# Wunz Associates, LLC

Protecting the Water Environment

76 Heatherbloom Drive Lewisburg, PA 17837 | 814/574

- 6695 | chuck@wunz.com

August 20, 2015



### William J. Hall, CPG, Director
Shale Gas Innovation and Commercialization Center Ben Franklin Technology Partners 200 Innovation Blvd, State College, PA 16803

RE: Shale Gas Development

- Summary of Shale Gas Wastewater Treatment and Disposal
In Pennsylvania 2014

Dear Mr. Hall:

Thank you for this oppor tunity to update my 2012 report on shale gas wastewater production and

treatment with data from 2014. I found the effort to be very interesting and informative.

In 2014, about 1.8 billion gallons, 42,919,000 barrels, of wastewater was produced. That is a bout the same amount as was produced in 2011. Most of this was “produced” water, the water that comes from wells after they are put into production. In 2011 the greater fraction was “frac” water.

The investigations I conducted in completing this report lead me to conclude that the effort made in the
2008

- 2010 time frame by both regulators and the industry to recycle and not discharge shale gas wastewaters was amazingly successful. Now, five years after adoption of the 25 PA Code 95.10 regulations, almo st no wastewater is being discharged to surface waters, only about 1.1 percent, and very little is being disposed of by underground injection wells, about 7.9 percent. So, the industry, much to its credit, is recycling about 91 percent of the wastewater i t produces. Much credit also goes to the
members of the Water Resources Advisory Committee and the Department of Environmental Protection
Bureau of Water Standards staff who in 2009 worked diligently with the industry to craft the regulations
that hav e been so successful in promoting reuse.

I hope you will find this report satisfactory for your needs. I will be glad to answer any questions yo u might have.

Best wishes.

Very truly yours,

W unz Associates, LLC

E. Charles Wunz, P.E., BCEE

## Shale Gas Development

Summary of Shale Gas Wastewater Treatment and Disposal

In

Pennsylvania

2014

E. Charles Wunz, P.E., BCEE

August 20 , 2015

### Page 1 of 2 3 August 20, 2015

Introduction

This report updates the author’s May 2012 report entitled “ Marcellus Shale Gas Development

- A Summary of Marcellus Wastewater Treatment and Disposal ” which described the generators, sources, volumes, treatment, recycling, and ultimate fate of waters produced as a result of Marcellus Shale development. The 2012 Report utilized data from 2011. This report utilizes 2014 data.

In 2014 shale gas production activities in Pennsylvania resulted in a reported 42, 919 ,000 barrels (1, 802,598,000 gallons)

, said another way, 1.8 billion gallons of wastewater. Over one half of the volume , about sixty

- seven percent ( 67 %) was what is called produced water and about twenty

- nine pe rcent (2 9 %) was frac water. By far the largest amount of this wastewater , to the credit of the industry, was recycled for reuse in fracing activities.

In the original report, the content was exclusively focused on Marcellus shale development. Since 2011 U tica Shale has also been drilled in western Pennsylvania. Because the process of well development is similar
between the Utica and Marcellus formations 1 , they are considered to be similar in producing wastewater

. Therefore, the reference to “ Marcellus ” i n the previous version of this report has been removed in this update in favor of the words “shale”, “horizontal”, and “unconventional” which describe drilling in tight shale
formations.

The 2012 report also focused on the hot issue of the time, frac water , the water that flows back after a well is fraced. This report is more focused on all the wastewater produced from the drilling, fracing, and operation of shale gas wells and it addresses the trend that produced water will inevitably become a larger and l arger component of the total amount of water produced as frac water becomes proportionately less and less.

Recycling Rules!

Of the 1.8 billion gallons of wastewater reported to be produced, about 9 1 percent is recycled or stored for future recycling. Only about 162 million gallons are injected into deep geologic strata or discharged to surface

waters. Only 7.9 percent is discharged to underground injection and a much smaller amount, only about 1.1 percent is discharged to surface water. This may be the industry’s best state wide recycling effort anywhere in the country.

Trends

Reported w astewater production is static or slightly d eclining between 2011 and 2014. Much more water is being produced from operating wells (produced fluid or water) and less from fracing (frac fluid or water). The
then

- developing 2004 to 2009 business model for wastewater treatment has moved away from surf ace discharge which is no longer practiced except at two Pennsylvania locations and one each in West Virginia and
Ohio and toward recycling . Recycling is accomplished through the reuse of the frac water in the next frac. D ata

1 Technical details are different, but for this report they can be considered to be the same in the production of

wastewater.

### Page 2 of 2 3 August 20, 2015

show that the hauling of wes tern Pennsylvania waste water to permitted disposal wells in Ohio for disposal is a common practice
, but a distant second choice to recycling

.

In the future as the number of producing wells increase without a matching proportional increase in frac water needs, recycling treated wastewater to the next frac job will become more difficult . Recycling requires the demand for water, but the ratio of water demand to water production will be static or will decrease when proportionately fewer wells are being fraced and more wells are in production

. This assumes an alternative use of the water cannot be developed. Alternatives to recycling, whether increased transport to Ohi o’s disposal wells, development of disposal wells in Pennsylvania, distillation, evaporation, or treatment and surface water discharge will likely be implemented if recycling becomes more difficult as proportionate demand for recycled

water drops

.

