PA Municipalities Profit by Selling Water for Fracking

Pennsylvania municipalities have found a new market in the Marcellus drilling industry for excess fresh water and for treated sewage wastewater. The going rate they receive, depending on whether it’s fresh water or treated wastewater, is between $2 and $6 per 1,000 gallons. In some cases, the sale of water used in hydraulic fracturing of Marcellus gas wells is netting millions of dollars in extra revenue for state and local organizations.

The Bellefonte Borough Water Authority [Centre County, PA] has sold its water to drillers and gas well service companies “for years,” according to assistant borough manager Don Holderman. Since it’s licensed to withdraw up to 5 million gallons of water per day from the aquifer, but only requires about 2 million to meet the borough’s needs, selling the excess water was a logical decision, Holderman said.

Last year, the authority made $300,000 selling its water at $6 per 1,000 gallons to Anadarko, Exco, A&A Construction and RN Industries. Companies connect to the source through a hook-up in the Penn Eagle Industrial Park. This year, the authority is on pace to sell $250,000 worth of water.

“Primarily, all the money goes into our water fund, where it’s used in the general operating budget,” Holderman said.

Other groups have also gotten into the business of selling water to the drillers.

The state Fish and Boat Commission in April signed a contract with Williams to allow withdrawals from Westmoreland County’s Donegal Lake that could net millions in revenue. The commission made the agreement, along with a separate decision to lease land for drilling, in order to raise money to replace the aging dams it owns across the state.

Locally, the University Area Joint Authority has also attempted to sell its beneficial reuse water — wastewater that has been treated and purified — to the drilling industry, which uses about 3.6 million gallons to frack an average well in Centre County.

It received approval from the Centre Region Council of Governments Public Service and Environmental Committee last year to do so, and entered into an agreement to sell up to 400,000 gallons of water per day to Exco Resources at $2 per 1,000 gallons. The deal would also require Exco to pay the costs of upgrading the road to the treatment plant.

“So far they haven’t taken a drop,” UAJA Director Cory Miller said.

The UAJA is too far away from the drilling sites to be cost effective, unless a drought or other significant event makes closer water withdrawal sites untenable, Miller said.*

*Centre Daily Times (Aug 7, 2011) – Fracking water netting revenue