What's new in production

“Water, water, everywhere, / Nor any drop to drink.” —Samuel Taylor Coleridge, The Rime of the Ancient Mariner.

“Water is the new oil.” Over the last decade or so, you’ve probably heard this glib assertion more than once. It’s an imperfect metaphor. “Oil gets used up, but water is inherently reusable. We burn oil to make our cars go, or we make it into plastics, which will never change back into oil. Water, on the other hand, spends just a few hours in our bodies before we return it, unchanged on a molecular level, back to the environment.” So says Haggai Scolnicov, CTO of TaKaDu, provider of software-as-a-service for water distribution networks.

Because of localized abundance rather than its scarcity, water has long held the title of the Oilfield’s Oldest Problem. It’s not what operators are in business to produce. There’s a reason why the subject appears with metronomic regularity: elegant solutions elude the industry.

Water has value. Perhaps operators should pay more attention to realizing that value. In a presentation, “Why produced water Is not used more: Barriers and possible solutions/opportunities,” for a National Academy of Sciences Workshop, “Flowback and produced waters: Opportunities and challenges for innovation,” John Veil, of Veil Environmental, offered an explanation. “One main barrier to increasing the use of produced water is an economic one. Removing salt from produced water is currently expensive, although the technology exists to do so and, in many applications, salt has to be removed from produced water before the water can be used. In addition, water is heavy and moving large amounts over any distance incurs energy and transport costs. Another barrier is a social one because of the concerns many people may have about drinking water that began as produced water, even after treatment.”

Veil said he did not have a simple way to address the social barrier other than perhaps creating case study examples and making that information broadly available. “To share the results of case study examples, intermediate parties, whether academics, national laboratories, or others, would be necessary to carry out the work.”

Policy barriers. Finally, Veil discussed policy barriers, which he said he has highlighted for about a decade. “Policy barriers include water rights and liability. Every state has the ability to set its own water rights laws and regulations, and as long as produced water is considered a waste product, the water rights holder may not be concerned. However, if produced water is treated with a plan to sell to an end user, the water attains an economic value which may change the approach to produced water by the water rights holder and other parties.”

In the past, Veil said he has asked questions of the major oil and gas companies about the liability of using produced water for a greater array of secondary purposes. His question is “If you could find a way to treat produced water at a very low cost, would your attorneys allow you to sell it or distribute it to end users?” He indicated that the companies generally respond that they would not be able to sell or distribute the treated water because of legal concerns. Veil is aware that some companies are examining this kind of approach, but he suggested that those who try it may often be the small- or medium-sized companies.

Opportunities and solutions. In terms of opportunities and solutions, Veil emphasized access to databases and clearinghouses for information, which could provide opportunities to match generators of produced water with potential water users. He knows of one company that has started a business following this approach. Veil also indicated that he would like to see movement toward involving third parties that are not the producers or end users to take the water, make sure it is clean, and distribute it to the end water user. In this scenario, the liability for the oil and gas companies might be removed.

Veil concluded by stating that a lot of produced water is generated on a daily basis, with a million oil and gas wells in the country producing about 2.3 billion gallons of water per day. Currently, the majority of produced water is injected back into the ground, while a very small percentage is being used for subsequent applications. However, he believes use of produced water is increasing.

Realizing value. Realizing all the value of this enormous, if unintentional, resource can take the form not only of revenue but also of the soft currency of positive public perception, of which there is generally a low balance in the industry bank account.

Jill Cooper, of Anadarko, describes the company’s development of strategy for potential produced water use that includes five parts: assurance, prudent use, technology development, communication, and advocacy.

An important component is community and stakeholder engagement, including, for example, a strong ambassador program in Colorado. Cooper mentioned that they have trained more than 1,200 people to communicate with the public and work with the company’s stakeholders and answer questions about produced water and other topics.

Cooper highlights a case study that described collaborative efforts on a freshwater transport system that Anadarko built in Colorado. The company worked closely with agricultural partners, because Anadarko was operating on agricultural lands. They designed and built infrastructure with the agricultural partners in the operating area and, when industry operations are complete, they will give the system to their agricultural partners. She noted that the agricultural partners know a lot about moving freshwater, and both parties benefited from working together.

Maybe the best solution to the produced water problem lies not in reduction of cost but realization of value. There is no more elegant solution to most business problems than revenue.