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Gas producers partner with utilities to extend public water lines

Seven years ago, officials at Pennsylvania American Water debated whether the company should provide water to the new shale gas industry taking hold in the state.

“In the early days, there were a lot of issues around water quality and water quantity,” Senior Vice President Kathy Pape said last week during a gas industry conference in Philadelphia. “There were concerns that the bad reputations of shale gas drillers would rub off on us. We’re very protective of our reputation.”

Not only did the company start serving the industry, it’s among several water utilities that have partnered with gas drillers and producers on multimillion-dollar projects.

Some gas companies working in the Marcellus and Utica shales are paying to extend public water lines into rural areas to provide the millions of gallons needed for hydraulic fracturing, or fracking, of their wells, and in some cases building treatment plants as well.

Homes and businesses along the new water line routes can tap into public service, which will remain long after the drillers leave, and will host fewer water trucks on their roads.

“It’s a win-win-win,” said Jack Golding, manager of the Southwestern Pennsylvania Water Authority in Greene County, which teamed this summer with Colorado-based Vantage Energy on a $30 million project to build water mains and expand the facility that treats river water for use.

In related news, Antero Midstream to acquire water business for $1.05 bln.

“For us, this is a good deal. We get lines extended that would probably never get extended, and it gives us the ability to keep residential rates low,” he told the Tribune-Review.

Pape said Penn American now provides water to 10 percent of shale wells statewide and 75 percent of those in Butler County, the eighth-highest-producing county in the state with 282 shale wells.

“When you’re able to bring drinking water to areas that never, ever would have been able to afford it, it means all the difference in the world,” said state Sen. Scott Hutchinson, a Republican whose district includes half of Butler County.

Drillers set up temporary, above-ground lines that lead to drill sites from buried mains and can be removed when fracking ends, said Mike Endler, a vice president at State College-based Rex Energy. He outlined two line extensions along Whitestone Road and Route 19.

The two projects, which totaled more than $6 million, provide steady and cheaper water service with increased pressure to 31 wells while opening potential service to more than 100 homes along the way. Penn American has sold 460 million gallons of water to Rex for 88 wells over six years.

“The improved operational efficiency is great. We’re able to have a known quantity of water and a quality of water, so we can plan out the business a lot better,” said Rob Heinle, an engineering manager for Fort Worth-based XTO Energy, which extended 6 miles of line to serve 85 wells in Summit. The combined $4 million in projects could connect more than 180 customers along the way.

Removing large, expensive water trucks from the road makes both drillers and neighbors happy.

“If there is a complaint we get most often, it’s that truck traffic,” said Al Schopp, regional vice president for Denver-based Antero Resources, whose water business includes 150 miles of lines and which last month announced a $350 million project to build a wastewater treatment plant in West Virginia.

Building water lines eliminated 480,000 water truck trips last year, he said.

The company last week moved water operations to an affiliate so it can contract with fellow producers to handle their water. Treated water would be returned to drill sites for reuse instead of injection wells for disposal.

This article was written by DAVID CONTI from The Pittsburgh Tribune-Review and was legally licensed through the NewsCred publisher network.

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