffey hydrant from June 20 through Aug. 20. Bocor provided a one-time payment of $481.80, documents state.
Another company, Everflow Eastern of Canfield, was granted a permit to draw 4,000 gallons of water from a hydrant at 5611 Gilbert Drive in January. It paid $136.00 for the water, records show.
These charges reflect standard bulk rates that the city bills industrial users, and these two companies have contracted with the city for decades, says Gene Leson, chief engineer at the city water department.
“We sell bulk water to a multiple of companies,” Leson relates. “If it isn’t available, we sell a fire hydrant permit.” A homeowner who wants to fill a swimming pool, for example, can obtain a permit, he says.
He says that Bocor and Everflow Eastern Partners L.P. have been doing business with the city for decades, but in light of the recent concerns about accountability, Leson thought it prudent to monitor the hydrants. “Now, it’s being metered,” he says. “We read the meter on the hydrant and then process a bill.”
Anderson and 16 others have signed a petition and have called on Youngstown Mayor Chuck Sammarone to terminate sales of city drinking water to oil and gas companies since “the pollutants they add are not able to be processed out by water treatment plants and this water is rendered ‘unrecoverable,’ ” the petition reads.
Some of the larger oil and gas companies are beginning to use new fracking techniques such as foam or propane, which reduces the quantity of water needed to hydraulically fracture a well. Moreover, Chesapeake has started to recycle water at some of its well sites, and operates a recycling station in Carroll County.
Still, most of the wastewater is disposed of in injection wells scattered across Ohio. Once the water is “stored,” it cannot be recovered.
But most water suppliers believe there’s plenty available to serve energy companies and residents, even during dry spells.
“We’re not concerned about drought or the impact of the industry,” says Tom Holloway, director of the Mahoning Valley Sanitary District. MVSD supplies treated water to the cities of Youngstown and Niles and the village of McDonald from the Meander Reservoir. The reservoir level is down just more than seven inches, not nearly enough to constitute concern.
MVSD is yet to secure an agreement with an energy company, but its board was to hear a proposal from a representative of Consol Energy Corp. July 27, Holloway reports. “It’s a matter of convenience for a lot of these drillers,” he says, many of which want to purchase water from nearby sources.
Consol is drilling a well in Ellsworth Township in Mahoning County and another in Vienna Township in Trumbull County.
Other water districts are taking time to pause before allowing the sale of water to oil and gas drillers.
One of these districts is the Muskingum Watershed Conservancy, which includes several sources in eastern Ohio such as Tappan Lake, Atwood Lake, Clendening Reservoir and Leesville Reservoir.
The watershed district has conducted one water sale to Gulfport Energy, but has placed other potential sales on hold until the U.S. Geological Survey finishes a study on how much excess water is available for use.
Others are welcoming the prospect of more business, and are taking measures to prepare for what could be a major lift for water sales in the region.
The Columbiana County Port Authority recently entered into an agreement with Aqua Terra Asset Management LLC, which would allow the company to act as an agent to sell water treated by the city of East Liverpool to energy companies at $9 per thousand gallons.
Under the agreement, East Liverpool would collect $6.46, the port authority, $1.50, and Aqua Terra $1. Drivers are able to fill their trucks at a hydrant on property where the port authority’s offices sit.
The city has an excess capacity of two million gallons per year it can sell. Should additional supply be necessary, East Liverpool could also sell untreated water directly from the Ohio River at $5 per thousand gallons, similar to an agreement the city of Steubenville has in place.
The city of Warren, also expecting to capitalize from the sale of its water to energy companies, is making preparations to accommodate the emerging shale industry.
“We’ve been approached from a couple of companies at this point,” reports Robert Davis, director of utility services for the city of Warren. “Right now, we don’t have any contracts.”
Anticipating what could become a long-term, vibrant source of business over the next several years, the city of Warren is slated to invest more than $100,000 toward expanding its fill stations at its water filtration plant in Cortland.
The improvements would include infrastructure upgrades such as road widening, and the addition of new fill stations capable of handling multiple brine trucks.
“We do have some in use,” Davis reports. “So we’re ready to sell when they’re ready to buy.”
