Environmentalists and even energy executives acknowledge the fact that consuming massive amounts of water in a drought is costly and hurts public perception. Meanwhile, seismologists say evidence continues to mount that there’s a strong link between injection wells and earthquakes.
The argument is getting louder and has culminated in two bills being considered in the Texas Legislature that could mandate recycling, changing how the industry operates. There would be a surge in work for water recovery and treatment firms, a savings of millions gallons of water per well and, perhaps, fewer earthquakes.
But forcing companies to recycle water is costly, and there is opposition to the legislation from the energy industry (See “The case against new regulations,” Page 18).
Devon Energy, which voluntarily recycles its frack water for the environmental benefits, pays up to 50 percent more to do so than if it were to use a traditional injection well for disposal, said spokesman Cindy Allen.
Taking on that added expense could especially burden smaller independent companies that Breitling Oil & Gas CEO Chris Faulkner calls the “heart of the industry.”
Water ‘permanently consumed’
The average Barnett Shale well uses 5 million to 6 million gallons of freshwater, sand and other chemicals to fracture shale and release the natural gas trapped within it. A good percentage of that water comes back to the surface laced with chemicals and brine.
The technology exists to recycle it, but it’s not practical for all companies and all situations. Factors such as water quality, geology and economics all play a role in making recycling feasible, Allen said. In most cases, that water is injected into disposal wells thousands of feet below ground.
For Breitling, the cost to inject 1 million gallons of frack fluid into an injection well costs about $40,000, plus another $6,000 for transportation costs.
On the other hand, the cost to set up a closed loop recycling system would be $500,000, but it could handle millions of gallons from multiple wells on one pad site with no need to transport.
Devon recycled more than 700,000 gallons of water per day during the height of the Barnett Shale drilling.
The Texas Railroad Commission estimates that about 9.1 billion gallons of waste water every month goes into disposal wells. Metzger called the industry’s use of injection wells the “Achilles’ heel in terms of public perception” and said he’s pushing for tougher recycling requirements.
“We think that’s what’s really needed, with this drought, where we’re all being asked to conserve water,” Metzger said. “The oil and gas industry should be asked to do the same.”
A manmade trigger?
Then, there’s the question of earthquakes.
When a magnitude 5.7 earthquake rattled Oklahoma in November 2011, seismologist and University of Oklahoma professor Kate Keranen and others mapped the fault line to discover the source.
The aftershocks were especially revealing, showing the source to be a few hundred meters from a wastewater injection well. Researchers found “compelling” evidence that the water being forced into the ground at high pressure caused the fault line to slip, triggering the earthquake, Keranen said.
Geoffrey Abers, associate director of the Seismology-Geology-Tectonophysics Lamont-Doherty Observatory of Columbia University, said the evidence is mounting that injection wells do induce earthquakes.
“It looks likely that these were related to a waste water injection well that was pumping water into the subsurface in this part of Oklahoma,” he said.
The same discussion is going on in other states where fracking is commonplace and earthquakes have followed, including North Texas.
But scientists aren’t unanimous in their opinions on the subject. A report released this month by Durham University in the United Kingdom found no link between fracking and “felt earthquakes” based on more than 80 years of earthquake history in the United States.
Professor Richard Davies likened it to a person jumping off a ladder onto the floor.
“In almost all cases, the seismic events caused by hydraulic fracturing have been undetectable other than by geoscientists,” Davies said.
The report does list waste disposal as a “manmade trigger” that can cause earthquakes ranging from magnitude 2.1 to 5.7. Other activities, such as mining and geothermal wells, also could induce earthquakes.
Managing the water
Oklahoma City-based Devon Energy started recycling frack water as part of a pilot project in February 2005, according to the Texas Railroad Commission.
Devon (NYSE: DVN) pioneered the process here and now recycles water at other drilling operations from Canada to New Mexico.
“It really led the way to recycling efforts in several areas where we produce oil and natural gas beyond the Barnett Shale,” said Devon spokesman Chip Minty. While Devon still uses disposal wells in some cases, it uses recycling methods where it can because water is a “precious commodity.”
“You need to do something with it. If you’re not going to recycle it, you can’t put it in with freshwater like in a stream or lake,” he said. “It’s not always less expensive to recycle or reuse water, but we see it as a positive because we place a premium on being a good neighbor and being a good environmental steward.”
In the Barnett Shale, Devon takes its water to Fountain Quail Water Management, where it’s filtered so it can be reused on another well. The water comes out either as salt water, which is cheaper but more difficult to transport, or is restored back to freshwater, said Brent Halldorson, chief operating officer of Fountain Quail.
The oil and gas industry is one of the fastest-growing parts of the economy and has a “tremendous” impact on the country’s energy security and independence, Halldorson said. The trick, he said, is to “manage the water correctly.”
Fountain Quail has operations in Wise County, where Devon is going after the more liquid gases in the Barnett Shale. Trucks deliver thewaste water to the recycling center so there’s still the environmental impact of truck traffic associated with the water use.
Stewardship saving money
At Breitling, Faulkner said recycling has benefits beyond just the improved public image.
The company uses a closed loop system that recycles the water on-site and then mixes it with freshwater for the next well. That means no additional transportation costs, less truck traffic and less freshwater purchased, Faulkner said.
“All those things in the long run will save you money,” he said.
He recently spoke on the topic at a conference in Denver, explaining: “We are not required to do this. But we are doing it, though. Environmental stewardship is important to us.”
Breitling just started recycling last year, and Faulkner expects more companies will follow suit because of the drought concerns and earthquakes.
“I don’t think the industry at a huge level is doing it yet. I think they’re starting to embrace it,” Faulkner said.
Last week, the Texas House Energy Resources Committee heard a pair of bills that would essentially require oil and gas companies to recycle frack water and prohibit the use of injection wells.
If approved by the legislature and signed by Gov. Rick Perry, both bills would call on the Texas Railroad Commission, which regulates oil and gas drilling, to adopt the rules by Dec. 1.
The bills aren’t absolute, as House Bill 3537 says water will be treated “to the extent practical,” while House Bill 2992 says water may not be put in a disposal well “unless the fluid is incapable of being treated.”
Commissioners already made recycling more viable in March by adopting new rules that allow companies like Fountain Quail to work with more than one oil and gas operator. Halldorson expected an uptick in business this week when the rules took effect.
The previous regulations made it difficult for recycling companies to work with different oil companies in the same area.
Small, independent energy companies didn’t produce enough wastewater to make it worthwhile for Fountain Quail.
“But if I can go to work for two or three of them, it helps them and it helps us and it really advances recycling,” Halldorson said.