MEMORANDUM

TO: Lisa Biddle, EPA/EAD

FROM: Brent Ruminski, ERG

DATE: 7 March 2014

SUBJECT: Notes on Call with Hydrozonix, LLC on 7 February 2014

On 7 February 2014, ERG held a meeting with representatives from Hydrozonix, LLC (Hydrozonix), a wastewater treatment vendor that offers advanced oxida tion precipitation (AOP) treatment systems to unconventiona l oil and gas (UOG) operators. At tachment 1 lists all of the meeting participants. The main discussion topics included:

 Overview of UOG wastewater treatment for reuse

 How AOP works

 How operators use AOP

 Targeted pollutants and removals

 Costs and energy requirements

Overview of UOG Wastewater Treatment for Reuse Since 2010, Hydrozonix has provide d wastewater treatment services, on a contract basis, to UOG operators for reusing the treated wastewater in hydraulic fracturing. To date, they have treated over 37 million barrels of UOG wastewater originating from the following UOG formations. The approximate number of wells hydr aulically fractured with wastewater treated by Hydrozonix’s AOP treatment unit is also noted below.

 Eagle Ford (shale oil and gas): 7 wells

 Fayetteville (shale gas): 10 wells

 Marcellus (shale gas): 9 wells

 Wolfcamp/Spraberry (shale/tight oil and gas): 430 wells
The use of AOP for UOG wastewater treatment enables operators to reuse wastewater in hydraulic fracturing. Hydrozonix re ported that the potential for operators to reuse wastewater ultimately depends on the total cost compared to other management alternatives. The total cost for managing and/or disposing of UOG wastewater depends on many factors, including the following:

 Drilling/completion program 1

1 Operators must have an active drilli ng and completion program in order to have a successful reuse program.Page 2 of 9  Wastewater volumes

 Wastewater quality

 Fracturing fluid design (e.g., gel, slickwater) Hydrozonix has served customers that hydraulic ally fracture their wells using both “gel” and “slickwater” fracturing fluid designs. The remainder of this discussion focuses on the status and progress of reuse activities in the UOG indus try in terms of UOG wastewater quality and fracturing fluid design (gel versus slickwater).

Gel Designs Operators typically use gel designs to fracture liquid rich formations 2 . Gel designs are water-based fracturing fluids and that contai n gel chemical additives (e.g., guar gum). Gel designs have relatively high fluid viscosity compared to slickwater designs, which increases the quantity of proppant that can be carried into th e formation fractures. Hydrozonix indicated that gel designs are more complex than slickwater de signs and therefore present more obstacles for reuse than slickwater designs. In general, gel designs are not tole rant to base fluids 3 with elevated TDS concentrations. For example, Hydr ozonix indicated that most fracturing service providers have a maximum TDS concentrati on for base fluid between than 20,000 to 50,000 mg/L for gel designs. Hydrozonix provided several specific examples of issues with using high TDS base fluid for gel fracturing:

 Gel fracturing fluid designs typically use “d elayed” cross-linked gels that allow the properties of the gel to activat e after injection. Boron is an example of a constituent that is present in UOG wastewater that may cause these gels to activate prematurely. High levels of TDS in the base fluid can also cause incompatibility issue for the gel.

 Gel designs typically require the service provider to incr ease the pH above neutral in order for the chemistry to work properly. This pH adjustment can cause constituents in UOG wastewater to precipitate and cause formation damage.

Hydrozonix suggested that some of the serv ice providers recently began testing new chemical additives that allow the use of base fluids with higher TDS concentrations for gel designs. However, Hydrozonix expects these designs to be expensive initially for operators to use compared to existing designs.

Slickwater Designs Operators typically use slickwater-fractur ing fluids in dry natural gas producing formations. Slickwater designs are water-based fracturing fluids where primary purpose of the chemical additives is to reduce friction (i.e., fr iction reducers). In the past, fracturing service providers had concerns about hi gh concentrations of TDS in ba se fluids because they could interfere with friction reducers. However, chemical additives have advanced and today, operators

2 Liquid rich formations are those that produce oil or natural gas co-produced with natural gas condensates.
3 Base fluid is the final mixture of source waters to whic h chemicals and proppant are added to create the fracturing fluid. Base fluid can be only freshwater, or a mixture of freshwater, groundwater, and reused UOG wastewater.Page 3 of 9 can use base fluids with relatively high TD S concentrations compared to gel designs. Hydrozonix stated that base fl uids with TDS concentrations as high as 100,000 mg/L are not uncommon in slickwater designs and that some operators do not have a maximum TDS criteria anymore.

