Aqua Testifies Before PA Democratic Policy Committee

At long last, Aqua PA has given its 3 million water-consuming customers a definitive position on Gas Drilling and its impacts on the drinking water quality in the Susquehanna and Delaware River Watersheds. Speaking on behalf of the company, Preston Luitweiler, Vice President and Chief Environmental Officer presented the testimony of Regional President, Karl Kyriss. The testimony is reprinted here in its entirety:

Testimony of Karl Kyriss, Regional President, Aqua America, Inc.
Before the Pennsylvania House Democratic Policy Committee
June 9, 2011, Philadelphia, Pennsylvania

INTRODUCTION
Good morning, Representative Sturla and members of the Committee. I am Karl Kyriss, Regional President of Aqua America, a water and wastewater utility serving 3 million people in 13 states. In Pennsylvania, we serve more than a million residents in 30 counties, primarily in Southeastern Pennsylvania but also in the northeastern and northwestern parts of the state.

I’m pleased to join you today for a discussion about how the industry growing around the Marcellus Shale– which is crucial to the Commonwealth’s energy future – can benefit from thoughtful water and wastewater management. We owe this to the citizens of the Commonwealth.

Water is essential for life. Pennsylvanians cannot live and prosper without efficient water utilities such as Aqua. It also puts great responsibility on Aqua, the Public Utility Commission and the Department of Environmental Protection as water is the only utility service that is ingested. Therefore, water utilities are subject to stringent water quality standards. Water service must be safe, reliable and sustainable.

Aqua is celebrating its 125th anniversary this year. The company was founded in 1886 in Delaware County by Swarthmore College professors. Through its long history, Aqua has been guided by the three words I mentioned a moment ago: quality, reliability and sustainability. As both a responsible user of the Pennsylvania’s precious water resources and a recognized leader in water treatment infrastructure, Aqua has grown to be one of the two largest water providers in the nation.

Aqua Pennsylvania, and I personally, have been following the developments of the Marcellus Shale with great interest. I served on Governor Rendell’s Statewide Water Resources Committee and the Sustainable Water Infrastructure Task Force and most recently was a member of Governor Corbett’s transition team for the Departments of Environmental Protection and Conservation and Natural Resources.

While we recognize the significance of this domestic energy resource for the country, as well as the potentially substantial economic benefit for Pennsylvania, we also share the Commonwealth’s deep and justifiable environmental concerns over responsible development of this resource.

All the research and reporting we have seen validates that the Marcellus Shale opportunity is a very real and viable economic opportunity today, will likely continue to be for the next several decades and can be done safely. Coincidentally, the Commonwealth’s plentiful water resources have always been a significant part of, or impacted by, energy resource development. The Susquehanna River provided transport for timbering in the 19th Century. In the 20th Century, streams were contaminated by acid mine drainage from the coal industry in the Southwest and Northeast. It appears Marcellus Shale will be even more water dependent than timber, oil and coal were in the past and has to be done correctly in the 21st Century to avoid a legacy of pollution and despoiled land. As a major water supplier for the state, Aqua Pennsylvania has a vested interest in ensuring that our water supplies are protected.

We can also play a role in providing water resources for responsible energy development. In short, we want to support efforts to grow an industry that provides tremendous economic benefits to Pennsylvania and critical energy resources for our country, and we want to ensure that it’s done right – with the proper respect for our natural resources now and into the future.

WHAT DO PUBLIC WATER SUPPLIERS NEED TO BE CONCERNED ABOUT?
As a supplier of drinking water to more than a million Pennsylvania residents, our primary concern is and will continue to be ensuring that there is an adequate supply of quality water that we can treat and deliver. To accomplish that, we need to ensure that our water sources are protected from potential impacts from gas drilling.

