Aqua-PVR Water has pumped about 225 million gallons since operations began in April 2012, displacing about 45,000 truck loads of water off Lycoming County's roads, said Karl M. Kyriss, Aqua's executive vice president and head of Aqua Capital Ventures.
"That's not a bad accomplishment, when you look at it as environmental custodians of the area," said Kyriss.
But Aqua had anticipated much more demand for water, based upon the frenzy of drilling that took place before gas prices plunged in 2012 and the pace of drilling slowed.
The company says that 575 wells have been drilled within five miles of its water main that have not been fracked because there is insufficient pipeline capacity built to carry the gas to market. Gas producers are sitting on those wells, waiting for the market to catch up.
"We are absolutely dependent upon what our clients are doing for development," said Kyriss.
Despite the slowdown, individual wells are so prolific that Marcellus production keeps going up. The gas field covering much of Pennsylvania and West Virginia now produces close to 16 billion cubic feet a day, nearly a quarter of the nation's natural gas.
The water pipeline this year is expected to report a loss that will reduce Aqua's earnings by about a penny a share. But the company remains bullish. DeBenedictis says the returns become "phenomenal" if drilling picks up.
The venture estimates that hydraulic fracturing near its pipeline will require 2.3 billion gallons of water in the future.
"We expect not a question of will it occur, but when it will occur," said Kyriss.
But the slower pace of drilling has reduced the zeal to build more. Aqua has put plans on hold to build a second water pipeline to serve natural gas interests in Eastern Ohio.
And the company, after getting loads of attention from the national financial media when it was building the pipeline, now strives to keep the project in perspective relative to its much larger $4 billion investment in regulated water utilities.
"Keep in mind it's a very small investment in terms of our overall investment strategy," said Kyriss.
"Our main business continues to be the utility business, and this is just one small part," he said.