How AOP Works AOP creates ozone and hydroxyl radicals to de stabilize targeted cons tituents such that they precipitate out of the solution. AOP does not require chemical additives. Instead, AOP uses a series of processes that hydrolyze water into hydrogen and hydroxyl radicals. Hydroxyl radicals are very reactive and are ideal for de stabilizing targeted cons tituents. The following sequence of processes occurs w ithin an AOP treatment system:

1. Wastewater enters static mixers that homogenize the wastewater and initiate hydrodynamic cavitation using a static mixer. W ithin the static mixer, the velocity of the wastewater is increased and th e pressure is simultaneously decreased, resulting in the creation of small vapor cavities (i.e., bubbles). These cavities quickly collapse and release a suffici ent amount of energy to cause water molecules to break down into hydroxyl ra dicals. Cavitation also serves as a catalyst for chemical interaction by increasing the surface area between constituents within the water (i.e., mixing).
2. Ozone (O 3 ) 4 , created by oxygen separators and ozone generators, is mixed with the wastewater in a flash reactor. The ozone acts as an oxidizer and immediately kills bacteria. Only enough ozone is injected so that all of it is consumed before the wastewater leaves the treatment unit. Excess ozone can potentially interfere with fracturing fluid chemicals. As curre ntly configured, AOP does not include an ozone recovery and destruction step . Instead, the treatment unit operator determines the appropriate dose of ozone using real-time monitoring of oxidation reduction potential (ORP) 5 in the UOG wastewater.
3. The wastewater passes through an electrochemical oxidation unit. Electrochemical oxidation uses electrical current to convert water molecules into hydroxyl radicals. These hydroxyl radica ls aid in destabilizing suspended, emulsified, or dissolved contaminants.
4. The cavitated, ozone-rich wastewater is introduced to ultrasonic transducers which generate an oscillating pressure wave (i.e., sound). These high pressure waves provide sufficient energy to initiate caustic cavitation. Caustic cavitation is the creation of small vapor cavities using pressure wave s. These vapor cavities immediately collapse, resulting in a rel ease of energy that causes additional breakdown of water molecules into hydroxyl radicals.

4 This ozone is generated within the treatment system. Ozone is a highly reactive oxidant that kills bacteria and oxidizes heavy metals.
5 ORP is the voltage required for chemical sp ecies to acquire electrons (i.e., reduced).Page 4 of 9 5. The ultrasonic transducers simultaneously reduce the particle size of destabilized constituents to less than one micron.

During AOP, the precipitated solids in the wa stewater are intentionally not removed during AOP. Instead, the size of the precipitated particles is reduced to less than one micron so they do not cause formation damage during fr acturing. In addition, they no longer have the potential to cause scale during th e hydraulic fracturing process b ecause they are destabilized.

How UOG Operators Use AOP Operators most commonly use AOP to treat UOG wastewater on-the-fly with hydraulic fracturing as shown in Figure 1 6 . On-the-fly treatment is only possible because mobile AOP units are capable of treating wastewat er at relatively high rates co mpared to other technologies. 7 In onthe-fly treatment, other source water (e.g., fr esh water, ground water) and the untreated wastewaters are mixed together and treated by the AOP treatme nt unit. Although not shown in Figure 1, AOP typically requires medi a filtration to remove suspended solids prior to treatment. Either Hydrozonix or the UOG operato r provides filter bags that ar e used immediately before the primary AOP treatment unit.
On-the-fly AOP has the following potenti al cost savings to the operator:

 Elimination of trucking wastewater to a centralized facility for treatment

 Reduction or elimination of the use of biocid es and scale inhibitors during fracturing

 Storage of the untreated and treated wastew ater because it is already required for hydraulic fracturing 8

Occasionally, operators may use AOP in an al ternative setup shown in Figure 2. In this set up, AOP treatment units are deployed at existing impoundments that UOG operators construct to temporarily store wastewater. 9 The AOP treatment unit circulates wastewater back into the impoundment after treatm ent. Because AOP can treat wastew ater at relatively high rates, it is possible to treat the enti re volume of a typical impoundment in one day, although multiple passes of treatment are typically necessa ry to guarantee sufficient treatment. 10 Operators that choose to implement AOP treatment at an ex isting impoundment typically do not need to purchase any additional equipment other than th e rented unit. The use of AOP at existing

6 UOG operators may store untreated wastewater in open pits or impoundments adjacent to well pad depending on applicable regulations.
7 Treatment rates of 80 barrels per minute are typical for AOP treatment, but rates can be as high as 120 barrels per minute. Higher treatment rates result in reduced treatment effectiveness. Fo r comparison, a typical fracturing job will inject fracturing fluid at approximately 60 to 120 barr els per minute. If needed, operators can use a second AOP system in parallel to meet the desired fracturing rate.
8 If treatment prior to reuse is conduct ed at a centralized location, which is typical for other treat ment technologies, untreated and treated wastewater requires storage at that fa cility in addition to its own storage at the next fracturing site.
9 Applicable regulations for storing UOG wastewater in open impoundments vary by state and sometimes even within states.
10 Based on a typical impoundment capacity of 100,000 barrels and a treatment rate of 60 to 80 barrels per minute.Page 5 of 9 impoundments has many of the same advantages as the use of on-the-fly AOP treatment, as explained above. One additional advantage of AOP treatment at an existing impoundment is that the AOP can operate continuously, whereas on-the-f ly treatment requires periodic breaks while the operator moves onto the next stage of the fracturing job.