Well De velopment 2

Well stimulation using fracing techniques injects large quantities ( about 4 to 10 million gallons) of water 3 into a newly drilled gas well under very high pressure , usually in a series of stages . The target zone geologic formation fractures ( cracks open ) and a “proppant” is injected with the water to keep the fractures open 4

. W hen the pressure is released “frac” water flow s back out of the well in a volume of about 15 to 30 percent of the water injected into the formation and the well continues to produce “production” water over its operating
life

. Later in this report the difference between frac water and production water is explained.

Well development activities and well operations actually produce a variety of liquid a nd solid wastes as well as
the aforementioned frac waters . They include wastewaters from drilling, grouting, testing, and completion operations
, production water, and from the installation of pipeline s conveying the gas from the well. The liquid wastes, excepting pipeline waters, are collectively the subject of this report.

The se shale gas waste waters may be mixed at the time of transport, treatment , reuse, and final disposal

. All of
these waste waters require some level of treatmen t prior to reuse 5 , final disposal 6 , or discharge. This Summary
of Shale Gas Wastewater Treatment and Disposal reports the handling of wastewaters resulting from shale gas development and the variety of practices employed in their handling

.
For the purposes of this report, the term “wastewater” means any waste which has not been discharged to the atmosphere and which is not a solid waste and has been reported in the data set analyzed to be a wastewater

. This definition includes wastewaters t hat are heavily laden with both dissolved and suspended solids. The dividing line between solid wastes and wastewater has been clarified by t he Pennsylvania Department of
Environmental Protection (DEP) to reflect the long established definition that solid waste passes the “paint

2 Well devel opment includes fracing for which there are several spellings. This report uses “frac” and “fracing” which is pronounced “fracking.”

3 In Midwestern Canada fracing using propane has been demonstrated. Volumes of water used depend in part on the length of the horizontal bore being fraced. Over time, the length of horizontal bores has increased.

4 Similar to timbers that support a mine shaft.

5 For some reuse, dilution with clean water is sufficient “treatment.”

6 Injection in Class 2 disposal w ells may require minimal treatment.

### Page 3 of 2 3 August 20, 2015

filter test 7 ” required for delivery of solid waste to a landfill

. In other words, wastewater include s any wastes that have sufficient free water in them to fail the paint filter test.

Shale Gas Wastewater Generation

Beginning wit h calendar year 2011 data, the DEP began to publish detailed summaries of the generation and handling of wastes generated by unconventional well drilling and operation s 8

. These data are as reported by the wastewater producers to DEP

. The DEP notes that the reliability of the data is not checked or guaranteed by DEP. The 2012 report analyzed data from the last six (6) months of 2011. This update examines 2014 data.
Th e data are posted at:

https://www.paoilandgasreporting.state.pa.us/publicreports/Modules/DataExports/DataExports.aspx

The data set examined for this report is the combined two 2014 data files (six months each) posted at the

a ddress above 9 . Each of the two files is an approximately 18,000 row comma delimited file with each row containing thirty

- two (32) data cells (about 576,000 cells in each file, when combined about 1,152,000 cells total). Each of the approximately 36 ,000 r ows in the two files describe a reported waste or wastewater transportation event which may a single partial truckload or an extended multi

- truckload event all being delivered to the same destination. The date of such activity is not memorialized in the d ata set, beyond occurring in the calendar year. About one fifth of the DEP data files contain information on solid waste. These reports were deleted and not considered in this report on wastewater production. After the deletion of solid waste, about 30, 000 rows of data remained for analysis.

With any huge self

- reporting activity, some individual reports are likely to be erroneous. For example, in the
data set one or two entries reflect delivery to facilities that are not permitted to receive wastes from unconventional wells; a few report the delivery of wastes to landfills in terms of barrels instead of tons

. These reporting errors are not considered to be significant except for what we note in the following paragraph

.
The largest reporting errors are associated with receiving facilities that hold or held both an NPDES discharge permit and WMGR 123 recycling permit. In one case, over one thousand deliveries are reported to Reserved Environmental Services (RES) operating under an NPDES permit. RES had an NPDES permit for discharge of shale gas wastewaters and storm water , but never constructed the facilities required to treat the shale gas wastewater to required levels for discharge

. It never discharged sha l e gas wastewaters. So, all of those reported deliveries w ere made to RES, but it is operating under its WMGR permit and is recycling, not discharging. We corrected the data based on this understanding. Deliveries to Eureka Standing Stone and Eureka Williamsport likely exhibit t he same confused permit reporting. We applied corrections based on
somewhat limited additional information. But with that said, the data represent the best picture of shale gas

7 EPA M ethod 9095B P aint F ilter L iquids T est , 2004.

8 In separate files, DEP reports the production of wastewater from conventional wells.

9 At the time of writing of this report. The content of the data files may chang e and the website may be updated without notice by DEP.

