HOUSTON – Breaking into massive shale-oil reservoirs could push Texas toward a water shortfall of 3.5 trillion gallons by 2060, unless water recycling gains a foothold in the state’s oil fields, a recent Bloomberg analysis shows.
Hydraulic fracturing, the modern well stimulation technique used to crack open shale rock under a horizontal well, uses 4.2 million gallons of water for just one well in the Eagle Ford Shale. But oil and gas producers have recycled less than 10 percent of the water in the South Texas field and in the state’s Permian Basin in the west, according to data compiled by Bloomberg.
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Compare that to operators in the Marcellus Shale in Pennsylvania, who recycle about 85 percent of the water they use in fracturing natural gas wells. Rising water-handling costs, however, may convince their Texas counterparts to curb the disposal of water.
Trucking water around the Eagle Ford and Permian Basin costs 50 cents to $7 for every barrel of oil produced – generally more expensive than the Bakken Shale in North Dakota but cheaper than the Marcellus. Fort Worth-based Approach Resources, for example, expects to cut its per-barrel water costs to 50 cents from about $5 after it implements recycling measures in Texas, regulatory filings show.
Water-handling methods like trucking have proven a burden for other companies in the state, as well, including Pioneer Natural Resources, Apache Corp. and Occidental Petroleum, according to Bloomberg. SandRidge Energy has spent $650 million on pipelines to dispose water and other water infrastructure.
In some cases, water costs can account for 10 percent of the cost of a shale gas well, and have pushed the cost of extracting oil up by $2 to $10 per barrel, Bloomberg estimates.
Texas oil companies have drilled about 3,500 wells across the Eagle Ford and the Permian Basin in West Texas, a fact that could drive the shale wastewater treatment business to $600 million in the state within the next decade, Bloomberg analysts wrote.
Earlier this month, the non-profit Ceres reported the Eagle Ford used the most water of any U.S. region at 19.2 billion gallons over 18 months, and that 98 percent of the wells in the South Texas play were in areas of medium or high water stress.
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