The dark cloud over the oil and gas industry does not seem to be clearing away. Add the global economic problem associated with the Coronavirus and, well, it’s easy to say the picture seems quite bleak. We have Democratic Presidential candidates calling for bans on oil, misguided public sentiment against oil growing, and even investment dollars avoiding our industry. Oil is being called the “New Tobacco,” but the industry is responding.
Many publicly traded oil majors are making public statements of carbon neutrality by 2050, while others, like Equinor, are stating by 2030. Even service companies like Baker Hughes are pursuing the carbon neutrality goal. Others, like Shell, are focusing on emission reductions. As I shared in an earlier column, the rally cry for our industry this year will be about environmental sustainability and governance (ESG). ESG focus is the only way to get the investment dollars back into our industry.
Recycling is the path forward. The good news is that much of what we are talking about has solutions that sit right in the oilfield water management sector. I was invited recently to an exploratory meeting for a new consortium, and as I sat in on their exploratory meeting, I was surrounded by regulators, researchers, operators and other stakeholders in the oilfield water management industry. As expected, improved sustainability, by increasing the recycling of produced water, was a hot topic. Topics ranged from landowner restrictions posing obstacles to recycling, to policy and regulatory framework.
There was a consistent response from operators, regulators and stakeholders that we must recycle more. And, as many major operators will tell you, they are using recycled produced water for a large percentage of their frac demand water. The problem is that as a group, unconventional operators are using recycled water at numbers less than 20% of their frac water demand, but this number is growing. And this is where the problem lies, with use growing but it should be much better.
ESG and oilfield water. I’ve said this before, but ESG is not just about reducing emissions, but also being more sustainable, conserving natural resources like water. And produced water recycling preserves fresh and brackish water. Why include brackish? Well brackish water in some drought-stricken areas is the best or only source available, and it should be preserved for this reason. We can’t say that we are being more sustainable by switching to brackish, when we generated over double the produced water that we need for frac demand. We wonder why our industry is being attacked, and we all know that there are operators today that aren’t recycling, or are recycling at very low percentages. But at the same time, they are producing more produced water then they can use.
I know there are logistical obstacles, and you may be producing water in a different area than where you are drilling, or you are facing landowner restrictions forcing you to buy fresh water. As unpopular as I may be for saying this, it’s time we adopt what New Mexico did in the “Produced Water Act,” allowing operators to void freshwater agreements, if they want to recycle. We either take our role seriously as being more sustainable, or we don’t. But, remember the world is watching, and investors are already turning their backs.
The National Water Reuse Action Plan (WRAP). On Feb. 27, 2020, the EPA announced and published its new WRAP. This is a reaction to what is seen as a crisis in the U.S. but also worldwide. Capetown, South Africa, for example, had projected a Day Zero, the day they run out of water. Through redirecting water from agricultural uses and strict conservation measures, this day was averted, but it still looms on the horizon.
We have communities here, in the U.S., that face these same issues, including some in drought-stricken areas of Texas. The WRAP is intended to reduce the strain on freshwater sources by reusing wastewater. The first pipe-to-pipe facility to do this in the U.S. will be in San Antonio. In the U.S, about 6% of wastewater is recycled, while Israel recycles close to 90%. That’s part of the reason our EPA is collaborating with Israel on this topic.
You see, our federal government is investing dollars on recycling wastewater and has made it a national priority. Yet, as an industry, we have the easiest path toward eliminating fresh and brackish water, and we aren’t taking it. As a group, stating that we will eliminate freshwater use by 2025 is not a huge sacrifice. In fact, in most cases, it saves money. This is our path forward, if we want the investment community and public at large to take our claims seriously.
Social License to Operate (SLO). There is this concept of Social License to Operate (SLO), which has to do with an acceptance of a company’s policies and procedures by its employees, investors and the public-at-large. Some believe we have lost our SLO, which is indicative of the investment dollars leaving our industry. It’s time we take our SLO back by taking specific and aggressive actions to eliminate freshwater consumption. I know some companies are taking these actions, but, unfortunately, as a group, we fall woefully short.
It’s time we look at legislation like the “Produced Water Act” and remove the obstacles associated with landowner restrictions. Logistical issues can be resolved easily. I know an operator today that takes a neighboring operator’s produced water into its programs to go freshwater-free, I also know operators, moving into new areas, that have made arrangements with water midstreams, or other operators, to take their produced water instead of fresh. Most avid recyclers will tell you that produced water makes a better completion fluid.
It’s a WRAP. It’s time we take a stand and become “freshwater free.” WRAP is showing us that recycling wastewater is becoming a national priority, and it’s time we make it one in our industry.
- Digital transformation: Accelerating productivity, sustainability in oil and gas (November 2023)
- Technological advances increase efficiencies and flexibility (November 2023)
- Volatile organic carbon emissions in oil and gas industry: Impact and mitigation (November 2023)
- Technological innovation delivers transformative product suite to upstream sector (November 2023)
- Offshore potable water production from subsea karstic aquifers (November 2023)
- Singlet oxygen-generating treatment technology achieves sustainable operations, helps operators meet production goals (November 2023)
- Applying ultra-deep LWD resistivity technology successfully in a SAGD operation (May 2019)
- Adoption of wireless intelligent completions advances (May 2019)
- Majors double down as takeaway crunch eases (April 2019)
- What’s new in well logging and formation evaluation (April 2019)
- Qualification of a 20,000-psi subsea BOP: A collaborative approach (February 2019)
- ConocoPhillips’ Greg Leveille sees rapid trajectory of technical advancement continuing (February 2019)