### Page 4 of 2 3 August 20, 2015

wastewater generation in Pennsylvania and the use of this origi nal data allows this Summary to be built on the actual reported data

, not upon the summaries of data completed by others . With the corrections applied the
data are believed to be very representative of wastewater movement and initial storage and treatment

.
Wastes are characterized in eight (8) waste type groups in the 2015 Revision of the DEP “ Oil and Gas Production and Waste Reporting Guide” 10

. They are 11 :

Produced Fluid: Water and/or formation fluids, including brine, recovered at the wellhead af ter the flowback period. This waste type must be reported in barrels. The Pennsylvania residual waste code for this waste type is 802.

Drilling Fluid Waste : Oil and gas drilling mud and other drilling fluids (other than fracing fluid and spent lubricant). This waste type must be reported in Barrels. The Pennsylvania residual waste code for this waste type is 803.

Fracing Fluid Waste : Oil and gas fracturing/stimulation fluid waste and/or flowback. Flowback is defined as the return flow of water, fracturing /stimulation fluids, and/or formation fluids recovered from the well bore of an oil or gas well within 30 days following:

the release of pressures induced as part of the hydraulic fracture stimulation of a target geologic formation, or until the well is p laced into production, whichever occurs first. This waste type must be reported in Barrels. The Pennsylvania residual waste code for this waste type is 804.

Basic Sediment : Oil and gas production storage impurities/sediment from produced oil at storage ta nk battery. This waste type must be reported in Barrels. The Pennsylvania residual waste code for this waste type is 807.

Servicing Fluid : Oil and gas production well maintenance and work over fluids and/or oil/water

- based mud and foam. This waste type mu st be reported in Barrels. The Pennsylvania residual waste code for this waste type is 808.

Spent Lubricant : Spent oil and gas drilling lubricants and/or spent plug drilling lubricants. This waste type must be reported in Barrels. The Pennsylvania residua l waste code for this waste type is 809.

Wastes Reported in Tons and Not Typically Considered to be Wastewater

Flowback Fracturing Sand : Oil and gas drilling flowback fracturing sand. This waste type must be reported in Tons. The Pennsylvania residual waste code for this waste type is 804.

10 The Guide can be found at: h ttp://files.dep.state.pa.us/OilGas/BOGM/BOGMPortalFiles/OilGasReports/Greenport/Userguides/Oil%20and%20Gas%20 Reporting%20Electronic%20Production%20and%20Waste%20Reportin g%20Guide.pdf

11 Copied directly from the Guide.

### Page 5 of 2 3 August 20, 2015

Drill Cuttings : Rock cuttings and related mineral residues generated during the drilling of an oil and gas well. This waste type must be reported in Tons. The Pennsylvania residual waste code for this waste type is 810.

Wastewater Characteristics D o N ot Define Waste Type

Note that the difference between produced fluid (produced water) and fracin g fluid waste (frac water) is time or event, but not characteristic, based. Unique water quality characteristics do not define either. Note also that the characterization of a waste into one of the eight (8) waste type groups does not determine its treatment method or its final disposal site. For example, Flowback Fracturing Sand might be saturated with water in which case it might not be delivered to a landfill and instead might be delivered to a WMGR 123 permitted facility for water removal before being delivered to a landfill. The units of measurement become confused as the sand is reported in tons, and the products resulting from W MGR 123 treatment would be reported in tons for the sludge delivered to a landfill and gallons stored, discharged (with additional permitting), recycled, or transported to a disposal well.

For reporting purposes, t he Guide also provides the additional dire ction when a waste is not disposed of at a permitted facility:

Road spreading : Select the appropriate county/municipality combination that identifies the location of the road spreading.

On site disposal : If waste was disposed in pits, encapsulated, or lan d applied at the well site at which it was generated, select the appropriate on site disposal method. Revised 12/30/2013

Reuse : If waste was reused at another well site without being processed at a permitted facility (i.e., a facility operating pursuant t o an individual or general permit), select “REUSE WITHOUT PROCESSING AT
A PERMITTED FACILITY”. N ote that on site processing of waste pursuant to an approved “Request for Approval of Alternative Waste Management Practices” (form 5500

- PM

- OG0071) is not consi dered a permitted facility.

Temporary storage : If waste was temporarily stored at the well site at which it was generated pending processing, disposal, or reuse, select “TEMP ON SITE STORAGE PENDING DISPOSAL OR REUSE”. Please note that final disposition of the waste will need to be reported for the reporting period in which it

occurs. If this occurs, a double reporting of volume would result.

Wastewater Characteristics

Shale Gas Wastewater varies in characteristic truck by truck, site by site, company by company, by time since the well was drilled and began producing, and geographically. A typical w astewater contains widely varying amounts of sand and gravel, oil and grease, dissolved and suspended solids containing multi

- valen ce cations like iron, manganese, thorium, barium, strontium, radium, calcium, and magnesium, and single valen ce cations like sodium.

### Page 6 of 2 3 August 20, 2015

One of the best and most comprehensive characterizations of wastewater exists in the 2013 and
2014 NPDES and Clean Streams Law permit application s submitted for Eureka Resources, LLC

– Standing Stone treatment facility located in Bradford County

. Standing Stone is permitted as both a
WMGR

- 123 recycling facility and as an NPDES permitt ed facility allowed to discharge to surface waters, in this case, the Susquehanna River.

