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Cost Effective Solutions For …. Today’s Problems

LEWIS ENVIRONMENTAL

FRAC WATER DISPOSAL / RECYCLING

PROCESSES FOR UNCONVENTIAL SHALE GAS

WASTE WATER

by Tom Lewis III


CURRENT STATUS… • SERVICE ORGANIZATION, INCORPORATED IN JANUARY 1991 • COMPANY HAS TWO PATENTS - HEAVY METALS REMOVAL AND CYANIDE DESTRUCTION TECHNOLOGIES • PATENT PENDING SHALE GAS WATER RECYCLING PROCESS

CORPORATE CAPIBILITIES • OEM – CORE TECHNOLOGY: PATENTED GAC PROCESS • WATER AND SOIL REMEDIATION CAPABILITIES • SYSTEM ENGINEERING AND CAD DESIGN

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•Crane Naval Base


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TRILLION DOLLAR

NATURAL GAS RESERVE


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y g "Fracking” :injecting water, sand and special chemicals UNDER HIGH PRESSURE into the shale layer separates the pores in the rock sand particles "hold" the cracks open RELEASES NATURAL gas FLOWBACK: 35% - 40% OF INJECTED WATER IS RECVERD FROM THE WELL. NASTY STUFF: fluids CAN qualify as hazardous material TOXIC LEVELS OF carcinoge

Hydraulic Fracturing… • FRACING” - INJECTING WATER, SAND AND CHEMICALS UNDER HIGH PRESSURE INTO THE SHALE FORMATION. • SEPARATES THE PORES IN THE ROCK , SAND "HOLD" THE CRACKS OPEN – RELEASES GAS FLOWBACK: 20% - 25% OF INJECTED WATER IS RECOVERED FROM THE WELL. • NASTY STUFF: THERE’S AS MUCH AS TWO POUNDS OF SALT IN A GALLON OF FRAC WATER.


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HYDROFRAC REQUIRES 6,000,000 GALLONS WATER THAT’S 1200 TRUCKLOADS OF WATER OR 9 OLYMPIC SIZE SWIMMING POOLS


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HOW DO THEY COMPARE?

SHALE PLAY BARNETT MARCELLUS LOCATION FORT WORTH, TX

2/3 OF PA, PARTS OF NY and WV

WATER SOURCES SOME WHAT SCARCE OR LIMITED

WATER IS PLENTIFUL. 2ND LARGEST WATER WAYS

DISPOSAL OPTIONS

10,000 DISPOSAL WELLS

8 DISPSOAL WELLS AND 6 TREATMENT PLANTS

FLOWBACK% 60% - 70% FLOWBACK INITIAL STAGES

20% - 25% FLOWBACK IN INITIAL STAGE

ORGANICS LEVELS

LOW % IN FRAC WATER

VERY WET GAS WITH HIGHER SOLUBLE ORGANICS

TWO BIGGEST DIFFERENCES IN THE PLAYS… 1 - LIMITED DEEP WELL INJECTION OPTIONS AND 2 - HIGHER ORGANICS AND TDS CONCENTRATIONS


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HYDROFRAC REQUIRES 4,000,000 GALLONS WATER THAT’S 800 TRUCKLOADS OF WATER OR 6 OYLIMPIC SIZE SWIMMING POOLS


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Flowback Samples MEASUREMENT A B C D pH 5.93 5.83 5.95 5.89 SODIUM 548 43 629 1 477 34 54 CALCIUM 3,600 15,680 6,800 15,200 MAGNESIUM 6,062 1,770 899 4,730 BARIUM 547 112 127 98 IRON 1,274 60 105 92 MANGANESE 99.6 1.4 1.7 1.8 BICARBONATE 415 183 348 195 SULFATE 10 10 20 60 CHLORIDE 93,000 35,000 68,000 125,000 TDS 148,016 54,230 110,847 200,000


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BARNETT – MARCELLUS SHALE COMPARISON

