Monaca [Biodiesel] Plant Shifting to Marcellus Shale Frac Water
Treatment
Pittsburgh Business Times
3 June 2011
By Anya Litvak
Plant manager Ed Vescovi said the Monaca facility still needs some
equipment for frac water treatment, but believes the plant is
well-suited for the change.
Former Gov. Ed Rendell and President Obama blessed Pat Copple’s
biodiesel plant in Monaca, but Copple wishes he’d never gotten into the
game.
“The biodiesel business was never good,” he said. “And it just kept
getting worse.”
So as the plant huffed out its last load in May, Copple is getting
ready to try his hand at treating frac water from the Marcellus Shale.
His $13 million chemical plant needs about $1 million in modifications
to transform into a wastewater treatment operation, which he expects
will happen by July 15.
“Frac water is an up-and-coming issue and an environmental issue,” said
plant manager Ed Vescovi.
Vescovi said the facility needs a few pieces of equipment to separate
solids and metals from the water, but is well-suited for the task, with
an existing 800,000 gallons of storage capacity and a loading and
unloading facility.
Using water treatment technology licensed from Kroff Well Services on
the North Shore, the Monaca plant will be able to get the fluid clean
enough for operators to use it again in fracing operations. Eventually,
Copple said, he’ll offer a disposal-grade treatment option.
Copple is president of PF Technologies Inc., the New Castle-based
parent company for Pennsylvania Biodiesel, and several other material
recycling operations. Since he opened the Monaca plant in 2007, Copple
has grown disillusioned with biofuels.
“The only people who are making money in the biodiesel business are the
traders,” he said.
Where gasoline producers can pass along raw material price spikes to
their clients, biodiesel makers can’t do it to the same extent because
the market is saturated with competition, Copple said.
There is more than 2 billion gallons of installed biodiesel capacity in
the U.S., but plants are expected to produce only 800 million gallons
to satisfy demand (still more than twice what was produced a year ago).
According to Alan Weber, an adviser to the National Biodiesel Board,
while bigger plants tend to do better in times of materials cost
volatility, the biodiesel plants best equipped to survive these swings
are located closest to their feedstock supply, to eliminate freight
costs.
“When we first started, biodiesel feedstock was 18 cents per pound,”
Copple said. “It’s quadrupled since then. But the gross margins stayed
the same. It’s just hard to get a fair return on your investment.”
Last year, the biodiesel market was shaken by the expiration of the $1
per gallon tax credit, which was eventually extended through the end of
2011 but not before plunging a slew of suppliers from operation.
Even with the tax credit, material costs have put profitability in
question.
“Recycled cooking oil (known as yellow grease in the industry) is
selling for about four times what it was five years ago,” said Ben
Evans, a spokesman for the National Biodiesel Board. “Soybean oil,
which makes up about half of the U.S. biodiesel industry’s feedstock,
is selling for about 60 cents a pound, and five years ago it was about
25 cents.”
But he cautioned there are 170 biodiesel plants in the U.S. that are
making enough of a profit to stay open, and predicted that this new
market will only improve.
The Energy Information Administration projects biofuels will comprise
the bulk of a 1.3 billion barrel per day increase in liquid fuels
consumption in the transportation sector over the next 25 years.
“Everyone had a terrible last year,” Evans said. “But production is
back.”
According to Copple, though, the future, and the money, is in
wastewater. Marcellus operators produced more than 293 million gallons
of wastewater during the last six months of last year, the latest data
available from the Department of Environmental Protection.
Anya Litvak covers energy, transportation, utilities, gaming and
accounting for the Pittsburgh Business Times.
Contact her at alitvak@bizjournals.com or (412) 208-3824.