DESMOG.com
Justin Nobel
Sep 19, 2023
The legal battle over a treatment plant built by French multinational Veolia points to a hidden source of oil industry harm.
In rural West Virginia, largely hidden among steep hills, stands a $255 million facility designed to transform fracking waste into freshwater and food grade quality salts. Proponents hailed it as one of the most important environmental projects undertaken by the oil and gas industry in recent U.S. history. But local conservation groups and residents remained skeptical from the start, warning that the plant could leak toxic waste into water and air, harming human health and ecosystems in a largely forested region where tight-knit communities live close to the land.
The facility, called Clearwater, was built by the Denver, Colorado-based oil and gas extraction company, Antero Resources, and an affiliate of Veolia, the multinational French waste, water and energy management company. It lies in the heart of north central Appalachia’s booming Marcellus and Utica gas fields — America’s top natural gas-producing region — and was built to process 600 truckloads per day of fracking wastewater. Laden with heavy metals, chemicals and other contaminants, this waste frequently exhibits levels of radioactivity hundreds of times the safe limits set by regulators.
The developers’ hopes were initially high. At a meeting in September 2015 at the courthouse in Doddridge County, West Virginia, Conrad Baston, the general manager of civil engineering with Antero, suggested salt produced during the waste treatment process could be called, “Taste of the Marcellus,” after the gas-rich geologic formation from which it came. “It’s the best project like this in the world,” Kevin Ellis, Antero’s vice president of government relations, told a West Virginia newspaper in 2019. “Bar none. Period.” Ellis is currently Antero’s regional vice president in Appalachia, and Baston is still stationed with Antero in West Virginia.
Antero was to own the treatment plant and supply it with fracking waste from its nearby oil and gas extraction operations. Veolia would design, build, operate and maintain the facility under a 10-year agreement in return for more than $255 million, Antero said in 2015.
Clearwater began operating in November 2017, according to one drilling industry news site. But a mere 22 months later, the facility was idled, and Antero and Veolia are now locked in a half billion-dollar legal battle over the plant.
On March 13, 2020, Antero filed a lawsuit against Veolia in the District Court of Denver County, Colorado. The complaint, obtained by DeSmog via a public records request, accused the company of fraud, breach of contract, gross negligence, and willful misconduct, and demanded at least $457 million in damages.
“Clearwater was a failure,” reads the complaint. “Veolia promised[] a ‘turnkey’ facility” where Antero would “simply ‘turn the key’ and have everything function as intended” but “Veolia failed at every turn,” the complaint alleges. The filing further alleges that Veolia “started cutting corners even before the project started,” “hid” vital design flaws, and made modifications that were “ill-conceived, untested, and poorly implemented” and ultimately “doomed the commercial viability of the facility.” According to the complaint, the idling of the plant in September 2019 had nothing to do with a drop in natural gas prices, the reason Antero officials stated to a Pittsburgh newspaper at the time. The real explanation, the complaint alleges: “The facility simply did not work.”
Meanwhile, in extensive comments to DeSmog, Veolia has defended Clearwater. “Veolia has and continues to strongly disagree with Antero’s allegations,” said Carrie Griffiths, executive vice president and chief communications officer for Veolia North America. “In particular, Veolia emphatically denies that it committed fraud.”
On the same day that Antero filed its lawsuit, Veolia filed counterclaims for more than $118 million. On January 3, 2023, the Denver County district court found that Antero had prevailed on its claims for breach of contract and fraud, awarding the Colorado energy company approximately $242 million in damages, plus interest, and reasonable costs and attorneys’ fees. “We respectfully disagree with the court’s decision and will file an appeal against it,” Griffiths told DeSmog in late March. In April, the District Court reduced the amount of damages. As of late August, Veolia’s appeal in the Colorado Court of Appeals was still pending.
Antero did not respond to repeated requests for comment.
The oil and gas industry has long faced criticism for the role the carbon emissions from burning its products play in causing climate change. But the legal battle over Clearwater opens a window into a problem that has received far less scrutiny: A regulatory vacuum governing the industry’s radioactive waste. Multinational companies have seized lucrative opportunities to clean up this mess. But a lack of transparency has made it almost impossible for communities to hold such companies to account when projects fail, or understand the kinds of health or environmental risks they may pose.
“If they were coming from Europe and had a superior system that would actually free us from the pollution and the toxicity that would be welcome,” said Jill Hunkler, executive director of Ohio Valley Allies, a grassroots advocacy group fighting for environmental justice in northern Appalachia.
“But it doesn’t seem like that is what happened,” Hunkler said. “And because they are from another country, it is going to be much harder to hold them accountable.”
Business Opportunity
Long before Veolia broke ground on the Clearwater plant, building a facility to treat fracking wastewater looked like a promising commercial opportunity.
Known as “oilfield brine” or “produced water,” the wastewater created by the drilling industry has long proved a headache for oil and gas companies.
