Need to return call by / at/between and

. Signature:

___________________________ Project No.: 0172.09.038.082 Page 1 of 3

Project Name: Shale Gas

CBI?

Yes

No TELEPHONE CALL RECOR D Incoming Outgoing Date: 10/14 /11 Time: 10:30 am

pm

Company Name: 212 Resources ERG Staff Name: Brent Ruminski

Contact Name: Barry Mertz Contact Phone Number: 435

- 640

- 7190

General Subject: 212 Resources VACOM T echnology.



### TOPICS DISCUSSED AND ACTION TAKEN

I c alled 212 Resources HQ at 4:15 PM on 9/26/11 and asked the operator to talk to someone about their crystallization system

. The o perator redirected me to call Brad, an Engineer

, at 248

- 417

- 5779.

I c alled Brad at 4:30 PM on 9/26/11 and left a voicemail with my contact information and a brief statement of

wh y I called

.

I c alled 212 Resources HQ again on 10/14/11 at 10:30 AM to follow up since I never got a call back from Brad

. The operator gave me a cell phone number of Barry Mertz at (435

- 640

- 7190).

I c alled Barry Mertz on 10/14/11 at 10:45 AM. I explained I work for ER G and we are under contract with the U.S. EPA to write a report of wastewater treatment technologies for the natural gas industry. The conversation lasted just under an hour it included the following topics:

System Design Overview: The VACOM system is a mechanical vapor compression (MVR) evaporation/condensation technology that can treat up to 2,500 barre ls per day of wastewater. The entire system includes an oil/water, separator, “conventional” filtration, and the main MVR unit. The e ntire treatment train is mobile and it may take up to two weeks to become fully operational once it is delivered on site.

The main unit operation includes a circulation pump that circulates the concentrated brine/influent wastewater through a shell and tube heat exchanger at approximately 4 to 5 psi gauge pressure ( 18

– 19 absolute psi). The water is kept under pressure so t hat the wastewater does not boil. The wastewater temperature will increase to about 230°F. He explained that this is done for two reasons:

1. To r educe scaling within the pipes, pumps, and heat exchanger ; s olids will not precipitate and form scale if boiling does not occur ; and

2. To flash t he water as it enters the main vessel ; t he sudden drop in pressure from the pipe to the vessel allows a portion of the water to flash into water vapor. Barry clarified that the pressure within the vessel is not actually less t han atmospheric pressure

, but rather maintained at atmospheric pressure by

blowers /vents

.

Brine Characteristics and Water Recovery Percent : Barry spoke how the water recovery percent is affected by the influent TDS concentration and the supersaturation TDS concentration of the brine. The su persaturation

TDS concentration of brine is usually around 300,000 to 350,000 mg/L. Table 1 gives examples to illustrate

how as influent TDS concentrations increase, the w ater recovery percent decreases. This table assumes that supersaturation concentration is 300,000 mg/L TDS.Need to return call by / at/between and

. Signature:

___________________________ Influent TDS (mg/L) Percent Water Recovery (%)

50,000 83

100,000 67

150,000 50

Energy Usage : The unit is powered by a generator, which may run on wellhead gas or diesel. If possible, the unit can also be powered by electricity from the grid. Electrical costs range from 30

- 50 cents per barrel of

treated wastewater

.

Costs: Barry com mented that 212 Resources is well known for their system and services. Typically, t he cost is in the range of $ 3 to $ 4 per barrel (just a ballpark number) of wastewater treated

. He said that customers can either buy or rent the unit.

1. The rental costs include onsite operators from 212 Reso urces and it is on a dollar per barrel basis. He

clarified that there is no charge to the customer until treated wastewater is generated (i.e.

, no major mobilization fee).

2. To buy the unit, a typical agreement will be that 212 Resources offers onsite “support” for a period of time until the customer feels comfortable operating the unit. They still offer support after this period (e.g., maintenance problems). This suggests that the units are too complex to operate without sufficient training.

Pe rspective on Industry: A portion of the conversation was focused on the industry in terms of wastewater management. He pointed out that operators have three options to manage their wastewater (his customers are in Western Colorado and they are shale gas op erators).

1. Saltwater (Deep) Well Injection.

2. Kill fluid

.

3. Reuse or Recycle. Wastewater for reuse is often treated thro ugh conventional methods such as chemical precipitation and filtration. T his only reduces the pollutants , unlike RO and evaporation/distilla tion.

Barry commented on a wastewater treatment technology called “snow blowing.” He says this has been one of 212 Resource’s biggest competitors. It occurs at large evaporation ponds (he thinks in Utah) where high TDS wastewater is simply blown over the pon d to increase the surface area.

Another big competitor to 212 Resources are new chemical additives ( e.g.
, scale inhibitors) that chemical companies offer to fracking operators. Barry sa id that these chemicals are becoming more effective allowing higher TDS wastewater to be reused without extensive treatment . This decreases the demand for technologies like RO and evaporation/condensation.

Barry commented on reuse concentration criteria. He says you cannot “cookie cut” this industry. Every company is diffe rent in terms of criteria. He says some companies have a fresh water only policy and some will use high TDS wastewater (gave an example range of 30,000 to 50,000 mg/L).Need to return call by / at/between and

. Signature:

___________________________ Perspective on Crystallization Technology: Barry does not think Crystallization will h ave any major role in treating natural gas wastewater. He thinks if it does

, it would happen in P ennsylvania because of how strict regulations are. He pointed out the following disadvantages to the technology :

1. There may not be a brine solution but the soli d crystals must be kept dry or they will turn into a brine.

2. Handling the solids is not as easy as it sounds. Using “roll off” dumpsters is not efficient.

3. There are additional energy costs. He estimated the addition al cost to be $ 1 to $ 3 per barrel (just a ballpark number) of wastewater treated over evaporation/condensation treatment

.

4. There is a lot of “talk” of reuse of the solids but he doesn’t think it would be possible on any kind of large scale. He heard of a case or two where they solids were sold to another industry but that is rare

. He

also commented that no solid would ever be used for road salt because of the constituents of the solids (e.g., strontium, barium).

Other: At one point we talked about the difference between flowback and produced water. He went on to say that based on what is popular in industry; his company uses time to differentiate the two. He stated that flowback occurs in the first 30 days and produced water flows after the first 30 days of fracturing.