What the Texas Railroad Commission’s New Ruling Means for the Future of Frac Water Management

Where the prospect of recycling frac water in Texas was previously barred by regulations that require an on-site water treatment permit, a new ruling by the Texas Railroad Commission removes the regulatory hurdle – bringing big promise to the future of frac water recycling in the region.

A report from the Dallas Morning News cites Barry Smitherman, Chairman of the Texas Railroad Commission:

Oil and gas companies will have an easier time recycling fracking wastewater after changes to the state permitting rules passed Tuesday…By removing regulatory hurdles, these new amendments will help foster the recycling efforts by oil and gas operators who continue to examine ways to reduce freshwater use.

 

The Regulatory Hurdles are Cleared, Now What?

Now that permitting is no longer an issue, the only obstacle that stands in the way for widespread adoption of water reuse procedures is economic viability. This is where an overall water management plan begins to make sense.

An average well requires around 80,000 barrels (bbl) of water to frac. Fresh water in the Barnett Shale region costs about $0.45/bbl. Hauling that water from the source to the well pad averages $1.60/bbl. Some quick math and we get $164,000 per well for purchasing and hauling fresh water for one well.

Of the 80,000bbl of water pumped down the well to induce formation fractures, roughly 20,000bbl flows back within the first week. Disposal costs for this water runs about $0.90/bbl; add water hauling to the off-site disposal well at $1.60/bbl and we’re looking at $2.50/bbl. Again, some simple arithmetic and we get a cost of $50,000 to dispose of the frac water for one well.

Water management cost per well: $164,000 (fresh water + hauling) + $50,000 (hauling+disposal) = $214,000

 

Frac Site Water Use
It takes 80,000 barrels (3.5 million gallons) of water to frac one well. Texas has hundreds of new wells planned for the next 12 months.

 

Water Management with Recycling

Treating frac water varies by the type of technologies applied and the level of cleanliness to which the water is treated. Drillers require different levels of treatment, but  a recent study by Halliburton and XTO Energy shows that the only contaminants that must be removed for frac water reuse are the Total Suspended Solids (TSS).

In the same Barnett Shale, competitive technologies can recycle wastewater for around $1.50/bbl. Technologies that treat water at or near the well pad essentially eliminate hauling costs, but for the sake of arguement we’ll say that water hauling is cut by one-half. 80,000bbl of treated water at $1.50/bbl + $0.80 (hauling cost) = $2.30/bbl x 80,000bbl = $184,000 for recycled water.

Disposal costs for the 20,000bbl of flowback is eliminated, but hauling to the water treatment facility may still be required. 20,000bbl x $0.80 = $16,000 for hauling.

Water management with recycling, cost per well: $184,000 (reclaimed water + hauling) + $16,000 (hauling) = $200,000

The two strategies for frac water management essentially boil down to the same numbers, with a possible edge on the recycling side. So for companies that have laid out a blanket statement saying that fresh water use and disposal is more economically feasible than any reuse plan, the topic is really worth revisiting.

 

Other Benefits of Frac Water Reuse

An issue that doesn’t get as much attention as it deserves in the water reuse conversation is the longevity and productivity of a well. Fresh water use in formations with any measure of clay should raise a big red flag. Smectite clays swell in the presence of fresh water; when drillers use fresh water to open micro-fissures in the rock formation, there is reason to be concerned that clay swelling will stop the flow of oil or gas resources.

On the other side, recycled frac water contains high levels of Total Dissolved Solids (TDS), or salts. Salty water does not cause any clay swelling, so the hairline fissures induced by the fracking process will remain open and unimpeded by formation swelling. More research is being conducted on this topic but some reports estimate that the productivity of a well could experience a 4-40% reduction due to clay swelling. For a well that can produce $10 million of resources in its first year of production, a 4-40% reduction in productivity means $400,000 – $4,000,000 in lost revenues. Over a well’s 30-year lifespan, imagine the millions of dollars of lost resources! Is using fresh water worth the risk?

Another key benefit of frac water reuse is a much needed coming to terms with the concerns of worried citizens. Yes, fracking only accounts for <1% of state water use in Texas, but with drought conditions as they are, the perceived water consumption levels still leave rural residents, living off of ground water, with a bad taste in their mouth. Shifting from fresh water to recycled water shows a genuine concern for the water resources that preserve our agriculture and municipalities. This benefit extends beyond the borders of Texas into other drilling regions around the country, as well.

Ultimately, any federal regulations on fracking will weigh the voices of industry AND the people. Proceeding forward with closed ears to the voice of the community will only result in industry resentment and growth-stifling regulation.

 

The Time is Now

With the easing of water recycling regulations, the time is now for companies in Texas’ oil and gas sector to heavily consider a shift from how things are currently done, to how things ought to be done. With treatment technologies able to provide water that makes a viable frac fluid at or near the same cost as fresh water sourcing, hauling, and disposal there’s no longer an excuse for downplaying the viability of recycling and reuse.

We suggest taking a hard look at our technology for recycling frac water. It’s generated reusable frac water in Texas, Oklahoma, Louisianna, Pennsylvania, North Dakota, Colorado, California, and Washington. And it’s cost competitive with a fresh water management platform.

Categories: Fracking

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