A Flow of Solutions: The Observer Reporter Energy Report visits comtech industries, inc.

Reprinted with permission from the Observer Reporter Energy Report

By Michael Bradwell

With the average natural gas well requiring around 5 million gallons of water for hydraulic fracturing, treatment of the liquid is a voluminous issue for drilling companies.

And as Dean Grose has found, there are numerous solutions – depending upon the individual producer and the geographic area it is working in –  that can be reused in the fracking process.

Grose, who is president of Canonsburg-based Comtech Industries, Inc., also like to help find companies ways to save money through the solutions he and the staff at Comtech create.

Grose, who began working in the industry in 2005, created a system for treating flowback water from the fracking process, separating chemicals, then placing the treated water in large impoundment areas or collection tanks. The treated water is picked up by water trucks and
returned to the next well pad that is being drilled.

As the drilling industry evolved here, Comtech changed along with it, finding new solutions for both production and environmental challenges.

Grose’s creative approach to finding solutions caught the attention of business consultancy Ernst & Young, which in June named him a 2014 Entrepreneur of the Year for Western Pennsylvania and West Virginia. The honor positions him, as well as several others from the region, too compete for E&Y’s national Entrepreneur award, which will be presented in November. 

A conversation with Grose is filled with progress reports on a number of approaches Comtech is taking toward achieving what he refers to as the “Well Pad of the Future.’

One of the innovations, which has already gained traction among oil and gas exploration and production companies, came about as a result of Comtech’s work with Chevron.

“Chevron approached us and said they needed a mobile, 1-million-gallon water tank,” for its fracking operations, Grose said. Comtech designed  a tank that meets the code of the American Water Works Association, which specifies the type of steel, welds, and thickness required for construction.

Designing and building the tank to code, Grose explained, ensures that it won’t leak, something that can’t be guaranteed by water impoundment ponds or water ‘corrals,’ which he said have been known to collapse. Drillers also use 20,000-gallon fracking tanks resembling railroad coal gondolas that store treated frack water, but the limited volume per car requires multiple units up to 150, making them difficult to manage, he said.

According to Grose, Comtech has successfully deployed 30 of its storage tanks, which are typically placed three units to a drill site. He said by the first of the year, Comtech will deliver 60 units to Chevron’s drilling operations in Texas.

When drilling at a site is completed, the units are disassembled and reassembled at the next drill site.

The portable tanks are the product that Grose believes will eventually replace impoundment ponds at fracking sites, and with interest in them growing-Cabot Oil & Gas Corp. is another Comtech customer-Grose had to devise a way to ramp up production.

The breakthrough came when he figured out a way to manufacture the tank panels in a much more efficient way.

When he first began marketing them, he said Comtech was able to produce an average 2.5 tanks a month. Each requires 24 panels to create the 40 foot high, 10 foot long structures.

“It was taking nine hours to make one panel,” Grose said. “We figured out a way to make (the panel) in nine minutes, and now we’re making 2,600 tanks a year.”

But Grose hasn’t stopped with the creation of a leak-proof water treatment tank. He said other projects at Comtech are geared toward developing what he calls “the well pad of the future.”

“We are going to change the way companies frack. We look for novel ways to stay ahead of the competition,” he said, adding that Comtech also closely watches regulatory developments related to the industry to anticipate ways to help customers successfully meet those challenges.

While safe and efficient storage tanks are becoming a flagship product, Grose said it is Comtech’s monitoring and control of the fluid that is the centerpiece of the arrangement.

“We sell the ability to control fluid movement on the site,” he said,  explaining that while the frack water is cleaned and totally contained, “we control the filling of the tanks, the fracking, the flowback, treatment and discharge.” 

One part of that process that Grose is exploring involves the bulk loading of fracking materials that he said can save drilling companies significant money.

He’s also working on a plan to introduce environmentally-friendly safe above-ground disposal wells in areas where use of underground disposal wells have caused concerns about earthquakes.

Grose, 49, is a chemical engineer who founded Comtech in 1995 as a company that sold chemicals for water treatment to a variety of industries. With the advent of the natural gas being produced from unconventional wells that require huge volumes of water for the fracking process, Comtech quickly became a key supplier and service provider for exploration and production companies in the Marcellus and Utica shale plays.

Being in the middle of the oil and gas boom has brought rapid growth to Comtech. Three years ago, the company had 62 employees; it now has 137. “We just hired five more people two weeks ago,” Grose said, noting that the company depends upon engineers and project managers to keep up with the growing number of projects.

“We’ll probably hire another 40 to 50 next year,” he said, noting that Comtech, which did $50 million in sales last year, has already maxed out its two-story headquarters building it moved into two years ago in Ashwood Commons in North Strabane Township, and is considering taking a  second building in the development. It also has warehouse space in Canonsburg’s Fort Pitt Industrial Park and is having additional facilities constructed nearby.

The experience of working with drillers to find water management solutions in a rapidly expanding production environment has revealed a fundamental truth, Grose said.

“The only thing that’s constant about the oil and gas industry is change,” he said.



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