To date, our testing has not shown any adverse effect on Aqua’s water supplies from drilling activity or flowback water. There have been reports of some impacts to private wells. However, the potential water source contaminants we have, and continue, to watch for are:

  • Natural gas
  • Bromide
  • Radioactive elements
  • Barium
  • Strontium

Natural gas
There is a potential risk of natural gas seeping into underground drinking water supplies as there is methane below the ground naturally – this is why they are drilling. However, it’s important to note that natural gas can appear in shallow aquifers even in areas where no drilling is taking place. Aqua has experienced this in other states.

Anywhere we have found methane that is naturally occurring there has not been a health risk and reasonable treatment methods exist to remove natural gas from public water supplies prior to ingestion. This may be difficult for small private wells due to lack of economies of scale.

There are no drinking water standards for natural gas in water, and water suppliers rarely tested for it in the past. Aqua now includes testing for natural gas – specifically methane, ethane and propane by method RSK‐175 – as part of the suite of background testing we do on water supply wells in Pennsylvania where natural gas drilling is planned or underway.

Among the conclusions of a recent study by Duke University is a finding consistent with the EPA (2004 study), the DEP, and industry experts that chemicals used to frac a well – frac fluid – have not appeared in shallow ground water. However, that’s not what we read in the newspapers. The headlines focused on another finding that the DEP also confirmed some time ago, that methane was found at elevated levels in some shallow private wells in areas where gas exploration also had occurred. Pre‐drilling baseline data was not available for the wells in Duke’s study, and the study recommends that such testing be conducted in the future to more conclusively separate causality from co‐occurrence.

The Duke study did not reveal anything new to the regulators, the industry or to Aqua There are well construction and engineering solutions to minimize the risk of methane migration into shallow ground water, and there are water treatment methods to deal with methane in ground water whether it occurs naturally or is mobilized by drilling activity.

Bromide
Bromide sometimes occurs in salts that are present underground and can be picked up by the flowback water and brought to the surface. Recent surface water sampling has found elevated levels of bromide in rivers in the western portion of the state, where the majority of natural gas drilling is taking place. But to be fair, there are other common sources that contribute to an elevated level of total dissolved solids (TDS), most notably the use of salts for de‐icing roadways in the winter. This past winter, we saw a significant impact to our water sources from the use of road salts. Bromide is not a public health concern unless it reacts with other elements in the disinfection process to form trihalomethanes (THM) at levels above safe drinking water standards. Therefore prevention is the best treatment. So we applaud the Corbett Administration’s decision to ban delivery of flowback water to wastewater treatment plants that cannot remove bromide and TDS.

TDS has not been a routine parameter for which Aqua tests, but conductivity is often used as a surrogate for TDS, and Aqua tests for conductivity routinely. Our suite of background testing includes both conductivity and TDS.

Radioactive materials
Like bromide, radioactive elements are naturally occurring underground and could be brought to the surface with the flowback of the fracking fluid. DEP has conducted tests in areas downstream of where treated flowback water was released and did not find any elevated levels of radioactive materials. We are conducting testing at our water treatment plants and have not found elevated levels of radioactivity.

Barium and strontium
Barium is one of the most ubiquitous regulated drinking water contaminants. It occurs at measurable levels in almost every natural water source, but almost never at levels above the drinking water standard. Barium is very much like calcium chemically, but because it is a heavier element it is sometimes used in drilling mud or to plug oil and gas wells. It is not as soluble as calcium, and there are very few documented cases of barium from drilling operations actually contaminating a water source.

Aqua tests for barium routinely and has never found levels above drinking water standards in any source in Pennsylvania.

Strontium is chemically similar to barium but is rarely detected in water. There is no drinking water standard for strontium. A man‐made radioisotope of strontium, strontium 90, was in the news in the 1950s because it was a component of nuclear fallout from atomic bomb testing. There is no connection between that form of strontium and naturally occurring strontium.

Background testing performed by Aqua will detect strontium if present.

WHAT IS AQUA DOING NOW?
Aqua Pennsylvania is coordinating with DEP on Marcellus activities, and we have reviewed existing safeguards as well as recommendations for future regulations (Act 92). We believe that there is low potential for adverse impacts on our water supplies from Marcellus Shale drilling activity in large part due to DEP’s effective regulations coupled with enforcement. To support DEP monitoring activities, we are taking steps to establish baseline water quality information for our supplies. We will be monitoring water quality more frequently and extensively than required by regulation whenever drilling activity is occurring anywhere near one of our well supplies so that we can detect and respond to any water quality changes that might occur.