The Standing Stone influent data (generally an average of four samples) are reported for P ollutant Groups 1 through 5 as follows:

### Page 7 of 2 3 August 20, 2015

### Page 8 of 2 3 August 20, 2015

### Page 9 of 2 3 August 20, 2015

Any individual sample might yield results e q u a l t o the average reported or more or less

.
A simple summary would be to state that wastewater co ntains oil and grease, other organics, dissolved and colloidal metals, hardness, and salt as well as settleable solids like drill cuttings and mud, sand, and gravel. The contaminants in wastewater together with the intended fate of the

wastewater define, in large part, the treatment steps required. Additional water quality comments include a typical pH of less than 7 SU, usually in the range of 6 SU and a Langelier Index less than

1.0 , making the water somewhat corrosive.

Current Treatment and Disp osal Options

There are several options for treatment and disposal of wastewater including disposal in Class 2 disposal wells 12 , recycling with treatment 13 on site, recycling with treatment off site, distillation and evaporation, and treatment and discharge. Storage is frequently an important component in the post

use, prior to re

- use , schedule.

The Water Treatment Service Industry

I f water does not remain on site and under the control of the producer, it can be transported to w astewater treatment facilities ( WWTF’s ) or disposal well

. Upon inspection, the WWTF either accepts the load on a tank
truck or rejects it. When accepted, it becomes the WWTF’s responsibility to treat it.

No wastewater received at any WWTF in Pennsylvania is presently known to be ‘piped’ in, although that is a likely future development , especially where a number of wells exist in close proximity . Rather, all wastewater is delivered by truck

, and perhaps via rail in the future. These facilities may also be characterized as central ized
wastewater treatment facilities (CWT’s) 14 , except with the detail that the EPA definition of a CWT includes a discharge to surface waters and many of the WWTF’ s recycle, but do not discharge

. Both terms are used interchangeably in this report.

Treatme nt Requirements

In Pennsylvania, facilities which receive residual waste and have no liquid discharge are regulated in accordance with residual waste management regulations. Treatment and discharge facilities are primarily regulated under
the Clean Stream s Law and NPDES permit regulations. In Pennsylvania Class 2 disposal wells are regulated by the U.S. EPA. Regulation varies state to state. Ohio has primacy for regulation of its Class 2 disposal wells. Some facilities may hold both a residual waste pe rmit and an NPDES permit.

12 Mostly in Ohio.

13 Treatment provided varies.

14 CWT’s are defined in U.S. EPA regulations 40 CFR 437.2 (c)

### Page 10 of 2 3 August 20, 2015

Treatment requirements for wastewater vary depending on the desired characteristics of the treated

wastewater

. If the wastewater is to be discharged to a POTW or to the surface waters of the Commonwealth,

as a new source, then 25 PA Code 95 .10 (and related chapters such as 92 and 92 (a) ) applies.

If the wastewater is to be treated and then mixed with other waters to be used in the next frac job, then the treatment requirement is established by the gas company which might require minimal treatment or a higher
level of treatment. If the wastewater is to be transported to Class 2 disposal wells in Ohio, then the

wastewater must be treated to the standards established by th os e well operators.

The level of treatment provided to wastew ater is critical not only for achieving the desired water quality, but also for the quality and quantity of the residuals, the sludges, produced. Higher levels of wastewater treatment result in the production of ever greater volumes of residuals.

Analysis of Shale Gas Wastewater Data 2014

Analysis of the data results in the following table of waste generation. Barrels are reported in the data set. Barrels have been converted to gallons in the following table as well. Rounding may result in minor arithmetic

error.

### Page 11 of 2 3 August 20, 2015

For comparison, t he second half of 2011 data show the average daily volumes 15 of the then seven (7) different

wastes reported at that time to DEP were as follows:

Comparison of 2011 versus 2014 Data Sets

The data analyzed reports wastewater transfer events. It reflects but does not exactly define the date or dates that the wastewater was produced, rather when it was transported. Analysis of data over longer periods of
time should reduce the im pact of time difference between wastewater production and transport.

T he analysis of 2011 second half data to 2014 data shows that it is obvious that Produced Fluid has over taken and passed, in terms of volume, the amount of F racing Fluid Waste producti on. This is the likely outcome over
time with ever more wells in production and relatively fewer wells being fraced 16

.

Brine , now called Produced Fluid (or Water)

, i s 294 percent of its volume in 2011. Drilling fluid in 2011 was
about 620 percent of what it is today. Frac fluid in 2011 was about 1 8 0 percent of what it is today. Overall, the
four liquid waste types in 2011 summed to just over 5,0 00,000 gallons per day, about 102 percent of the current volume. The types of wastes have changed in rel ative volumes, but the total volume has remained
static despite reduced drilling.

Transport of Shale Wastewaters to Other States

During 2014, shale waste waters were disposed of at sites in three states , Pennsylvania, Ohio, and West Virginia. Solid w astes were delivered to those same states plus Utah, New York, and Michigan.

15 Assuming the data covered 184 days. Work day volumes would be 7/5 (no weekend work) or 7/6 (includes Saturday as a work day) of the results reported.

