The Fuse

Produced Water: An Expensive Problem for a Thirsty Fracking Industry

by Leslie Hayward | April 03, 2015

For every barrel of oil produced here in the U.S. there are roughly 7-10 barrels of “produced water” a toxic substance that is nearly impossible to treat.

When most people visualize oil production, they imagine a smooth gush of crude oil emerging uninterrupted from the ground. This scenario is occasionally true when conventional oil fields are first drilled, but rarely lasts for long—the majority of the liquid that comes from an oil well is in fact not oil at all, but something toxic and virtually unusable called “produced water.”

According to the Department of Energy, for every barrel of oil produced globally there are three barrels of produced water. Here in the United States, the number is closer to 7-10 barrels of water for every barrel of oil. In the highest scenarios, the ratio can reach 50 barrels of water to every one of oil. Importantly, shale oil production yields particularly high water-oil ratios—a phenomenon that often adds high costs and unwanted risk for the industry.

That’s a lot of water wasted. But does it have to be?

Dirty water lends itself to disposal

So what is produced water? It is mainly saline water trapped in the reservoir rock, and brought up along with oil or gas during production. It can contain minor amounts of chemicals added during production. Unlike freshwater, produced water exists under high pressures and temperatures, and contains oil and metals. According to the Produced Water Society (and yes, there is such a thing), most produced water contains the following, in a wide range of concentrations:

  • Dispersed oil droplets and dissolved oil
  • Naturally Occurring Radioactive Material
  • Treatment and workover chemicals
  • Dissolved gases (particularly hydrogen sulfide and carbon dioxide)
  • Bacteria and other living organisms
  • Dispersed solid particles

These unfavorable impurities make it nearly impossible to process and manage produced water. Valves, lines, orifices, and disposal wells are likely to be plugged by solid particles, calcium buildup, and other matter. In addition to clogging, there is a high risk of corrosion due to acid gases and electrochemical reactions of the water with pipe and vessel walls. It can also be hard to separate the suspended oil droplets, and temper the growth of bacteria colonies and their harmful byproducts.

The volume of produced water that the oil industry creates and manages on a daily basis is truly staggering.

Given the number of impurities, treatment is expensive, and industry tends to rely on disposal over beneficial reuse. This is unfortunate because the volume of produced water that the oil industry creates and manages on a daily basis is truly staggering. In the United States alone, the roughly 9 million barrels of crude oil per day we produce amounts to almost 90 million barrels of produced water daily—that is, just over one trillion gallons of produced water every year.

Management challenges

Given the sheer volume of this substance being produced, it’s worth examining where it is concentrated and how it is managed. The ratio of produced water to oil (WOR, or water-oil ratio) varies significantly by formation. For example, in 2009, offshore drilling accounted for 27 percent of U.S. oil production, but only 3 percent of produced water.

Onshore, according to DOE, 98 percent of produced water is injected underground. Fifty-nine percent of that is injected into producing formations to maintain pressure and increase well output, and 40 percent is injected into other rock formations for disposal. The remaining two percent is managed through beneficial reuse and other surface disposal methods.

Because of the number and type of impurities, beneficial reuse is challenging: Achieving even basic treatment typically involves use of physical, chemical, and biological treatment processes such as filtration, sedimentation, electrochemical treatment, nanofiltration, and chemical sanitation. According to a Devon Energy source, beneficial reuse is 50-70 percent more expensive than disposal, which creates a clear incentive for industry not to recycle.

Offshore, the vast majority of produced water is dumped back into the ocean regardless of its quality—with a few regional exceptions. According to the Department of Interior, in the Gulf of Mexico area west of the Mississippi River, where elevated levels of naturally occurring radioactive material have been detected, radium must be measured if the produced water is to be discharged overboard.

Onshore, disposal presents a challenge. Even though the industry standard is to inject produced water into disposal wells, lax regulatory structures or environmental ambivalence from industry can lead to surface spills and otherwise improper disposal. There is also a growing link between disposal wells and earthquakes in states like Oklahoma.

A cost burden during a period of low prices

The treatment of produced water is a major component of the cost of producing oil and gas.

Oil wells may start out producing very little water, but sooner or later they all produce a much larger volume of water than oil. The ability to efficiently and economically dispose of this water is critical to the success in the oil production business.

Bernstein Research estimates that some wells are producing as much as 90-95 percent water.

Importantly, shale formations create far more produced water than conventional formations, which impacts the marginal production costs for the fracking industry. Part of this is due to the volume of water that is required to frack the well in the first place—but there’s also a lot of water locked into shale oil formations. Bernstein Research estimates that some wells are producing as much as 90-95 percent water, which not only increases water treatment costs for producers, but also forces them to sell their oil at a significant discount, ranging from $10-30 per barrel. According to Bernstein’s analysis, as oil prices have dropped, marginal wells with higher produced water to oil ratios are among the first to be sidelined.

Pursuing beneficial reuse

Produced water is already commonly used to increase pressure in existing conventional fields, but there may be another application. Some reports suggest that produced water can be repurposed, displacing freshwater used for fracking.

Some reports suggest that produced water can be repurposed, displacing freshwater used for fracking.

This usage still requires some base level of treatment, and there are some remaining technological hurdles to overcome before the practice is widespread. At the same time, there are obvious benefits to this approach. After all, produced water is already conveniently located in the oilfield, and many of the country’s most prolific shale formations—such as the Eagle Ford and Barnett formations in Texas—are located in water-scarce regions. Furthermore, reducing the amount of water that is pumped into disposal wells, and reducing demand for freshwater, can help improve public perception of fracking operations in areas where water supply is a concern. One company, Omni Water Solutions, has developed portable trailers that scrub produced water on-site.

While it is expensive and difficult to purify produced water to the point where it can be safely discharged into the environment, or used to serve human populations as freshwater, there is hope that the massive volumes of produced water being created every day can find a useful application, offsetting the industry’s increasing demand for freshwater.