For the past several decades, most of this waste has simply been pumped back underground — an approach fraught with problems. Disposing of the wastewater in this way often requires lengthy road trips in gas-guzzling trucks to reach injection wells — also referred to as saltwater disposal wells — where the waste is injected deep into the earth. These controversial facilities often encounter local opposition. The U.S. Geological Survey has linked injection wells to earthquakes, and in Ohio, within the last two years, state regulators have determined that on four different occasions injection wells have leaked fracking wastewater into natural gas wells. A recent case attributed to nearby injection wells in Kingfisher County, Oklahoma, involved copious amounts of saltwater bubbling up out of the earth and into wheat fields.
“Produced water is by far the largest wastestream created by the upstream oil and gas industry and over 90 percent of it is injected in disposal wells,” said J. Blake Scott, a 30-year industry veteran, who used to run an oilfield service company. He is now president of Waste Analytics, a Texas-based oilfield waste data firm. Given the problems with injection wells, and transporting the wastewater to them, Scott said, the industry has pursued a variety of projects to treat and clean the waste, providing “the potential to make large sums of money for waste disposal companies.”
In a 2019 report, Florida-based financial services firm Raymond James & Associates recommended that potential investors should do their homework on the oilfield wastewater sector.
“Most investors are simply unaware of the fact that as crude production grows, produced ‘dirty’ water grows even faster,” the report said. “This growing dirty water problem should create opportunities for investors.”
But a combination of loose regulations and a lack of official data on oilfield brine has left industry free to shape the narrative for investors and the public on fracking waste treatment, painting this complex and dangerous wastestream as relatively harmless, DeSmog has found.
Both government and academic researchers have established that, despite the innocent-sounding name, brine contains toxic levels of salt, heavy metals such as lead and arsenic, and the radioactive element radium. “Analyses of the water produced with the gas commonly show elevated levels of salinity and radium,” a 2011 U.S. Geological Survey report noted. The best spots to look for gas, said a report on the Marcellus published in 2008 by the Pennsylvania Geological Survey, is not necessarily where the shale is thickest, but where levels returned by the Geiger counter are highest. “To put it simply,” the report states. “RADIOACTIVITY = ORGANIC RICHNESS = GAS.”
Pennsylvania regulators have found radium in brine of the Marcellus formation at levels thousands of times above the U.S. Environmental Protection Agency’s (EPA) safe drinking water limits, and hundreds of times above the level at which the EPA formally defines a wastestream as “radioactive waste.” Information provided by the EPA indicates the sludge that forms on the bottom of tanks and trucks that hold brine can contain even higher concentrations of radium, and also striking amounts of radioactive lead and polonium.
Fracking has added to this onslaught of toxic waste. Chemicals used in the fracking process return to the surface in the weeks and months after a well comes online, as a highly dangerous wastestream called “flowback.”
The EPA does not keep track of amounts of brine and flowback that issue from wells. But according to a 2021 report of the Oklahoma-based Groundwater Protection Council, the United States produces some three billion gallons of brine and flowback every day from both conventional wells and unconventional (fracked) wells. If a year’s worth of this oilfield wastewater were put into a standard oil barrel, and the barrels were then stacked atop one another, they would reach the moon and back nearly 22 times.
“Clean Products”
The Clearwater facility planned for Doddridge County, West Virginia, may have represented the oil industry’s biggest attempt to date to tackle this problem. The facility, according to Antero’s August 2015 press release, would take in approximately 60,000 barrels of Antero’s brine and flowback each day, or about 600 truckloads, saving the company millions of dollars on transport to injection wells, and enabling it to reuse treated water from the plant in fracking operations rather than pipe in freshwater. But neither Antero nor Veolia disclosed details on exactly how the plant would safely treat such a copious volume of this challenging wastestream.
Clearwater was going to transform 98 percent of the incoming wastewater, according to a set of frequently asked questions, and replies, about the facility that was posted on Antero’s website but is no longer up, “into clean products: salt and freshwater.” The treated water would be used to frack new Antero wells in the region, meaning drillers would no longer need to rely on West Virginia’s water resources for the water-intensive operation. As for the salt, state permits acquired by Antero indicated that the plant would generate approximately 4.25 million pounds (1,900 tonnes) of salt per day. Antero engineer Conrad Baston said a portion of the salt is “food grade quality” and could be used either for road salts, to melt snow and ice, or for other commercial purposes. Nevertheless, a description of the project on Antero’s website stated, “Antero has proposed an onsite landfill to safely and efficiently dispose of salts.” At the 2015 meeting at the Doddridge County Courthouse, Baston told the community, to some disbelief, that the landfill liner would last “thousands of years.”
Although Antero might not have the name recognition of a major U.S. oil and gas company such as ExxonMobil or Chevron, it has established solid credentials and pitched itself as a mature investment. Its headquarters, on Wynkoop Street in downtown Denver, Colorado, is in a hip and bustling part of the city. One of its directors attended Harvard Business School, and Yale University took a stake in Antero in 2015, with investments peaking at $230 million the following year, according to a 2018 article in the Yale Daily News. By the end of 2018, the university’s investment had dropped to $357,000, Yale Daily News reported. Yale did not respond to a DeSmog request for comment.