16 Especially so given lower gas prices.

### Page 12 of 2 3 August 20, 2015

Centralized Wastewater Treatment Plant s for Discharge

The reported facilities to which wastewater was delivered include:

1. Fairmont Brine Recycling in West Virginia 5,989 barrels. This is also a recycling facility.
2. Patriot Waste Treatment in Warren Ohio 103,747 barrels. This waste is discharged under a Municipal Industrial Pretreatment Program (MIPP) permit to the Warren, OH, sewage treatment plant. If located in Pennsylvania, i t is believed that this discharge would not be 25
PA Code 95.10 compliant.
3. Waste Treatment Corp oration in Warren, Pennsylvania 228,165 barrels. The DEP reports that reported deliveries to this facility were for recycle, for groundwater injection at “Bear Lake” injection wells, and not for discharge. Further DEP reports 17 that this facility no longer accepts
wastewater from unconventional wells.

4. Three possibly incorrect reports of deliveries to Creekside, Fluid Recovery Service , Franklin, and the same compa ny in Josephine, PA. These deliveries totaled 176 barrels.

5. Additional deliveries for discharge to surface water are not reported but likely occur at the
Eureka facilities in Williamsport and Standing Stone, PA. The Williamsport discharge occurs through t he Williamsport sewage treatment plant , is 95.10 compliant and varies averaging about 30,000 gallons per day 18 . The Standing Stone discharge is to the Susquehanna River and
is discussed is some detail later in this report. Three Eureka facilities al so hold WMGR

- 123 residual waste recycling permits. That is the source of the uncertainty.

Given the uncertainties in the above, only an estimate of surface water discharge can be made. The author’s

e stimate is on the order of 460,000 barrels in 2014.

Cen tralized Treatment Plants for Recycle

A total of five (5) facilities fit into this category . They are located in Ohio and West Virginia, all outside of Pennsylvania. The total discharge is 5 0,576 barrels in 2014 . They are:

1. Hanchin Recycling, Hopedale, O H 180 barrels.

2. Central Ohio Oil, Columbus OH 48 barrels.
3. Eureka Station Crosstex Energy, St. Mary, WV 4049 barrels.

4. Liquid Waste Solidification, Steubenville, OH 134 barrels.

5. Petrowater, Inc., Jefferson, OH 46,165 barrels.

These are out of state recycling facilities, hence, they are not regulated under WMGR

- 123.

Injection Wells

17 This is from a phone conversation with Joel Fair of DEP NWRO o n June 15, 2015.

18 Confirmed in a telephone conversation with Jorgen Zimmerman of the Williamsport Sanitary Authority June 19, 2015.

### Page 13 of 2 3 August 20, 2015

A total of 3,392,707 barrels of wastewater was disposed of at fifty

- five (55) disposal wells, almost all of which are located in Ohio. The two wells accepting the most wastewater were Adams No. 1, 230,942 barrels, in
Coshocton , OH and RHOA No. 3, 243,960 barrels, in Jefferson, OH. Camp Creek Disposal in Camp Creek

, WV
received 240 barrels and the Irvin A

- 19 FMLY FEE A19 well in Mahaffey, PA received 147,913 barrels. These are
th e only two listed well s not located in Ohio.

Residual Waste Recycling Facilities Permitted under WMGR

- 123

DEP reports that there are a total of twenty

- three (23) WMGR123 facilities holding active permits. They are reported in the following table.

### Page 14 of 2 3 August 20, 2015

DEP was kind enough to provide the table which is reformatted for this report, but otherwise unchanged prior to complete D epartment review . The author’s review notes the erroneous listing of Hydro Recovery Sta nding Stone. This is likely Eureka Standing Stone. Also, Eureka notes its 2 nd Street facility has a capacity of 420,000 gpd.

A total of nineteen facilities are reported receiving a total of 11,597, 000 barrels in 2014 as listed below:

VOLUME BARRELS PERMIT NO. FACILITY
7
, 54 0 WMGR 123 NC024 AQUATEC H WASTE PROCESSING, LAWRENCEVILLE,TIOGA CO 420 WMGR 123 SW011 ASPEN JOHNSTOWN RESIDUAL WASTE OPERATION 37,935 WMGR 123 N W006 CAES WATER TRMT & RECYCLING FAC 4,000 WMGR 123 N W005 CARES MCKEAN WATER TRMT & RECYCLING FAC 1,040 WMGR 123 NC0 12 CHERRY FLATS CS CONCENTRATOR 49,230 WMGR 097 R017 CLEAN EARTH INC WILLIAMSPORT DRILLING MUD PROC FAC 310,940 WMGR 123 NC 119 EUREKA RESOURCES LLC WILLIAMSPORT WATER TREATMENT 19 275,540 WMGR 123 NC0 18 EUREKA RESOURCES STANDING STONE TWP FACILITY 29,740 WMGR 123 SW010 GREENE COUNTY WATER TREATMENT LLC 2,361,700 WMGR 123 NE002 HIBBARD TANK PAD 2,065,860 WMGR 123 HYDRO RECOVERY LP BLOSSBURG FACILITY 2,305,340 WMGR 123 NC010 HYDRO RECOVERY LP ANTRIM FACILITY 760,420 WMGR 123 NW009 RES WATER BUTLER 2,109,100 WMGR 123 SW005 RESERVED ENV SVC HEMPFIELD TWP RESIDUAL WASTE OPER 445,480 WMGR 123 SW001 RONCO WASTE PROCESSING FACILITY 248,990 WMGR 123 NC008 SHARER TEMP CENTRALIZED FLUIDS PROCESSING FACILITY

