Petro Waste Environmental transition between basins

Petro Waste Environmental LP was fortunate that when the company launched in 2012 with the goal of providing nonhazardous waste services to shale oil producers in the Eagle Ford, it also had an eye on the Permian Basin's potential.
By Patrick C. Miller | July 14, 2017

Petro Waste Environmental LP was fortunate that when the company launched in 2012 with the goal of providing nonhazardous waste services to shale oil producers in the Eagle Ford, it also had an eye on the Permian basin’s potential.

Based in San Antonio, Texas, the company was started by George Wommack who now serves as PWE’s CEO. The company’s short history provides a good example of how quickly things can change in the oil and gas industry and how being nimble is the key to surviving.
“The reason I felt this was a good opportunity was that I’d been active in the saltwater disposal space in the Eagle Ford shale in south Texas and found that many of our customers were contacting us in search of locations to dispose of their mud and cuttings,” Wommack says. “At that time, there was no infrastructure capable of handling those types of waste streams. We identified the need coming from some of the large E&P companies developing the Eagle Ford.”

According to Wommack, the Eagle Ford was being overwhelmed with the waste streams produced from horizontal drilling and hydraulic fracturing.

“There were huge lines and trucks had to drive long distances to get to the few facilities that were able to take that material,” he recalls. “It was an enormous bottleneck in the petroleum production process.”

To serve the Eagle Ford, PWE built two landfills in McMullen and DeWitt counties, a saltwater disposal facility at Carizzo Springs and a satellite facility at Cuero. The company planned to use the south Texas facilities to become well-established in the market and develop customer relationships.

“That was the original plan, but what happened when we went into the downturn was that the rig count in the Eagle Ford virtually went to nothing,” Wommack says. “The market just dried up—almost overnight.

Fortunately, the company had also recognized the Permian’s potential and was ready with Plan B.

“We made the decision at that point to mothball those processing facilities and shift our focus to the Permian Basin where the fundamentals were better,” Wommack explains. “We knew at the time that when the market came back, it was going to come back in the Permian before the Eagle Ford because the breakevens in the Permian just kept getting lower. The returns looked better and better as more and more development occurred.”

PWE had earlier begun the process of exploring locations in the Permian where facilities could be permitted to accommodate the solid waste from horizontal drilling and the production completion process. Because it had permits for two facilities, the company shifted its construction and development plans to two sites in the Permian.

In April, PWE opened its first facility in the Permian, the 217-acre Orla Landfill in Reeves County. As with the company’s other sites, the Orla Landfill accepts oil- and water-based mud, oil- and water-based drill cuttings, contaminated soil and RCRA exempt non-hazardous E&P waste. It also provides washouts and other ancillary services.

Work is also underway on a second facility in Howard County, in the northern Midland basin just outside the town of Midland. That facility is expected to open in August. Wommack says the change in plans has worked out well for PWE. 

“The economics in the Permian have continued to get better,” he notes. “There’s a lot of efficiencies still left to capture in the drilling and production process on the drilling side as they increase laterals further and services continue to get more efficient.”
PWE’s goal is to have facilities within 30 miles of all drilling activities in the Permian Basin.

“There’s nothing more important than being in the right place. If you’re not close enough to the drilling activity, you’re going to be priced out of the market and you’ll never be a major player in our industry,” Wommack says.

As a company that places great emphasis on community relations, safety and protecting the environment, Wommack stresses that PWE wouldn’t be successful if it didn’t have the right people to operate its facilities. The past two years, the company has been named one of the best places to work by the San Antonio Business Journal.

“We want to make sure that everybody enjoys working for our company,” Wommack explains. “That’s key to us. It flows through the activities and services that our employees provide. If it’s a better work environment, people are more productive. It’s just the right way to live life.”

Author: Patrick C. Miller
Staff Writer, North American Shale magazine
701-738-4954
pmiller@bbiinternational.com