Rates would hover between $7 and $10 per thousand gallons, Davis says, but any rate would also depend on just how much water is being used. “We think in the next couple of months, we could solidify some contracts.”
Business derived from the oil and gas industry could command as much as $300,000 a year, Davis says.
The filtration plant processes about 13 million gallons a day, and Davis expects to use an additional one million for oil and gas drillers. The plant, however, has the capacity to process 22.8 million per day, so there is excess capacity.
Warren draws its water from Mosquito Creek Reservoir, and Davis says, it is monitoring drought conditions. “Right now, we’re in a drought watch. We’re about 3 feet, 4 inches below the summer pool.”
Should the water level fall another three to four feet, a drought warning would be issued, Davis reports. “Right now we’re OK, but we do need some rain.”
Keith Fuller, director of corporate development at Chesapeake, says his company takes into consideration low water levels before submitting applications to the Ohio Department of Natural Resources for withdrawal permits. Chesapeake hauls water by truck to well sites, runs pipelines directly to the well from freshwater sources, and purchases water from municipalities, he says.
“Intervals of low river flows are an annual reality,” Fuller says. “Chesapeake performs impact analyses prior to applying for permits, and we employ multiple monitoring systems to confirm that water is withdrawn only from sites where flow rates remain above their permitted minimums.”
Fuller says these restrictions are often in place during the summer months, when water levels are low. As such, Chesapeake draws most of its water during high-flow months, and then stores that water for future use. “Preparations in expectation of these restrictions ensure Chesapeake’s operations aren’t affected and that there are no impacts on the waterways,” Fuller says.
According to data provided by ODNR, Ohio consumes 11.7 billion gallons of water per day, the vast majority used by industry, especially electric power plants.
Under Ohio law, any industry using 100,000 gallons per day must register with ODNR. Current demand is not adversely affecting the state’s water supplies, says ODNR spokeswoman Heidi Hetzel-Evans.
“Currently, there have been no new water withdrawal registrations by oil and gas operators,” Hetzel-Evans says. Provisions in SB 315, the new law signed by Gov. John Kasich that places new regulations on drilling activity, now requires operators to provide their water source, rate and flow in the permitting process, she says.
Still, these measures offer little consolation to concerned citizens such as Anderson, who have widely complained that government isn’t doing enough to protect its most valuable resources.
“The state has cut back on anything that protects the environment, but they’ve ramped up anything that harvests timber or oil and gas in the state parks,” Anderson says. “How logical is that? To me, it’s frightening.”
“The board told them ‘No,’ ” says Buckeye Water District manager Al DeAngelis. “We charge our residential customers $10.17 per thousand. It wouldn’t have been fair to them.”
The board researched the prices other water districts were commanding in other regions, DeAngelis says, especially in southwestern New York and northern Pennsylvania, where they were getting $16 per thousand gallons. “We were the first guys on the block with an agreement here,” he says.
Water has become a precious, much sought commodity for energy companies as oil and gas exploration accelerates in the Utica shale in eastern Ohio. Giant energy companies such as Chesapeake require between three million and six million gallons of water to hydraulically fracture a single well.
The process involves injecting water, sand and a smattering of chemicals under pressure into the well so it can crack open tight shale formations and release natural or wet gas trapped for millions of years.
Since the Buckeye Water District stopped selling water to Chesapeake, DeAngelis says, the company has opted to secure contracts with private owners of lakes and ponds while also procuring water at no cost from streams and creeks.
“They’re running a lot of trucks,” DeAngelis observes. “Where exactly they’re getting their water from, I don’t know.”
The practice has engendered new concerns from opponents of hydraulic fracturing, who are worried that big corporations are not only poisoning water supplies with chemicals, but also depleting the resource.
Youngstown resident Lynn Anderson was dismayed to learn that a brine truck could simply pull up to a city fire hydrant, hook its hose to the coupling, and fill its tank full of city water – water that would be used for local oil and gas operations.
She was even more troubled to learn that the city had no mechanism in place to monitor just how much water was being drawn from the hydrant. For all the water department knew, Anderson says, these companies could be helping themselves to thousands of gallons more than they’re entitled to.