BARNETT 1 BARNETT 2 MARCELLUS pH 6.8 5.8 5.9 Alkalinity 480 360 56 Iron 0.50 63 38 Aluminum <0.1 0.50 1 Calcium 1,400 10,400 1,300 Magnesium 180 880 100 Chloride 23,100 95,750 16,400 Manganese 1 5 2 Silica 29 14 12 Sulfate 32 430 20 TDS 39,800 176,400 29,000


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FLOWBACK ANALYSIS OVER TIME

ITEMS INFLUENT A

FLOWBACK A DAY 14

INFLUENT B

FLOWBACK B DAY 14

Sodium 6,190 32,500 88 31,500 Calcium 2,990 12,500 21 7,820 Magnesium 3.6 7.0 3.7 725 Iron 11.6 39.8 0.9 41 Barium 9.8 58 0.28 569 Chloride 10,700 78,600 75 67,100 Bicarbonate 31 56 46 56 Ammonia 9.3 107 3.6 121


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2011 RECYCLING/FLOWBACK TREND ANALYSIS

ITEMS FLOWBACK YEAR 2009

FLOWBACK YEAR 2011

Sodium 12,200 31,000 Calcium 7,500 19,500 Magnesium 570 1,680 Iron 39 109 Barium 95 3,310 Strontium 103 4,040 Chloride 80,200 148,000 Bicarbonate 36 56 Ammonia 107 135

SUMMARY… •CHLORIDE CONCENTRATION INCREASED BY 100%. •BARIUM AND STRONTIUM CONCENTRATIONS INCREASED 30 – 40 TIMES. •CALCIUM CONCENTRATION INCREASED 2 – 3 TIMES. •TDS LEVELS INCREASED 2 – 3 TIMES.

THESE INCREASES ARE GAME CHANGERS


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WATER MANAGEMNT TRENDS… SMALL and MEDIUM SIZE DRILLERS • OFF-SITE DISPOSAL COSTLY TRUCKING AND DISPOSAL FEES LARGE SIZE DRILLERS

• REUSE “DIRTY” FRAC WATER AND FRESH WATER • DEEP WELL INJECT CONCENTRATED BRINE WATER

LOSS OF VALUABLE WATER AND RECOVERABLE RESOURCES


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DIRTY FRAC WATER

DIRTY FRAC WATER

FILTRATION

RECYCLED

FRAC WATER

DEEP WELL INJECTION

FRESH WATER

FRAC WATER MANAGEMENT

DRILL SITE

ENVIRO-SHALE

PROCESS

2nd

FRAC WATER RECYCLED 5 – 6 TIMES

ELIMINATE DEEP WELL INJECTION


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FRAC AND PRODUCED WATERS ARE TRANSPORTED TO VARIOUS TREATMENT AND MUNICIPAL FACILITIES. BASED ON NEW DEP REGULATIONS SCHEDULED TO BEGIN IN 2011, THERE ARE NO FACILITIES CURRENTLY IN OPERATION WHICH CAN MEET THE NEW DISCHARGE LIMITS. THERE IS A “REAL” NEED FOR PROCESSING CAPACITIY.


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MARKET SIZE… • HUGE MARKET – 10,000 WELLS IN THE NEXT 5 YEARS • PROJECTED WATER USAGE - 28,000,000 GALLONS PER DAY (5,000 TRUCKLOADS/DAY) • DISPOSAL VOLUME – 1.85 BILLION GALLONS PER YEAR • NATURAL GAS REVENUES TO PA - $1.2 TRILLION • THE ISSUES WITH WATER USAGE AND DISPOSAL MUST BE ADDRESSED IF THE STATE IS THE REALIZE THESE REVENUES.


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FRAC WATER TREATMENT CHOICES… • ENVIRO-SHALE PROCESS – ZERO DISCHARGE • OZONE DESTRUCTION TECHNOLOGY • REVERSE OSMOSIS (RO) •DISTILLATION AND EVAPORATION • CRYSTALLIZER LET’S REVEIW HOW EACH ONE WORKS


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OZONE STRENGTH WEAKNESS

ALLEGHENY OZONE SOMERSET, PA

DESTRUCTS ORGANIC COMPOUNDS

NEEDS ELECTRICITY TO MAKE OZONE

ECOSPHERE TECHNOLOGIES DELAWARE CORP.

