Range Resources Corp. has earned recognition for its water-recycling and safety initiatives in the Marcellus shale play.

Range Resources Corp. is credited with kicking off the vast Marcellus shale play in the Appalachian Basin. But it has also been a leader in reducing environmental impacts, establishing best practices, reducing costs, and increasing safety in the young but burgeoning play. And for these innovations, the Fort Worth-based independent takes home Oil and Gas Investor’s Best Corporate Citizen Award.

At the awards presentation at Hart Energy’s Energy Capital Conference in early June, Roger Manny, executive vice president and chief financial officer, said, “When Range Resources discovered the Marcellus shale in late 2004, one of the first things we realized was that the play was not only a game-changer geologically, it was also going to change the way the natural gas business is conducted in the Commonwealth of Pennsylvania.”

Indeed, the fast-moving and widespread development of the Marcellus shale has generated the civic, regulatory and legal conflicts and complexities that accompany any energy development, especially one where previous oil and gas activity has been fairly limited and the population base is significant. Environmental issues continue to be worked out—and water use and disposal is one of the most challenging.

Said Manny, “As the first mover in the Marcellus play, Range had already locked up sufficient water-treatment capacity to carry us for many years; we could have left the water recycling challenge to other companies. Though we have tens of millions of dollars tied up in these water-treatment-capacity contracts, our technical team has worked tirelessly on water recycling to find a way to successfully reuse flowback and produced water, because it is simply the right thing to do.”

In 2008 Range Resources charged its technical team with finding solutions to wastewater disposal. Disposal wells such as those used in the Barnett shale play in Texas, for example, are not yet an option in Pennsylvania.

How could the company decrease the number of truck trips required to take water to public waste-water treatment plants? How could it pare its fresh-water use as well as treated water flowing back into rivers? With Marcellus development at a full gallop, operators were gaining on the point at which the potential amount of total dissolved solids would outstrip allowable levels. The costs and environmental impacts of trucking wa­ter and selling brine from produced water for highway use in winter—traditional practices in the Com­monwealth—and of building impoundments for frac-water disposal, also argued for inventive solutions.

“With Marcellus drilling planned to dramatically increase over the next several years, water use and treatment would have eventually become a concern for the industry,” says Rodney Waller, senior vice president for Range. “Thanks to Range stepping out with its water-recycling effort, and then sharing this process with other Marcellus operators, water-sourcing concerns have been significantly reduced.”

The technical team suggested that brine water flowing back after fracturing could be collected and reused. But many observers, both within the company and in the industry in general, believed the salty water could hamper the completion process.

Range moved to test the recycling concept, using 90% fresh water and 10% flowback water on the first well involving reuse, with no negative results. It then upped the reused water portion to 20%, and by October of 2009 was recycling 100% of its flowback, drilling and produced water in its southwestern Pennsylvania wells. Not only were there no negative impacts on the wells, but production results continued to improve.

“In fact, half of our water-reuse wells are among our 25 top-performing wells we have drilled in the play. In areas under pad development, we are now recycling 100% of our water,” said Manny.

As development proceeds in the northeastern Marcellus acreage, the company will pursue recycling there as well.

Range was also the spark that started the Marcellus Shale Coalition, a forum of companies sharing above-the-best practices and dedicated to working successfully with regulatory and environmental groups. Range shared its water-recycling concept with coalition operators, and from January 2009 to January 2010, the industry went from reusing no water to reusing 60% of water used in operations.

“Each well we drill with recycled water has the potential to keep 1,000 truckloads off of the roads, a good thing for the environment, our neighbors, and our shareholders,” said Manny.

The environmental-impact benefits are many: elimination of 1,000 truck loads and of consumptive water needs amounting to about 25%, or 1 million gallons, per well. Cost savings are some $200,000 per well.

The Department of Environmental Protection of Pennsylvania is encouraging all industry partners and operators to use the recycling method.

Safety First

The Corporate Citizen Award also recognizes Range’s organization and sponsorship of an emergency preparedness event in the Marcellus. “It occurred to us back in 2007 that first responders in many parts of Pennsylvania had little or no experience dealing with the dangers associated with high-volume-flowing gas wells,” said Manny. “The old-school approach may have been to keep a low profile, not alarm anybody, especially the public and the authorities, and concentrate on making sure nothing bad happens.

“While we are still very much concentrated on making sure nothing bad happens, we also have spent the past 36 months meeting with literally every Marcellus region fire marshal in Pennsylvania. Our safety team has conducted training with more than 100 first-responder groups, including those in counties where we hold no acreage. The first responders to a competitor’s well control emergency (in late May) in Clearfield County received training from Range.”

Range and the Lycoming County Oil & Gas Task Force organized the safety exercise, on Bobst Mountain. The large-scale drill took almost a year to plan and involved more than 20 townships and 160 emergency first responders and representatives from county and state agencies, as well as many volunteers. Medical personnel came from as far away as Albert Einstein Hospital in Philadelphia, a trauma care facility.

The event familiarized emergency workers in the relatively undrilled northeast portion of Pennsylvania with oilfield equipment and processes to promote a prompt and effective response. Pennsylvania State Senator Gene Yaw captured the exercise on video, and it is posted at lyco.org under Range Rig Exercise.

Local government officials became more familiar with the drilling process and responders gained hands-on experience in a drillsite environment. A follow-up debriefing in late March brought together the Lycoming County Gas Exploration Task Force, representatives from the Pennsylvania Emergency Management Agency, the Pennsylvania State Fire Commissioner, state police directors, commanders and troop representatives, the Department of Homeland Security, and the FBI.

“This came out of our environmental and safety group,” says Waller. “We wanted to educate the public, the townships, counties, fire departments, hospitals, and others about the unique issues in oil and gas development in the Marcellus. We wanted to assure the local constituents that if there were a blowout, for example, we would bring in our expertise, but for day-to-day issues they would be the first responders.”

The reports, videos and notebooks associated with the training are available nationally. Even such details as assigning drilling locations for 911 calls were covered. “It’s a matter of letting responders know what the situation looks like and feels like, to assure preparedness,” says Waller. “Constituents were shown that they still have power and control—that we would bring in specialty help, but this is the type of equipment and what the situation could look like. It led to dialogue on multiple other issues.”

Manny noted that the water recycling and emergency preparedness were just two of many good citizenship initiatives Range has championed in Pennsylvania.

“These initiatives, led by our own engineers, health and safety professionals and environmental scientists, are a part of our ongoing emphasis on innovation and continuous improvement,” he said.