“The water department said that they trusted them,” Anderson says, “that they didn’t monitor it.”
Anderson, an environmental activist who lives near Mill Creek Park on the west side of Youngstown, believes the oil and gas industry poses a serious threat to the availability of clean water, especially during periods of dry weather and drought.
Not only are these companies polluting water supplies through hydraulic fracturing, she argues, they’re also consuming vast quantities of water that, as of now, is not being recycled through the ecosystem.
“There’s the danger of these companies sucking water out of our streams, lakes and creeks,” she says. “We’ve got to be vigilant and protect our water.”
Citizen activists such as Anderson fear these companies – both large and small – pose a long-term risk to the environment and are putting pressure on communities to sell them water.
One of Anderson’s friends and another woman in early July witnessed a brine truck employed by Bocor Holdings LLC of Canton filling up from a hydrant at the corner of McGuffey Road and state Route 616. The two, out scouting the McGuffey Wildlife Preserve, were disturbed when they also found out that a natural gas well was being drilled toward the back of that land.
Anderson and the others contacted the Youngstown Water Department, inquired about the city’s contracts with oil and gas companies and requested that meters be placed on the hydrants being used so that the city could better monitor water consumption.
“By Friday, July 13, the department said that those hydrants would have meters on them,” Anderson says. “We’re interested in seeing the outcome of it.”
According to records, Youngstown this year entered into two contracts with oil and gas companies allowing them to use city water directly from two hydrants. Bocor was awarded a permit to use 80,000 gallons from the McGuffey hydrant from June 20 through Aug. 20. Bocor provided a one-time payment of $481.80, documents state.
Another company, Everflow Eastern of Canfield, was granted a permit to draw 4,000 gallons of water from a hydrant at 5611 Gilbert Drive in January. It paid $136.00 for the water, records show.
These charges reflect standard bulk rates that the city bills industrial users, and these two companies have contracted with the city for decades, says Gene Leson, chief engineer at the city water department.
“We sell bulk water to a multiple of companies,” Leson relates. “If it isn’t available, we sell a fire hydrant permit.” A homeowner who wants to fill a swimming pool, for example, can obtain a permit, he says.
He says that Bocor and Everflow Eastern Partners L.P. have been doing business with the city for decades, but in light of the recent concerns about accountability, Leson thought it prudent to monitor the hydrants. “Now, it’s being metered,” he says. “We read the meter on the hydrant and then process a bill.”
Anderson and 16 others have signed a petition and have called on Youngstown Mayor Chuck Sammarone to terminate sales of city drinking water to oil and gas companies since “the pollutants they add are not able to be processed out by water treatment plants and this water is rendered ‘unrecoverable,’ ” the petition reads.
Some of the larger oil and gas companies are beginning to use new fracking techniques such as foam or propane, which reduces the quantity of water needed to hydraulically fracture a well. Moreover, Chesapeake has started to recycle water at some of its well sites, and operates a recycling station in Carroll County.
Still, most of the wastewater is disposed of in injection wells scattered across Ohio. Once the water is “stored,” it cannot be recovered.
But most water suppliers believe there’s plenty available to serve energy companies and residents, even during dry spells.
“We’re not concerned about drought or the impact of the industry,” says Tom Holloway, director of the Mahoning Valley Sanitary District. MVSD supplies treated water to the cities of Youngstown and Niles and the village of McDonald from the Meander Reservoir. The reservoir level is down just more than seven inches, not nearly enough to constitute concern.
MVSD is yet to secure an agreement with an energy company, but its board was to hear a proposal from a representative of Consol Energy Corp. July 27, Holloway reports. “It’s a matter of convenience for a lot of these drillers,” he says, many of which want to purchase water from nearby sources.
Consol is drilling a well in Ellsworth Township in Mahoning County and another in Vienna Township in Trumbull County.
Other water districts are taking time to pause before allowing the sale of water to oil and gas drillers.
One of these districts is the Muskingum Watershed Conservancy, which includes several sources in eastern Ohio such as Tappan Lake, Atwood Lake, Clendening Reservoir and Leesville Reservoir.
