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Owen Goertz drives past a disposal well for water from nearby oil rigs, which could instead have its water cleaned and used to irrigate the nearby field, Friday, Dec. 13, 2019, near Hillsdale. The reclaimed water irrigation would allow Goertz to potentially double some of his hay production, compared to the dryland production he has now. Nadav Soroker/Wyoming Tribune Eagle

CHEYENNE – A couple years ago, Owen Goertz, a longtime cattle rancher living northeast of Cheyenne, was approached by Marvin Nash, who had a proposal: What if byproduct water from oil and gas drilling operations could be treated to use in agriculture?

Goertz was intrigued by the idea and the potential boon it could bring to his roughly 10,000 acres of land, where he has 300 cows and some wheat crops. Yet he worried the project might not be feasible.

“The costs of doing it were always prohibitive,” Goertz said. “It takes some money to process this water into usable water, and not all of it’s going to be usable.”

But Nash, well-known for his years spent as a rodeo clown and anti-bullying advocate, was adamant his idea would work. After serving as a consultant for EOG Resources, one of the largest oil and gas firms in Wyoming, he began to see the agricultural potential hiding underground.

“I thought, ‘Man, why are we wasting all this water?’” Nash said. “Why can’t we repurpose it?”

After putting out some feelers, Nash and his wife founded Encore Green Environmental, a local agricultural company, which partnered with the national Beneficial Use Water Alliance. He then developed a patent-pending technology called Conservation By-Design, which provides the method to batch, clean and reapply the produced water.

With Goertz’s land serving as a test, representatives of Encore Green hope the technology will be a boon for the state while encouraging the growth of blockchain, a budding industry in Wyoming. Yet the project has generated skepticism among environmental experts, who are concerned about the consistency of the water post-treatment.

Getting their ducks in a row

The state Department of Environmental Quality is expected to decide whether to grant a permit for Encore Green’s initial project by Christmas Day. If granted, the first permit would be for farmland near Pine Bluffs. The second permit, which Nash hopes will gain approval soon after, would be for Goertz’s land northeast of Cheyenne.

There have normally been two ways to store produced water – sending it back into the ground through a disposal well or letting it dry up in an evaporating pond.

Goertz, who allows Kaiser-Francis Oil Company to drill on his land, has three disposal wells on his property. Once the Encore Green technology is in place on his land, Goertz plans to use some of that water for an irrigation system to enhance the grass and soil on his property.

“It’ll basically turn that dryland grass from a ton an acre to two tons an acre, depending on how much we can get irrigated,” Goertz said. “It’s going to have to be fairly small to start with, until we figure out just how much water we can get.”

In October 2018, Encore Green and the Beneficial Use Water Alliance held a successful trial on Goertz’s property, applying the treated water to his grass. The test run also allowed Encore Green to get something Nash said was key: definitive parameters from the DEQ on the water’s composition.

“Nobody could ever get the DEQ to give us the parameters of what the water needed to look like,” Nash said. “So that pilot led us to a year and some odd months pathway just to get parameters from the DEQ.”

Goertz said the pilot program went smoothly.

“We proved it can be done,” he said. “Now, it’s just a matter of getting all the ducks in a row.”

A new use for blockchain?

Another aspect of the Encore Green project is its use of blockchain technology, which has been promoted by laws passed in recent Wyoming legislative sessions.

Blockchain has often been praised as a technology to attract cryptocurrency companies to Wyoming, yet Nash and Jeff Holder, the general manager of Encore Green Environmental, argue there hasn’t been enough discussion of its other uses.

As part of the water repurposing process, a third-party company would come in to test the water and determine the necessary parameters to treat it. That’s where blockchain would come in, acting as a secure digital storage spot for the data.

“When we hire a third-party independent lab to test this water, they upload the results directly to the blockchain interface, which means we can’t then mess with it,” Holder said. “We can see it, but we can’t alter it.”

Rep. Tyler Lindholm, R-Sundance, one of the biggest promoters of blockchain in Wyoming, said he wasn’t aware of the project’s plans to incorporate blockchain until the WyoHackathon in September.

“Once you understand blockchain technology, it just makes incredible sense in regards to utilizing blockchain in ag,” Lindholm said.

With the slew of blockchain bills passed in recent years, Lindholm said about seven to eight legitimate blockchain companies have been coming to Wyoming every month.

“They’re all in 100 different directions, and ag just makes a hell of a lot of good sense for us ag folks,” he added.

Whether the project works on a larger scale remains to be seen, but Lindholm was excited by the project’s possibilities.

