September 2020

Water management

We’re here! Now what?
Mark Patton / Hydrozonix

It was just a few years ago, when talk of energy independence meant a strong and growing unconventional oil and gas industry. With that, we saw the development of oilfield water management companies and the rise of the water midstream company. Now, we are an industry under attack, institutional money is leaving, and we have politicians calling for bans on hydraulic fracturing. We can ask ourselves how did we get here? I’m here to say, it doesn’t matter—we’re here, now what?

The path forward. As the world continues to push alternative energy, in the form of wind and solar, it is becoming clear to many that this is not our path forward. A recent study showed that our current energy infrastructure takes up less than 1% of the U.S. surface land mass, but switching to solar and wind would increase this footprint to over 25%. Now, consider a report published by the World Economic Forum, which describes how the critical minerals needed for alternative energy are sourced from just a few countries, and, as a result of geopolitical issues, can be subject to supply chain disruptions. Now, take into consideration that an electric car, for example, needs five times the minerals needed by combustion vehicles, or that a wind farm needs eight times the minerals needed by a conventional gas-fired power plant. And remember, that these minerals require mining, a very energy-intensive process that is not emission-free.

Definition problems. You see, wind and solar are neither sustainable nor renewable, they both require non-renewable minerals for construction, and both have a shelf life, at which time they require replacement. That’s why I will refer to them as alternative energy. In fact, the IVL Swedish Environmental Research Institute, on behalf of the Swedish Energy Agency and the Swedish Transport Administration, found that when you compare the full cycle of mining minerals for electric car batteries, that there is a significant difference between the carbon footprint of making an electric vehicle and making a combustion engine vehicle. So much so, that when compared to a diesel vehicle, you have to operate an electric vehicle for many years before reaching an environmental break-even.

Why am I bringing this all up in an oilfield water management column? Well, simply, we cannot realistically transition away from oil and gas, because alternative energy lacks the infrastructure, requires mining of critical minerals that aren’t widely available, and the emissions generated from mining of these minerals and then manufacturing turbines and solar panels is being ignored. What we will see is an increase in alternative energy, but we will never see the elimination of oil and gas.

Public perception. What we can’t ignore is the negative public perception, so we do need to take the business imperative, Environmental Sustainability and Governance (ESG), more seriously. Just last month, investors representing more than $2 trillion dollars were calling on Texas regulators to do something about gas flaring. I see this as significant. At a time when the investment community has turned its back on our industry, we see large investment groups calling on companies to implement a flaring reduction? I see only two reasons for this: 1) they understand that oil and gas is a critical component to our energy future, but they want to see the industry take some action to improve their ESG profile; or 2) they are already invested in oil and gas, and don’t want to see a further erosion of their holdings. I lean toward the first, because they have mostly divested from oil and gas stocks already. To me, this is a sign that the investment community will come back, if we can improve our ESG profile.

So that’s the situation. Now what? Let’s try to improve our ESG profile. For the first time, I was actually asked by a major operator to help perform a carbon footprint analysis, because they developed an internal cost per pound for carbon dioxide emissions and needed to factor this cost into their evaluation—so it’s starting.

For oilfield water management, this means less trucks and more pipelines, which is a huge reduction in carbon footprint, and it saves money anyway. But we can’t stop there. We need to look at flare gas to fuel water transfer pumps, like we are doing with frac fleets, and potentially capture flare gas and fugitive emissions to power the whole oil field. This is, of course, a huge undertaking, but it will be the type of impact that will get the investment community and Wall Street’s attention. This is the type of move that puts ExxonMobil back on the Dow Jones Industrial Average.

Achievable EGS goals. There are, of course, many other things that we can do on a smaller scale, looking for opportunities to improve ESG. We can reduce truck trips with automation, for example. In another example, Hydrozonix has taken the time to fully automate all of our treatment systems, and we already have unmanned recycling occurring in numerous locations in the Permian. We will see more automation to reduce costs but also to reduce carbon footprints. I expect that more major operators will be putting a value on their carbon footprints, to meet goals that they already announced and to help quantify their performance to those goals.

For the oilfield water management industry, the major “Now What?” will be turning produced water into a reusable water resource. This should be the focus for the next few years, because if our industry can be not only an energy producer, but a net water producer, we will be too critical to ignore—and “then what?”

About the Authors
Mark Patton
Mark Patton is president of Hydrozonix and has more than 30 years of experience developing water and waste treatment systems for the oil and gas industry. This includes design, permitting and operation of commercial and private treatment systems, both nationally and internationally. He has seven produced water patents and two patents pending. He earned his B.S. in chemical engineering from the University of Southern California (USC) in 1985.
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