PATENTED PROCESS

VERY EXPENSIVE CAPITAL EQUIPMENT HIGH ENERGY CONSUMPTION STILL HAS WASTE STREAM

DISTILLATION STRENGTH WEAKNESS GE WATER (USA)

RECOVERS AND CONCENTRATES FINANCIALLY STRONG

EXPENSIVE EQUIPMENT HIGH ENERGY CONSUMPTION

FOUNTAIN QUAIL (USA) PURE STREAM

INDUSTRY ACCEPTANCE

CONCENTRATE DISPOSAL HIGH MAINTENANCE COSTS TDS LIMITS


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CRYSTALLIZER STRENGTH WEAKNESS GE WATER (USA)

CONCENTRATES HIGH TDS FEEDSTOCKS FINANCIALLY STRONG

VERY EXPENSIVE EQUIPMENT HIGH ENERGY CONSUMPTION

AQUA-TECH (USA) NO UNITS IN MARCELLUS PLAY

CONCENTRATE DISPOSAL HIGH MAINTENANCE COSTS


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Brine Concentrator/Crystallizer

EXTENSIVE RECYCLING OF FRAC FLUIDS HAS REDUCED THE EFFECTIVENESS OF RECOVERY TECHNOLOGIES DUE TO THE HIGH TDS AND CONTAMINANT CONCENTRATIONS


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THE SOLUTION … • ENVIRO-SHALE PROCESS - ZERO DISCHARGE PROPRIETARY TECHNOLOGY (PATENT PENDING) • PRODUCES HIGH PURITY WATER FOR REUSE • RECOVERS BRINE AS SALEABLE SALT • ELIMINATES LARGE VOLUMES OF FLOWBACK DISPOSAL • ON-SITE TREATMENT CAPABILITY

SAVES MONEY AND RESOURCES WHILE IMPROVING THE ENVIRONMENT


Cr


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TWO MAJOR ISSUES INTERSECT… PENNSYLVANIA’S HIGH TDS NEW SOURCE REGULATIONS & ZERO DISCHARGE FRAC WATER RECYCLING TECHNOLOGY

WORKING TOGETHER BOTH WIN


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TITLE 25 PA CODE CHAPTER 95... NEW SOURCES OF HIGH TDS WASTE WATERS AFTER SEPTEMBER 1, 2010

SHALE GAS WASTE WATER DISCHARGE LIMITS

TOTAL DISSOLVED SOLIDS 500 mg/l TOTAL CHLORIDES 250 mg/l TOTAL SULFATES 250 mg/l TOTAL BARIUM 10 mg/l TOTAL STRONTIUM 10 mg/l

MAY, 2011 – PA GOV CALLED FOR A VOLUNTARY STATEWIDE MORATORIUM ON DISPOSAL AT MUNICIPAL WATER PLANTS


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ENVIRO-SHALE PROCESS (ESP) TWO STAGE PROCESS • 1st STAGE – REMOVES OIL/GREASE, ORGANICS AND IRON • 2nd STAGE – REMOVES TRACE ORGANICS AND NONDESIRED INORGANIC CONSTITUENTS • ESP EFFLUENT IS CLEAR AND ORGANIC FREE • HIGH PURITY BRINE STREAM FINAL STEP IS DISTILLATIVE RECOVERY FOR SALEABLE SALT AND HIGH PURITY WATER DISTILLATE