We employ broad‐spectrum semi‐quantitative scans for elements, ions and volatile organics, and quantitative testing for gases such as methane, ethane and propane in areas where drilling activity is occurring to establish pre‐drilling baseline conditions and monitor for potential impacts. We’ve added testing for natural gas components – methane, ethane and propane – to establish a baseline in case of future problems.

The baseline and follow‐up testing that Aqua performs goes beyond the testing ordered by DEP for the couple dozen sources – including Emlenton – that were singled out as potentially susceptible to impacts from discharges of treated flowback water.

EMLENTON
Aqua owns and operates a public water system in Emlenton in Venango County, the heart of gas and drilling activity. We received a letter from DEP dated March 11, 2011 requiring special testing for this system as it was one of 20 or more systems identified by DEP as potentially vulnerable to impacts from discharges from facilities treatment flowback water from fracing operations.

We collected the samples on April 6, 2011. We conducted tests in our certified laboratory for TDS, pH, alkalinity, chloride, sulfate, bromide and uranium, and sent the radium samples to a lab certified for those results. All of the results were well below EPA standards.
• Chloride 39 mg/L 4/12/11 EPA 300.0
• Sulfate 15 mg/L 4/8/11 EPA 300.0
• Uranium N.D. 4/8/11 EPA 200.8
• Alkalinity 60 mg/L 4/8/11 SM 2320B
• TDS 144 mg/L 4/12/11 SM 2540C
• Bromide 0.03 mg/L 4/8/11 EPA 300.1
• Less than 1 pCi/L for combined radium. The MCL is 5 pCi/L.

We do not believe that DEP should be mandating specific testing for targeted water suppliers at the water supplier’s expense. Waste generators and dischargers should be responsible for this monitoring.

We strongly support DEP’s recent policy to end the use of conventional wastewater treatment plants which were not specifically designed or equipped for treatment of wastewater from drilling operations prior to disposal into our Commonwealth’s surface waters. We believe the new DEP standards on TDS implemented in January 2011 allow for the adequate managment of flowback treatment. New rules restricting the treatment of flowback water at municipal plants that cannot properly treat it is an important move in protecting downstream water sources.

Aqua encourages the use of continuous water quality monitoring station networks such as the RAIN program in the Ohio basin and the SRBC monitoring network in the Susquehanna basin where possible. We support the measures that DEP, SRBC, the RAIN network have already taken to monitor for potential water quality impacts from gas drilling. SRBC has established a network of more than 30 continuous water quality monitoring stations in the Susquehanna River basin (http://www.srbc.net/programs/remotenetwork.htm).

We support DEP’s implementation of more stringent standards for the construction of gas wells, including requirements for casing and grouting.

In February 2011, a new Pennsylvania law took effect which strengthened oil and gas regulations to improve well construction standards. Specifically, the new regulations will:

  • Require the casings of Marcellus Shale and other high‐pressure wells to be tested and constructed with specific, oilfield‐grade cement;
  • Clarify the drilling industry’s responsibility to restore or replace water supplies affected by drilling;
  • Establish procedures for operators to identify and correct gas migration problems without waiting for direction from DEP;
  • Require drilling operators to notify DEP and local emergency responders immediately of gas migration problems;
  • Require well operators to inspect every existing well quarterly to ensure each well is structurally sound, and report the results of those inspections to DEP annually; and
  • Require well operators to notify DEP immediately if problems such as overpressurized wells and defective casings are found during inspections.

The new laws were developed with the Industry and regulators working together to achieve best practices. If there are adverse impacts to water supplies as a result of Marcellus Shale drilling activity, we’d look to drillers for compensation toward treatment or replacement of supply. We also believe it would be a good idea for flowback water to be tested before being taken offsite.