The watershed district has conducted one water sale to Gulfport Energy, but has placed other potential sales on hold until the U.S. Geological Survey finishes a study on how much excess water is available for use.
Others are welcoming the prospect of more business, and are taking measures to prepare for what could be a major lift for water sales in the region.
The Columbiana County Port Authority recently entered into an agreement with Aqua Terra Asset Management LLC, which would allow the company to act as an agent to sell water treated by the city of East Liverpool to energy companies at $9 per thousand gallons.
Under the agreement, East Liverpool would collect $6.46, the port authority, $1.50, and Aqua Terra $1. Drivers are able to fill their trucks at a hydrant on property where the port authority’s offices sit.
The city has an excess capacity of two million gallons per year it can sell. Should additional supply be necessary, East Liverpool could also sell untreated water directly from the Ohio River at $5 per thousand gallons, similar to an agreement the city of Steubenville has in place.
The city of Warren, also expecting to capitalize from the sale of its water to energy companies, is making preparations to accommodate the emerging shale industry.
“We’ve been approached from a couple of companies at this point,” reports Robert Davis, director of utility services for the city of Warren. “Right now, we don’t have any contracts.”
Anticipating what could become a long-term, vibrant source of business over the next several years, the city of Warren is slated to invest more than $100,000 toward expanding its fill stations at its water filtration plant in Cortland.
The improvements would include infrastructure upgrades such as road widening, and the addition of new fill stations capable of handling multiple brine trucks.
“We do have some in use,” Davis reports. “So we’re ready to sell when they’re ready to buy.”
Rates would hover between $7 and $10 per thousand gallons, Davis says, but any rate would also depend on just how much water is being used. “We think in the next couple of months, we could solidify some contracts.”
Business derived from the oil and gas industry could command as much as $300,000 a year, Davis says.
The filtration plant processes about 13 million gallons a day, and Davis expects to use an additional one million for oil and gas drillers. The plant, however, has the capacity to process 22.8 million per day, so there is excess capacity.
Warren draws its water from Mosquito Creek Reservoir, and Davis says, it is monitoring drought conditions. “Right now, we’re in a drought watch. We’re about 3 feet, 4 inches below the summer pool.”
Should the water level fall another three to four feet, a drought warning would be issued, Davis reports. “Right now we’re OK, but we do need some rain.”
Keith Fuller, director of corporate development at Chesapeake, says his company takes into consideration low water levels before submitting applications to the Ohio Department of Natural Resources for withdrawal permits. Chesapeake hauls water by truck to well sites, runs pipelines directly to the well from freshwater sources, and purchases water from municipalities, he says.
“Intervals of low river flows are an annual reality,” Fuller says. “Chesapeake performs impact analyses prior to applying for permits, and we employ multiple monitoring systems to confirm that water is withdrawn only from sites where flow rates remain above their permitted minimums.”
Fuller says these restrictions are often in place during the summer months, when water levels are low. As such, Chesapeake draws most of its water during high-flow months, and then stores that water for future use. “Preparations in expectation of these restrictions ensure Chesapeake’s operations aren’t affected and that there are no impacts on the waterways,” Fuller says.
According to data provided by ODNR, Ohio consumes 11.7 billion gallons of water per day, the vast majority used by industry, especially electric power plants.
Under Ohio law, any industry using 100,000 gallons per day must register with ODNR. Current demand is not adversely affecting the state’s water supplies, says ODNR spokeswoman Heidi Hetzel-Evans.
“Currently, there have been no new water withdrawal registrations by oil and gas operators,” Hetzel-Evans says. Provisions in SB 315, the new law signed by Gov. John Kasich that places new regulations on drilling activity, now requires operators to provide their water source, rate and flow in the permitting process, she says.
Still, these measures offer little consolation to concerned citizens such as Anderson, who have widely complained that government isn’t doing enough to protect its most valuable resources.
“The state has cut back on anything that protects the environment, but they’ve ramped up anything that harvests timber or oil and gas in the state parks,” Anderson says. “How logical is that? To me, it’s frightening.”
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