Figure 1. Flow Diagram of AOP Treatment On-the-Fly with Hy draulic Fracturing in UOG Applications

Figure 2. Flow Diagram of AOP Treatment at Wastewater Impoundments in UOG ApplicationsPage 6 of 9 Targeted Pollutants and Removals Operators use AOP for treatment prior to re use because it focuses on microbial control and scale control, two issues that UOG operators must avoid. Microbial cons tituents are typically totally reduced by AOP treatment. During AOP treatment, the multivalent cations that typically cause scale in UOG wells are destab ilized and then reduced in si ze to less than 1 micron and remain suspended within the solution. For the purpose of reuse in fracturing, UOG operators often only require this level of treatment because the sc aling potential is reduced.
Table 1 shows specific influent and effluent concentrations from AOP treatment of UOG wastewater. Data in Table 1 c onfirm that the presence of bact eria decreases significantly, but concentrations of many multivalent cations are no t. However, Figure 3 demonstrates how AOP is able to reduce scaling potential. This figure shows the results from dynamic tube block tests 11 of treated UOG wastewater (red) and the associated untreated UOG wastewater (blue). The increase in pressure observed for the untreated UOG wastew ater indicates its high er potential to cause scale formation than th e treated UOG wastewater.

Table 1. AOP Removal Efficiency in UOG Wastewater Applications

Constituent Typical Influent Range (mg/L, unless otherwise noted) Typical Effluent Range (mg/L, unless otherwise noted) Removal Efficiency (%)
Chlorides 17,650 – 19,250 17,250 – 19,200 0 – 2
Metals
Barium 56 – 285 42 – 250 12 – 25 Calcium 427 – 2,408 323 – 2,360 2 – 24 Iron, total 21.2 – 144 19.7 – 143 1 – 7
Iron 15.7 – 147 5.9 – 148 1 – 62 Magnesium 317 – 736 290 – 680 8 – 9
Other
Carbonate 4.5 – 92 2.8 – 58 37 – 38 Alkalinity 150 – 700 95 – 530 24 – 37 Calcium hardness 1,840 – 6,020 1,700 – 5,900 3 – 5 Hardness 2,050 – 7,340 1,950 – 7,110 2 – 8 Bacteria (counts/mL) 230 – 9,300 BRL – 4 > 99%
Sulfates 100 – 855 85 – 657 15 – 23 BRL: Below Reporting Limit Source: As reported by Hydrozonix in Appendix B. Hydrozonix reported bacteria data separately.

11 A dynamic tube block test is used by UOG operators to measure the scaling potential of a fluid. Operators use this test to determine the efficiency of chemical inhibitors that prevent scaling in the wellbore. This test measures the pressure change over time as a fluid (e.g., UOG wastewate r) flows through a tube apparatus. An increase in pressure indicates the buildup of scale within the apparatus. NACE International, The Corrosio n Society, reports specific testing protocols in NACE 31105, Dynamic Scale Inhibitor Evaluation apparatus and Procedures in Oil and Gas Production

.Page 7 of 9 Figure 3. Test Results of a Dynamic T ube Block Test after AOP Treatment

Costs and Energy Requirements As previously mentioned, Hydrozonix offers their treatment system to operators on a contract basis. The typical cost charged to operators ranges from $0.50 to $0.75 per barrel of influent wastewater 12 . Higher costs are possible depending on set up costs and excessive downtime between fracturing stages. Costs are minimized when downtime between fracturing stages is minimized or the treatment is performed at an impoundment (see Figure 2). Hydrozonix’s treatment unit typical runs on electrical energy supplied by an onsite generator. Hydrozonix estimated that their t echnology requires between 1.9 and 3.6 kilowatt hours per 1,000 gallons of infl uent wastewater using.

12 This includes any other source water (e.g., freshwater, groundwater) that is blen ded with the untreated UOG wastewater prior to treatment.Attachment 1: List of Meetin g Partici p ants

Name Affiliation Jinxuan Hu, Engineering Manager Hydrozonix, LLC
Mark Patton, Director of Marketing Hydrozonix, LLC Brent Ruminski, Engineer East ern Research Group, Inc.Page 9 of 9 Attachment 2: General Water Qualities for Untreated Water and Treated Water Provided by Hydrozonix