“It has yet to shake out, but to me, it seems like a pretty smart move,” Lindholm said. “If it works, it could be one of the smartest moves done in the state of Wyoming in a long time.”

Environmental concerns

Though the DEQ has provided parameters for the water consistency after treatment, environmental experts have approached Encore Green’s project with skepticism, especially regarding the process through which the water will be treated.

Sue Spencer, a retired hydrogeologist who has worked on numerous water supply projects in Wyoming and Utah, was among a group that met with Nash and others from Encore Green to express their concerns.

“My main question was and still is, how is the water going to be treated?” Spencer asked. “It sounds like it’s kind of a big deal about this process, but the main part of the process is the treatment of the water, and if you don’t have the technology to treat it to whatever levels you’re trying to reach, the whole thing is just a pipe dream.”

Spencer said the idea is a good one, though she wondered how many companies offer the water treatment services that are necessary. In drilling operations, the water with the highest level of contamination, known as flowback water, comes when initial hydrofracking takes place, Spencer said.

“As the well starts producing gas or oil, there’s other water that’s produced from the formation that can contain some of that flowback water that didn’t make it out initially and is just usually really briny water from the formation itself,” Spencer said.

While common chemicals are often present in the byproduct water, other contaminants that normally aren’t analyzed can often be present, Spencer said.

“How are you going to test for all these chemicals, some of them unknown, and ensure that’s not being applied to the ground?” Spencer asked.

Nash said the company plans to use two processes – thermal heating and reverse osmosis – to treat the water. The University of Wyoming’s Center of Excellence in Produced Water Management also recently received a $1.5 million grant from the U.S. Department of Energy to develop a process to treat the more challenging chemicals found in produced water.

Monika Leininger, an organizer for the Powder River Basin Resource Council, noted Wyoming experimented with produced water during the coal-bed methane boom that peaked in the early to mid-2000s.

“There was an attempt to use treated water from that, which resulted in a lot of ruined streams and rows and land, so I know that’s where my organization has been a little bit hesitant about this,” Leininger said.

She said she appreciates Encore Green’s transparency efforts, but her organization is still in wait-and-see mode.

“Until there’s an approved permit from the DEQ and we can see long-term monitoring, I think we’re going to continue to be skeptical about it,” Leininger said.

But Nash remains adamant there are safeguards for every step of the process.

“Are there norms in the water that we have to look for? You bet. Are there benzines in the water that might need to be reviewed? You bet there are,” Nash said. “But we have a pre-test, a treat and a post-test. And if the post-test does not meet the parameters from the DEQ, the water doesn’t go on the ground. It’s that simple.”

Looking ahead

If the DEQ grants the first permit for the project in Pine Bluffs, Encore Green could move quickly to expand its operation to other farmlands across Wyoming. For now, the company will need a site-specific permit from the DEQ for each operation, though that could change in the future.

“Once they see that we’re meeting the parameters, then there’s a possibility that we could get a blanket permit,” Nash said.

During the Wyoming Stock Growers Association’s Winter Roundup Convention in Casper last week, two representatives from Encore Green made presentations to subgroups of the association.

“I’ve certainly had some strong expressions of interest back to me since those conversations took place,” said Jim Magagna, executive vice president of the Wyoming Stock Growers Association.

Magagna said ranchers were impressed by the company tailoring its treatment process to the specific soil and water quality of the area.

“We all know that our soils differ widely, even in local areas, and what they can benefit from is going to differ based on that,” Magagna said.

Echoing a point made by Nash, Magagna also noted the project could allow farmers to capture carbon through their enriched soil and, in turn, sell carbon credits.

“As those plants grow and spread out, the roots also grow stronger and deeper, and that results in more carbon sequestration,” Magagna said. “We’ve started to now look at (carbon credits) as a potential secondary source of revenue for our operation.”

Nash argued Wyoming’s abundance of arid land, combined with enriched soil and grass as a result of the water application, creates a perfect environment to capture carbon.

“We’re not reinventing the wheel, but it’s better than forests and those kinds of things. Because that grass is so close to the ground, it draws the carbon out quicker,” Nash said. “The problem is we don’t have any water. Since we haven’t had access to water, we couldn’t improve that soil health.”

If the DEQ allows the project to move forward on his land, Goertz said he will begin applying the treated water this spring.

“It won’t be just for us,” Goertz said. “This thing, by all rights, should take off and go across the country.”

Tom Coulter is the Wyoming Tribune Eagle’s state government reporter. He can be reached at tcoulter@wyomingnews.com or 307-633-3124. Follow him on Twitter at @tomcoulter_.

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