5,310 WMGR123NE003 SHASKAS SOUTH PAD

305,640 WMGR123NE001 SOM ERSET REGIONAL WATER RESOURCES

172,990 WMGR123D001X TERRAQUA RESOURCE MANAGEMENT

Again, there is some uncertainty associated with the total volumes recycled. Since two of these facilities also hold NPDES permits

, the ultimate fate of the wastewater once delivered to the facility is not known

. Some or all may have been discharged at the two Eureka facilities. Nonetheless, that amount of wastewater accepted by these facilities for recycling dwarfs what could have been discharg e d by the two
Eureka facilities. Conversely, the RES facility in Hempfield Township, Westmoreland County is a WMGR

- 123

19 The 2014 data export files available on the DEP website do not contain data allowing the tracking of wastewater deliveries to the two Eureka facilities located in Williamsport, PA. Deliveries are reported only to the South Second Street facility and not to the Reach Road facility. So, this table reports the sum s reported deliveries to both facilities.

### Page 15 of 2 3 August 20, 2015

holder but is frequently listed as an NPDES facility with surface water discharge. Where misreported, delivery data for RES was moved ov er into this category of facility. The Clean Earth Inc. facility in Williamsport operates under WMGR 097. This is a permit granted to research and development facilities on a temporary basis.

The largest WMGR

- 123 treatment and recycling entity is Hydro Recovery, LLC which operates two facilities north of Williamsport near Blossburg, PA. Together, those two facilities are reported to have received 4,771,000 barrels in 2014. They are opening another facility in Hanover Township, Washington County this

su mmer.

Adjustments applied in this report result in an assumed 11,210,000 barrels treated for recycling.

Reuse without Processing at a Permitted Facility

This is the most common handling of wastewater generated from unconventional wells. It involves the st orage and reuse of wastewater at the well site by the producer . Transportation and treatment costs are minimized. A total of 27,651,510 barrels of wastewater were handled in this way.

Storage Pending Reuse

This reflects the wastewater that has been sto red on site pending reuse. I t amounts to 112,577 barrels in 2014.

Wastewater Handling in 2014

The data for 2014 are summarized in the following table :

Wastewater Produced from Unconventional Wells 2014

Barrels Gallons Barrels Gallons Daily Daily Number of Wells 6,890 Treatment Methods Treatment and Discharge 460,000 19,320,000 1,260 52,932 Centralized Waste Treatment for Recycle 50,576 2,124,192 139 5,820 Injection Wells 3,392,707 142,493,694 9,295 390,394 Residual Waste Processing Facilities 11,210,300 470,832,600 30,71 3 1,289,95

2 Residual Waste Transfer Facility 41,397 1,738,674 113 4,763

Reuse W/O Processing at a Permitted Treatment Facility 27,651,510 1,161,363,42 0 75,75

8 3,181,81

8 Road Spreading 0 0 0 0

### Page 16 of 2 3 August 20, 2015

Storage Pending Disposal
or Reuse 112,577 4,728,234 308 12,954 Totals 42,919,0 00 1,802,60 1,000 117,586 4,938,632

As stated before, the data set reports of Treatment and Discharge Facilities (NPDES and MIPP Discharges) result in the potential greatest error in the data for several reasons. The first is that some
deliveries are to a treatment facility 20 that operates under a WMGR permit, but also holds, but does not use, an NPDES permit. That reporting was corrected for this report an d RES discharge data was moved
to RES WMGR

- 123 recycle. The reporting error for Eureka Standing Stone seems to be the reverse in
that it actually does hold an NPDES permit and uses it, but is reported as a Residual Waste Processing Facility.

Eureka Williamsport Second Street effluent is discharged to the Williamsport Sanitary Authority , but can also be recycled.

These wastewater data also presume that a generator knows that his waste will be either recycled or discharged when he makes the wa ste report or that he changes his report when a decision is made to recycle instead of discharge, etc. Also, data set reporting ends at delivery to the first permitted facility
and then , if additional reporting is appropriate, falls on the permitted faci lity to make appropriate reporting under its permit if the waste is then, for example, hauled to a disposal well instead of being recycled. This problem is always true with the waste delivered to a Residual Waste Transfer Facility.
Its final fate is not reported i n this data set, but is probably available from the data sets the Transfer Facility provides to DEP under its permit reporting obligations. Similarly, WMGR

- 123 only require s that the permittee maintain data regarding the fate of its treated was tewater.

The data set also does not report on the sludge that might be generated during the treatment process
which is then hauled to a landfill.

In the case of Eureka Standing Stone, some reconciliation can be attempted. I t is reported to have
receive d 164
, 883.68 barrels or 6,925,128 gallons of wastewater in 2014 . It discharged only 3,310,594 gallons of wastewaters in 2014 21

, and the difference is not reported in the data set analyzed, but may exist in reporting Standing S tone does to comply with its WMGR permit.

