In his part of the expanding supply chain serving the oil and gas industry, Dean Grose considers time his “most valuable commodity.”
“I protect it with a passion,” he said recently in the North Strabane offices of Comtech Industries Inc., the water management company he founded in 1995.
For him that means flying his own jet so he can travel to Colorado and back in one day. For the gas exploration and production companies with which Comtech works, it means finding ways to deliver, treat and remove the water essential to hydraulic fracturing in a fraction of the time it once took, and less expensively.
For the future of Comtech, it means Grose, 49, of Eighty Four and his team are developing what they consider the well pad of the future.
“The speed with which you operate can set you apart,” he said, noting that permits for some of the wastewater treatment facilities he’s building take up to 16 months to secure. “We have to try to stay at the forefront.”
Doing so in an industry that is growing exponentially since drillers first tapped the Marcellus shale just a decade ago required Comtech to find a niche, Grose said. Getting into that niche has allowed the privately held company to increase its payroll to 137 employees, up from 28 workers five years ago, he said. He predicted revenue this year of $83 million, but did not provide previous years’ figures.
After more than 10 years of selling and maintaining water treatment systems for a mix of steel companies, paper producers and utilities, Comtech focused directly on the oil and gas industry that bloomed around it in Washington County and beyond. The company concentrates on temporarily storing, monitoring and recycling on-site the huge amounts of water drillers require.
“That’s a very competitive space to be working in right now,” said David Yoxtheimer, an associate at Penn State University’s Marcellus Center for Outreach and Research. He said the shale industry is increasingly looking for cost-effective ways to manage water, which can represent 10 to 20 percent of the cost of drilling and fracking a multimillion-dollar well.
Grose said he saved a client $8.6 million a year by cutting the time it takes to unload a water truck from 22 minutes to less than five with automated equipment.
A South Park native and University of Pittsburgh graduate, he is directing Comtech’s efforts toward meeting all of the industry’s water needs at the well site.
“Anything that touches water, we want to be involved in,” he said.
Comtech began working with Houston-based Cabot Oil & Gas Corp. six years ago to treat its wastewater for reuse in drilling and fracking. The focus is treating the water on-site or at mobile spots close to several well pads to reduce trucking of water.
“The No. 1 cost in water treatment is transportation,” Grose said.
In the field, Comtech works with companies to arrange water services in a hub-and-spoke model, with water resources at the center, close to as many well pads as possible. Comtech is looking to recycle wastewater coming out of the wells for reuse in new wells, with as few truck trips in between. Comtech tests water and waste coming off a drill site for radioactivity.
With gas giant Chevron, Comtech is deploying huge, mobile water tanks to temporarily store fluids on a well pad, or close to several well pads. The goal is to get a tank erected in two days, and be able to take it out with little evidence left behind.
The mobile tanks cost clients about $600 a day, Grose said. Building a traditional earthen dam in Pennsylvania costs about $1 million, he said.
“Storing the water is a huge aspect here. To build a conventional earthen impoundment requires more land disturbance,” Yoxtheimer said. “If you can come in with modular storage … you’re really having less of a footprint on the environment.”
Officials at Cabot and Chevron could not be reached.
Combining those features with other innovations establishes what Comtech calls the well pad of the future. It’s smaller, with water management equipment and vertical holding tanks for multiple wells gathered in central spots.
“It’s a one-stop shop,” said Grose, whose success at Comtech earned him accolades in June when Ernst & Young named him its entrepreneur of the year in the energy division.
As a close watcher of the clock, he knows the drilling boom won’t last forever, and at some point, fewer new wells will mean less need for recycled water. Drillers will need to get rid of wastewater again. So Grose is looking to buy disposal wells.
“That market will flourish,” he said.