With our understanding that there will no longer be discharges of treated flowback water from wastewater plants, and the implementation of continuous water quality monitoring stations, there is no reason to burden water suppliers with more testing requirements. Aqua would welcome a voluntary mutual sharing of information with DEP and wastewater dischargers. We have also had discussions with legislators about setbacks from existing water supply wells.

HOW IS WASTEWATER BEING TREATED
Aqua has been encouraged by the drilling industryHOW IS WASTEWATER BEING TREATED Aqua has been encouraged by the drilling industry, DEP, and other state and regional regulatory agencies to lend its expertise to analyze the challenges presented by the development of the Marcellus Shale, specifically in the management and treatment of production and flow‐back water resulting from drilling operations into the shale formation.

Currently, some drillers use recycling equipment at the well site or truck the water to a dedicated recycling facility. The wastewater is filtered, evaporated and in some cases then used again at another well.

Companies are also adding fresh water to the flowback water to dilute the salts and contaminants before reusing it for hydrofracking.

We believe that any treatment method should:
• Protect our aquifers and waterways from pollution or impacts of drilling, as much of the state depends on groundwater as the source of drinking water
• Prevent high TDS flow‐back water discharge by drillers into surface water, whether directly or through a wastewater treatment plant.

This is an industry that is still in a period of increasing activity and at this time there may be greater opportunities to recycle flowback water. When drilling activity plateaus or begins to decline, there may be a greater need for treatment capacity.

AQUA’S ROLE IN SUPPLYING WATER
Aqua supports sustainable water resource management. We also support water supply solutions for all industrial uses in Pennsylvania that are environmentally sound and are in accordance with regulatory oversight. Aqua will only consider furnishing water supply solutions for residential, commercial or industrial demands that meet with state policy objectives and regulatory requirements for the intended use.

A small quantity of water is being used by the Marcellus Shale industry now as compared to other industries such as electric power plants, golf courses, and even public water supplies. However, the delivery system – 5,000‐gallon trucks versus sophisticated infrastructure – is causing isolated problems.

It’s in Pennsylvania’s best interest to have water supply managed by professional organizations such as Aqua and large municipal systems that have the expertise and the means to monitor flows and account for water use. We’ve seen the impact of a disorganized process to provide the resources necessary for development of Marcellus Shale.

We believe that one effective solution is to create bulk water stations. Currently Aqua has three bulk filling stations in operation with three additional locations planned. They are located in Northeastern and Western Pennsylvania and are strategically placed just off some of Pennsylvania’s interstates such as Interstate 80 (Emlenton) and Interstate 376 (Pulaski). We are providing water filling stations in suitable locations to help move truck traffic out of towns and neighborhoods. This is significant as just one well can require as many as 750 to 1,000 truck loads of water.

We believe that one effective solution is to create bulk water stations. Currently Aqua has three bulk filling stations in operation with three additional locations planned. They are located in Northeastern and Western Pennsylvania and are strategically placed just off some of Pennsylvania’s interstates such as Interstate 80 (Emlenton) and Interstate 376 (Pulaski). We are providing water filling stations in suitable locations to help move truck traffic out of towns and neighborhoods. This is significant as just one well can require as many as 750 to 1,000 truck loads of water.

CONCLUSION
We believe it is in Aqua’s best interest, in conjunction with DEP, SRBC and EPA, to develop the capability to provide the services which would allow for the continued exploration of natural gas in an environmentally responsible and safe manner.

Aqua shares the Commonwealth’s commitment to fully engage in the development and implementation of responsible strategies for water supply delivery, treatment, and recycling of flow‐back water produced by development of the Marcellus Shale.

As one of the state’s – and the nation’s – largest water utilities, Aqua wishes to remain involved in the ongoing dialogue on this issue and contribute to the implementation of best practices. Marcellus Shale has the potential to provide Pennsylvania with an economic boost well into the future if it’s done right environmentally.

Thank you for the opportunity to present testimony today and I am happy to answer any
questions you might have at this time.

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