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BRINE WASTE

• COLLECTION SYSTEM • EQUILIZATION

TREATMENT SYSTEM

• pH ADJUSTMENT • METALS REMOVAL

CLARIFICATION

• LAMELLA FILTER • SLUDGE THICKER • FILTER PRESS

FINAL DISCHARGE

• FINAL EFFLUENT DISCHARGE • FILTER PRESS SLUDGE

CONVENTIONAL TREATMENT SYSTEM

REMOVES HEAVY METALS, DIRT OIL &

GREASE AND LIMITED ORGANICS

CHLORIDES ARE NOT

REMOVED


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UPGRADE

• UPGRADED CONVENTIONAL TREATMENT W/ ESP REAGENTS

ESP ESP PROCESS

• EFFLUENT POLISH • IMPURITY REMOVAL • REMOVES BARIUM and STRONTIUM

DISTILLATION

• HIGH PURITY DISTILLATE • SALEABLE BRINE SOLIDS

FINAL DISCHARGE

• FINAL EFFLUENT SOLD TO DRILLERS • BRINE SOLIDS SOLD TO 3dr PARTY USERS

ENVIRO-SHALE PROCESS w/ EVAPORATOR REMOVES HEAVY

METALS, DIRT OIL & GREASE AND SOME

ORGANICS - 80%

POLISHING STEP: ORGANICS & TRACE METALS REMOVED

PHASE 1 – RECYCLE WATER W/

CHLORIDES TO DRILLERS

FEED WATER CHARACTERIZATION

ITEM RAW VALUE

FEED RANGES

TDS 306,000 - 138,000 pH 7.4 - 5.4

TOTAL IRON 109 - 93

TOTAL CHLORIDE 185,600 - 130,000

TOTAL BARIUM

TOTAL STRONTIUM

CALCIUM

3,479

5,420

23,000

- 1,360

- 3,600

- 18,800

TOC 136 - 52


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ENVIRO-SHALE PROCESS RESULTS

ITEM AVERAGE EFF VALUE

% REMOVAL

TDS 153,700 14.0 CARBON DIOXIDE 14.1 71.6

TOTAL IRON 0.2 99.9

TOTAL CHLORIDE 126,300 18.5 TOTAL BARIUM

TOTAL STRONTIUM

CALCIUM

740

3,742

19,003

72.1

22.0

6.2

TOC 27 69.0


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RAW FRAC

WATER

ESP EFFLUENT

ENVIRO-SHALE PROCESS TEST RESULTS

ITEM RAW FEED

ESP 1&2 FINAL DISTILLATE

% REMOVED

TDS 181,000 191,000 406 99.77%

pH 5.63 6.42 6.82

TOTAL IRON 143 <0.1 <0.1 99.93%

TOTAL CHLORIDE 78,000 71,900 95 99.87%

TOTAL BARIUM

TOTAL STRONTIUM

OIL & GREASE

95.3

108

77.0

1.04

7.94

<5

<0.1

<0.1

<5

99.89%

99.90%

99.70%

TOC 62.76 0.61 <0.1 99.84%


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•THIS MEETS THE NEW HIIGH TDS

DISCHARGE LIIMITS


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BARNETT SHALE TREATMENT OPTION

DEEPWELL THERMAL ENERGY

DISPOSAL - $1.47 TRANS; $2.00 DEEP WELL FEE $ 3.474 x

WATER RECYCLE - $ 2.52 @ 80% WATER RECOVERY

x $ 2.52

BRINE DISPOSAL - $3.47 @ 20%

x $ 0.69

WATER RECOVERY- $ 1.35 BBL

x -$ 1.35

TOTAL COST PER BARREL $ 3.47 $ 1.86 RECOVERY SAVINGS 46.4%


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MARCELLUS SHALE TREATMENT OPTION

DEEPWELL THERMAL ENERGY

ZERO DISCHARGE

DISPOSAL - $10.50 TRANS; $2.93 DEEP WELL FEE $ 13.444 x x

WATER RECYCLE - $ 8.40 @ 70% WATER RECOVERY

x $ 8.40 $ 10.50

BRINE DISPOSAL - $13.44 @ 30%

x $ 4.03 - 2.00

SALT RECOVERY- $50/TON; 80,000 mg/l Cl; 30%

x x - 1.39

TOTAL COST PER BARREL $ 13.44 $ 12.43 $ 7.11 RECOVERY SAVINGS 12.5% 47%


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•MOBILE PROCESSING IN THE FIELD WOULD SAVE AN

ADDITIONAL $3.15 BBL


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SUMMARY… ZERO DISCHARGE RECYCLING TECHNOLOGIES WILL POSITIVELY IMPACT MARCELLUS SHALE DRILLING EXPLORATION. PROVIDE VIABLE WATER MANAGEMENT SOLUTION. REDUCE COST AND ENVIRONMENTAL IMPACT.

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