20 Reserved E nvironmental Services, LLC in Mount Pleasant, Pennsylvania

21 Based on analysis of EDMR’s from DEP website for NPDES Permit No. PA0232351

### Page 17 of 2 3 August 20, 2015

Summary of Wastewaters 2011

In contrast to 2014, i n 2011, the ultimate disposal methods were:

2011 Disposal Method Daily Volume Units Number of Facilities

Brine or Industrial
Wastewater Treatment Facility 77,304 barrels

Injection Wells 9,994 barrels 42 of which 5 were in WV, 3 in PA, and 34 in Ohio Landfill 2,710 tons 32 Landfill 22 8.6 barrels 4 Publicly Owned Treatment Plant 69.8 tons 2 23

Stored, Ultimate Disposal Method Not Determined 24 37.8 barrels Not Applicable

Reuse Other Than Spreading 25 33,611 barrels Not Applicable

Chapter 95.10 New Source Compliant Facilities

The DEP adopted 25 PA Code 95.10 in August
, 2010 . It established n ew effluent limitations for new and expanding Marcellus wastewater treatment facilities planning to discharge to
surface waters

.
Among other limitations, t he maximum concentrations established under 95.10 for total dissolved
solids are 500 mg/l and total chlorides are 250 mg/ l. The removal of sodium chloride necessary to meet those limits requires cr ystallization, evaporation, and condensation (distillation), or reverse osmosis. The treatment needed to accomplish this is v ery expensive to build and operate

.
As long as wastewater recycling 26 could be accomplished in new frac jobs, recycling would be less expensive tha n implementing t hose treatment technologies needed for new source compliance and, therefore, no such treatment facilities were constructed to meet the 95.10 standards. Beginning in 2013, one facility was constructed. Eureka Resources LLC reports that it has constructed the only new facility compliant with the new 95.10 regulations for surface water discharge in Standing Stone Township, Bradford County

.

22 It is assumed that all of this material was solidified at the landfill before final disposal, but may be misreported.

23 Reynoldsville and Johnstown

24 It is not known if any of the materials reported here were subsequently disposed of by another method and so reported.

25 Probably for the next frac.

26 With storage to meet the inevitable inequities in supply of and demand f or recycled water.

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On October 1, 2013, Eureka became authorized through the issuance o f NPDES Permit No. PA 0232351 to discharge from its new facility located in Standing Stone Township, Bradford County, at a rate up to 0.168 million gallons per day into the Susquehanna River . A total of twenty parameters are regulated and/or monitored

. The effluent limitations and monitoring requirements of the permit are as follows:

Total Nitrogen Report lbs Total Monthly Total Phosphorus Report lbs Total Monthly

2,4,6

- Trichlorophenol Report lbs/day Average Monthly 2,4,6

- Trichlorophenol Report lbs/day Daily Maximum 2,4,6

- Trichlorophenol 0.106 mg/L Average Monthly 2,4,6

- Trichlorophenol 0.155 mg/L Daily Maximum 2

- Butanone Report lbs/day Average Monthly 2

- Butanone Report lbs/day Daily Maximum 2

- Butanone 1.85 mg/L Average Monthly 2

- Butanone 4.81 mg/L Daily Maximum Acetone Report lbs/day Average Monthly Acetone Report lbs/day Daily Maximum Acetone 7.97 mg/L Average Monthly Acetone 30.2 mg/L Daily Maximum Acetophenone Report lbs/day Average Monthly Acetophenone Report lbs/day Daily Maximum Acetophenone 0.0562 mg/L Average Monthly Acetophenone 0.114 mg/L Daily Maximum Ammonia

Nitrogen Report lbs/day Average Monthly Ammonia

Nitrogen Report lbs/day Daily Maximum Ammonia

Nitrogen 10 mg/L Average Monthly Ammonia

Nitrogen 20 mg/L Daily Maximum BOD5 Report lbs/day Average Monthly BOD5 Report lbs/day Daily Maximum BOD5 53 mg/L Average Monthly BOD5 163 mg/L Daily Maximum

### Page 19 of 2 3 August 20, 2015 Chloride Report lbs/day Average Monthly Chloride 500 mg/L Daily Maximum Chloride Report lbs/day Daily Maximum Chloride 250 mg/L Average Monthly Dissolved Iron 7 mg/L Instantaneous Maximum Flow (mgd) Report MGD Average Monthly Flow (mgd) Report MGD Daily Maximum

o

- Cresol Report lbs/day Average Monthly

o

- Cresol Report lbs/day Daily Maximum

o

- Cresol 0.561 mg/L Average Monthly

o

- Cresol 1.92 mg/L Daily Maximum Oil and Grease Report lbs/day Average Monthly Oil and Grease 15 mg/L Average Monthly Oil and Grease 30 mg/L Instantaneous Maximum
p

- Cresol Report lbs/day Average Monthly
p

- Cresol Report lbs/day Daily Maximum
p

- Cresol 0.205 mg/L Average Monthly p

- Cresol 0.698 mg/L Daily Maximum pH 6 S.U. Minimum pH 9 S.U. Maximum Phenol Report lbs/day Average Monthly Phenol Report lbs/day Daily Maximum Phenol 1.08 mg/L Average Monthly Phenol 3.65 mg/L Daily Maximum Pyridine Report lbs/day Average Monthly Pyridine Report lbs/day Daily Maximum Pyridine 0.182 mg/L Average Monthly Pyridine 0.37 mg/L Daily Maximum Total Barium Report lbs/day Average Monthly Total Barium Report lbs/day Daily Maximum

