Marcellus drill waste could be lucrative for area landfills

REGION

PAY DIRT

Waste from drilling Marcellus Shale gas wells in the northern and western parts of the state will likely become an important revenue stream for some Central Pennsylvania landfills, companies and municipalities.

The Cumberland County Landfill already is accepting drill cuttings - dirt and pulverized stone from the gas wells - and another midstate landfill is poised to accept such waste this year. Drilling companies have been shipping the waste to New Jersey-based Interstate Waste Services' Cumberland County Landfill in Hopewell Township since November.

Modern Landfill in York County, a property of Arizona-based waste company Republic Services Inc., is negotiatingwith companies to accept drilling waste this year, local executives said.

The Cumberland County Landfill is accepting about five to six trucks with a total of 60 tons of drill cuttings a day, said Bill Neidigh, a spokesman for Interstate Waste Services. The landfill is licensed to take a total of 1,950 tons per day for all wastes and averages 1,500 tons per day, he said.

The landfill is permitted to take up to 2,000 tons of Marcellus drill cuttings per well from two companies, East Resources Management and Talisman Energy USA Inc., said Dusty Hilbert, the landfill's compliance manager.

East Resources is part of Shell Appalachia, a division of Houston-based Shell Oil Co. Shell acquired oil and gas company East Resources in IuIy as part of its expansion in Marcellus gas drilling. It owns drilling rights to 700,000 acres in the Marcellus play, according to the company.

Talisman Energy USA is a natural gas exploration company based in New York. It has more than 100 wells in New York and Pennsylvania's Marcellus Shale and drill leases on more than 1.2 million acres of land in those states, Ohio and West Virginia, according to the company.

Some days, more than 100 tons of material is shipped to the landfill, Hilbert said. He did not have revenue information for the contracts. It's still early to say what the total impact of Marcellus waste will be to the revenue of waste companies, he said.

"There's been a lot of rush to get wells drilled, and I think that will slow down in time," Hilbert said. "As it does, it could slow down for us, too. But I can't say for certain."

Others see a significant industry trend, which could mean hundreds of thousands of dollars for landfills.

"A lot of companies are shopping price right now," said Tim O'Donnell, general manager of Modern Landfill in Lower Windsor Township. "You're going to see Marcellus Shale drill cuttings in most landfills around the state soon."

Modern Landfill has been approached by several companies looking for space to deposit an unspecified amount of residual waste from Marcellus drilling, he said. He declined to release the names of the companies.

How much waste Modern Landfill takes depends on howmuch drill companies want to truck to York County, he said. Moving 500 tons a day would take about 25 truckloads, which could be an enormous expense for a company, he said. Costs for drivers and fuel make trucking expensive, which is why the south central and southeastern landfills are just now beginning to see drilling waste, he said.

If drill companies have more waste than they can ship to closer landfills under contract, the material has to be shipped elsewhere even if it's more expensive, Hilbert said. That's more opportunity for trucking companies as well, he said.

Modern is applying with the state Department of Environmental Protection to accept Marcellus waste, O'Donnell said. The landfill's license allows it to take up to 5,000 tons per day of municipal or residual waste and it's operating at 90 percent capacity, he said.

Before DEP approves a residual permit, landfill companies have to include a physical and chemical characterization of the Marcellus waste and it has to fit into the landfill's existing plan, said Steve Socash, chief of the municipal and residual waste division of DEP's Bureau of Waste Management.

Drill companies and landfills test the soil for contaminants, including radioactive isotopes, he said. Because of the large investment that landfill companies have, they're thorough in testing, he said. If a landfill doesn't want residual waste, it doesn't have to accept it, he said. The DEP also monitors air quality, runoff and leachate contents at all landfills for contaminants, he said.

The department has cleared 20 of the state's 48 landfills to acceptMarcellus waste, he said. Today, most of the Marcellus drill cuttings are going to western and northern landfills closest to drill sites, he said.

"It's just a fraction of the residual waste thatlandfills are taking, andmost are capable of handling it with the capacity they have," Socash said.

Transportation costs have reduced out-of-state waste going to Pennsylvania's landfills, which frees up capacity, he said.

"The farther you are away from the core area where they're drilling, the more expensive it becomes to truck it to the landfill," said Robert Zorbaugh, chief operating officer of the Lancaster County Solid Waste Management Authority, which manages the Frey Farm Landfill.

The site, above the Susquehanna River in Manor Township, can accept Marcellus waste, but no drill companies have proposed contracts, Zorbaugh said. Frey Farm is capable of accepting 2,000 tons a day, he said. The landfill is operating at less than 1,000 tons a day.

The landfill accepts residual waste and contaminated soils on a case-bycase basis, according to its fee schedule. However, it assesses a minimum fee of $30 per ton, along with a $4 per ton Growing Greener fee, which goes backto the state for waste and recycling programs.

Marcellus drill cuttings could become a significant revenue stream depending on howmany tons companies are willing to ship this way, Zorbaugh said.

New residual wastes also mean more money for townships, said Thomas Imphong, executive director of the Cumberland County Recycling & Waste Authority. Landfills have to pay a minimum of $1 per ton to municipalities for all waste accepted, he said. Landfills are not required to pay fees to counties, he said.

While many landfills are open to the option of taking Marcellus drill waste to help pad the bottom line, others will not accept imported waste.

The Greater Lebanon Refuse Authority's landfill in North Annville Township will remain on the sideline of the Marcellus waste trend, Executive Director Michael Pavelek said. Since 1986 when a lined-landfill expansion was planned, Greater Lebanon only accepts waste from Lebanon County, he said.

Even with those fewlandfills that do not accept outside waste, the business of Marcellus waste will be competitive in coming years, waste companies said.

"We're all gearing-up to deal with this process," O'Donnell said.

[Sidebar]

Marcellus Shale drill cuttings, in the foreground, wait to be comingled with other waste at the Cumberland County Landfill. Marcellus waste could mean hundreds of thousands of dollars for landfills in Central Pennsylvania.

[Author Affiliation]

BY JIM T. RYAN

jimr@journalpub.com