Coast Guard Walks Back Approval of Frac-Water Barging

The Waterways Journal
29 February 2016
By David Murray

On February 23, the Coast Guard announced that it had withdrawn an October 30, 2013, proposed policy letter concerning the carriage of shale gas extraction waste water (SGEWW), sometimes called frac water, in bulk via barge. The decision left open the possibility of the Coast Guard approving the barging of such water “under existing regulations.”

The policy letter proposed a new standardized process and specified conditions under which a barge owner could request and be granted a Certificate of Inspection or letter allowing the barge to transport SGEWW in bulk.  “That proposed policy is withdrawn and no new policy is proposed at this time,” the Coast Guard said. “Barge owners may continue to request case-by-case approval to transport SGEWW under current regulations by providing recent detailed chemical composition, environmental analyses, and other information for each individual tank barge load. The Coast Guard will consider instituting a standardized process for transporting SGEWW in bulk after it has assessed whether current regulations are inadequate to handle requests for transport of SGEWW in bulk and environmental impacts that may be associated with SGEWW transport by barge.”

Under existing regulations, such water is considered an “unlisted cargo.”

In a somewhat confusing part of its withdrawal notice, the Coast Guard said, “In order to carry SGEWW on a tank barge, the vessel owner must request permission from the Coast Guard, provide the information about each individual cargo that the Coast Guard needs in order to analyze potential impacts and develop carriage requirements, and then comply with the regulations specified. Although the proposed policy letter would have standardized that information and request process for SGEWWs, withdrawal of the policy letter does not change the Coast Guard’s authority to consider approving unlisted cargoes on a case-by-case basis under the existing regulations.

Amanda Finn, spokeswoman for GreenHunter Water LLC, whose business model is built on treating and transporting—including by barge—water used in fracking, told The Waterways Journal that the issues involved are much more detailed than have been reported in the press.

According to Finn, the walk-back of the policy letter came at the direction of the Office of Management and Budget, a White House agency, during a final review of the proposed policy.

Hydraulic fracturing, or “fracking,” injects water and small amounts of chemicals under high pressure to create tiny fractures within the rock that allow oil and gas to escape and be pumped upward. It has been in use since the 1940s, but the dramatic gains in oil and gas output in recent years have come by combining fracking with horizontal drilling to tap new sources of shale oil and gas in bedrock.

‘Vertical’ Vs. ‘Horizontal’ Water

GreenHunter Water LLC has been having regular discussions with the Coast Guard over its policy letter. According to Finn, the Coast Guard distinguishes between two types of “flowback” water collected after drilling.

“The Coast Guard believes that water used in horizontal drilling collects more radium from underground than that used in vertical drilling,” said Finn. She said the Coast Guard already freely allows the barging of “vertical water,” but wants to regulate “horizontal water.”

But as the price of oil and gas have travelled relentlessly downward, due to the great success of the frackers, drillers have learned to be much more efficient, in part by combining wells and by achieving the same output with fewer drill rigs. Part of that efficiency consists of finding new ways to use horizontal drilling to exploit older wells to the maximum.

By some estimates, U.S. rig counts number only one-third of what they were only a few years ago—yet output has remained steady. But that means there are fewer wells that use purely vertical drilling, and thus less “vertical water.”

According to Finn, it is no longer economical for companies like GreenHunter to separate out “vertical” from “horizontal” water for barging. “Most of our water is commingled,” she told The Waterways Journal.

The barging of water used in fracking water has been beset by environmental protests. In February 2013, a group of almost 100 activists protesting GreenHunter’s plans to barge water used in hydraulic fracturing overran a wastewater storage facility owned by GreenHunter Energy in New Matamoras, Ohio.

Disputes Over Words

The plans have also been marked disputes over the meaning of the words and phrases used to describe the water used in, and left over from, fracking.

Accounts in the popular media and on green activist websites regularly use terms like “radioactive and chemical waste” or “toxic waste” to describe the water, which is mostly brine with added sand (called the “proppant” since it props open the microscopic cracks) plus a few added chemicals that drillers have listed on industry websites for the past several years.

Popular accounts also sometimes fail to distinguish between water formulated for the process of fracking and that collected afterwards.

In January of last year, GreenHunter announced to its shareholders during a conference call that it had finally received U.S. Coast Guard approval to barge the frac water.
That statement was at the center of a complaint filed in June with the Securities and Exchange Commission by a group calling itself the FreshWater Accountability Project, which challenged GreenHunter’s statement that it had Coast Guard approval.