### Page 20 of 2 3 August 20, 2015 Total Barium 10 mg/L Average Monthly Total Barium 20 mg/L Daily Maximum Total Copper Report lbs/day Average Monthly Total Copper Report lbs/day Daily Maximum Total Copper 0.757 μg/L Average Monthly Total Copper 0.865 μg/L Daily Maximum Total Dissolved Solids Report lbs/day Average Monthly Total Dissolved Solids 500 mg/L Average Monthly Total Dissolved Solids Report lbs/day Daily Maximum Total Dissolved Solids 1000 mg/L Daily Maximum Total Iron 2.1 lbs/day Average Monthly Total Iron 4.2 lbs/day Daily Maximum Total Iron 1.5 μg/L Average Monthly Total Iron 3 μg/L Daily Maximum Total Strontium Report lbs/day Average Monthly Total Strontium Report lbs/day Daily Maximum Total Strontium 10 mg/L Average Monthly Total Strontium 20 mg/L Daily Maximum Total Suspended Solids Report lbs/day Average Monthly

Total Suspended Solids Report lbs/day Daily Maximum

Total Suspended Solids 216 mg/L Daily Maximum

Total Suspended Solids 61.3 mg/L Average Monthly

Total Zinc Report lbs/day Average Monthly Total Zinc 0.42 mg/L Average Monthly Total Zinc Report lbs/day Daily Maximum Total Zinc 0.497 mg/L Daily Maximum

### Page 21 of 2 3 August 20, 2015

The limits reflect that the discharge is into the Susquehanna River and its water quality classification, location of the discharge relative to water intakes, other nearby discharges, and standard NPDES permit writing policy.

So, the Standing Stone NPDES permit provides a measure of what is allowed in a discharge to surface

water s. These limits can be contrasted to the much more stringent limits if the intent were to be “de

listed,” that is no longer considered a waste. With de

- listing the water could be stored or used without needing to comply with a waste management permit.

The delisting requirements are much more stringent than the discharge limits.

The Eureka Standing Stone Design

- Prototype of the Future?

With a reduction in the number of wells being drilled and fraced and an increase in the number of wells in production thereby producing production fluids, the ability to reuse production and frac
fluids decreases. There will likely be a time when recycling demand is not sufficient to meet the
need for reuse . What happens to the shale wastewaters if they cannot be reused ?

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Standing Stone addresses that question by providing additional treatment steps to the end of what might be termed a conventional shale wastewater treatment plant. The typical plant is capable of removing petroleum products, high solids materials, hardness , and metals to the point required for reuse. Standing Stone does the same, but also adds after that level of treatment mechanical vapor recompression (MVR) crystallization to produce a low total dissolved solids “distilled” water, an almost dry salt cont aining mainly sodium chloride, and a high concentration
brine. The water fraction can be reused. The concentrated brine is discharged to an approved reuse or to an underground injection well. The salt might be reused or transported to an appropriately licensed landfill for final disposal.

An additional step then provides for treatment of the distillate , clean water

, fraction in a membrane bioreactor (MBR ) followed by reverse osmosis and discha rge to surface water compliant with an NPDES permit.

This is not entirely new technology

. Clean Streams, LLC constructed a distillation treatment facility in Williamsport which opened in 2011 and which used Altela, Inc. technology. MBR’s are widely
used in municipal wastewater treatment and reverse osmosis is a standard method for removing
ions from water. Perhaps the changing economies of “ store and reuse ” versus treatment and discharge or treatment and evaporate will bring more applications similar to Standing Stone.

A review of the EDMR’s on the DEP website reveals that Standing Stone reports compliance with its NPDES permit effluent limitations. However, the discharge volumes have been considerably less than the design. It is not know n if this is a result of recycling rather than discharging the wastewater or if demand has not yet grown to the point that there would need to be larger discharges. Discharges in June through November 2014 (December has no report) were 7,900, 8,011, 21,120, 17,100, 18,0 80, and 36,500 gallons per day on average.

Insight into the Standing Stone operation is provided by a paper Eureka presented to the Society of Petroleum Engineers entitled, “A Sustainable Choice for Water Treatment/Recycling When Injection is Not an Option or Water Supply is Limited” in May 2015

. The paper concludes that
efforts to create deliste d water and salt products are very difficult and highly dependent on control of pre

- treatment processes so that a constant feed to evaporation and crystallization equipment is achieved.

Conclusion

In the three years since the writing of the 2012 report, produced water has passed frac water in its volume of production and the practice of recycling of wastewater on site without treatment at a permitted facility and recycling by treatment at a permitted facility have come to dominate the shale gas wastewater industry. Treatment and discharge occurs only at a few sites, but may
become more i mportant as more produced water proportionately has to be treated and less treated water is needed for fracing. New treatment facilities are being constructed, Hydro

### Page 23 of 2 3 August 20, 2015

Recovery Antrim started operation in 2013 and Eureka Standing Stone in 2014 . More facili ties are planned.

All of this is occurring as the amount of wastewater being produced is more or less level.