Jun-2021

Treating oilfield wastewater can uncover value: Are you throwing it away?

Large volumes of oilfield wastewater (called brine or produced water) are generated each year in the oil and gas industry.

Trevor Wall
Integrated Sustainability

Article Summary

In Texas alone, more than 357 billion gallons (~8.5 billion barrels) of produced water was generated in 2017.¹ Future produced water projections indicate a sustained period of growth as un-conventional oil and natural gas production rises. The Texas average barrels of water to barrels of oil ratio (WOR) is estimated to be around 7:1.² In a typical year, nationwide, approximately 10 times as much wastewater is created as crude oil itself. Most of this wastewater is reused for drilling and fracking to support enhanced oil recovery or is permanently injected underground for disposal.

Growing wastewater challenges
The amount of energy produced directly correlates to the volume of wastewater that can be managed: recycled and reused, disposed of into salt-water injection wells, and/or discharged. The limitations of injection in some areas are also becoming increasingly evident. Concerns over inducing seismic activity, potential interference of disposal wells with drinking water aquifers leading to water quality degradation, and geological limits for disposal have elevated regulatory pressures and constrained disposal. For example, as of 2019, Pennsylvania has only 13 wells permitted for wastewater disposal due to seismic activity and drinking well interconnectivity concerns. In areas with high produced water to hydrocarbon recovered water to oil ratio, these restrictions can be especially challenging.

Wastewater: an untapped resource
As prolonged drought conditions are becoming more prevalent in many parts of the United States (U.S.), especially in the west – making freshwater, surface water, and groundwater use more restrictive – produced water could help alleviate water shortage concerns. Forty out of fifty State managers expect freshwater shortages to occur in their states in the next ten years³. As a result, large water users (e.g., agriculture, industrial, municipal) who rely on a secure water source are looking to alternative sources for their water needs – including produced water. Currently, less than one percent of produced water is reused outside of the oilfield.⁴

Federal and state policymakers across the U.S. are also placing more emphasis on recycling produced water for beneficial reuse. Most recently, the U.S. Environmental Protection Agency (EPA) announced new actions to support water re-use through the National Water Reuse Action Plan (WRAP).

In California, groundwater typically makes up about 35% of California’s existing water supply during dry seasons. The implementation of the Sustainable Groundwater Management Act (SGMA) in 2014 may restrict groundwater’s future availability in many critically over drafted and high priority basins and subbasins. SGMA’s potential restrictions have forced many water users to explore non-traditional water sources, such as tapping into the stranded produced water market as a long-term, sustainable water supply solution. In parts of the state, such as Kern and Tulare County, which is home to some of the nation’s largest agricultural producers, treated oilfield produced water has been used for irrigation for more than 25 years. Given this precedence and the need to minimise reliance on groundwater sources, Groundwater Sustainability Agencies (GSAs), formed as a result of SGMA, are placing greater emphasis on reclaiming water from oil production facilities to meet their future water demand.

In Texas, the subject of produced water has become a focal point under review by state policymakers. While the disposal of produced water continues to be a viable option, the recycling of wastewater in the oilfield is on the rise, with emerging opportunities to reuse water within and outside the oil and gas industry.

Case studies
The following are a few oilfield produced wastewater beneficial reuse examples across the U.S.:
Wyoming/Montana: In the Powder River Basin, land is irrigated using treated produced water from coalbed methane wells. Some treated water is al-so used to provide drinking water for livestock and wildlife.⁶

California: Low-salinity oilfield produced water is reused for enhanced oil recovery, groundwater recharge, and irrigation. Local agricultural water districts have been using treated wastewater for more than 25 years ago.

Colorado: Treated wastewater is injected into a shallow aquifer as part of an aquifer storage and recover project to maintain groundwater supplies.⁷
Texas: In 2015, a pilot permit was issued in Pecos to irrigate a cotton crop using recycled water from nearby oil and gas activities.⁸

Unlock the Value of Your Produced Water: Put your Wastewater to Use
Do you know how much your produced water is worth? For some irrigated crops, land, water supply, and water infrastructure can make up to 50% of the cost structure of a farm. As an oil and gas producer, by considering alternative options for your wastewater, including fracking and/or beneficial reuse, you may have the ability to:

Achieve operational efficiency
· Gain an understanding of the potential market value of your produced water
· Realise operational efficiencies and OPEX reductions by alleviating your produced water burden through wastewater management optimisation

Mitigate your financial and regulatory risk
· Have symmetrical information on potential beneficial use to allow you to negotiate strong offtake agreements or vertically integrate with the ag industry through partnership agreements
· Generate a new source of revenue, further diversifying your asset portfolio
· Turn a waste product and a liability (salt-water disposal well and unlined sumps) into an asset
· Mitigate regulatory risk and escalating pressures to minimise reliance on injection wells for disposal
· Maximise the value of your land, including incorporating renewable energy, such as solar

Manage your Environmental, Social, and Governance (ESG) Risk
· Build significant social license both locally and internationally
· Make a positive environmental impact by minimising your reliance on freshwater

Your wastewater may have tremendous value – let us help you unlock it! Our asset-specific proprietary water reuse analysis (frac or beneficial re-use) is available for $12,000 (typically a $50,000 value) for a limited time.