New Data: Water Use in Hydraulic Fracturing a Key Risk in Water-Stressed Regions in Texas and Colorado, , Increasing Wastewater Disposal Risks
Press Release by Ceres, October 6, 2016
BOSTON, MA Oct 06, 2016
New Ceres research, released today via an interactive map, shows that 57 percent of hydraulically fractured oil and gas wells over the past five years were in regions of high water competition, particularly in Texas and Colorado, creating significant long-term water sourcing risks for communities, companies operating in these regions, and their investors.
“Even with the slowdown in oil and gas production, hydraulic fracturing is potentially heightening the competition for water resources in many of the country’s most water-stressed regions,” said Monika Freyman, director, Investor Initiative, Water Program at the nonprofit sustainability group Ceres, who led the water use research effort. “Oil and gas companies face increasing water risks in key basins, and investors and banks financing this activity should be pressing harder on their strategies for managing these water risks.”
Competition for Water in US Shale Energy Development
Note: Water stress is a measure of competition for water. See WRI indicator and maps for more information.
Chesapeake, EOG Resources and Anadarko Petroleum were the biggest water users overall, while Pioneer Natural Resources and Encana were especially active in regions with extremely high water stress.
The top three plays by water use were the Eagle Ford, Marcellus and Midland Plays, with the Eagle Ford and Midland Plays being of particular concern given both their high water use and exposure to high water stress, drought and declining groundwater supplies. Weld County, Colorado saw the highest number of wells drilled (almost 7,000 wells) and water used for fracking (more than 16 billion gallons) of any county in the United States.
The analysis, which aggregates data by shale play and by operator, is based on water use data from 109,665 oil and gas wells reported to FracFocus.org from January 2011 through January 2016 and water stress indicator maps developed by the World Resources Institute (WRI). (Extreme high water stress regions, as defined by WRI, are areas where 80 percent of available surface and groundwater are already allocated to municipal, industrial and agricultural users.)
“Hydraulic fracturing for oil and gas extraction, which used to be “unconventional”, is now a part of most conventional energy company portfolios in the U.S. and Canada. This has made water management a critical liability or competitive advantage for companies and their investors,” said Steven Heim, managing director for Boston Common Asset Management. “Ceres’s update provides investors useful data to reassess companies on their water risk exposure.”
The large volumes of wastewater produced by hydraulic fracturing that must be managed at the surface and ultimately disposed of in underground deep well injection sites are a significant and growing issue at the local level. These wastewater injections have been linked to surface and groundwater contamination events, as well as to earthquakes with Oklahoma limiting access to some disposal wells.
Other Key Findings:
Fracking-related water use from January 2011 to January 2016 was 358 billion gallons, equivalent to the water needs of 200 mid-sized U.S. cities.
The data show that while overall fracking-related water use peaked in 2014, average water use per well has doubled since 2013, from 2.6 million gallons per well to 5.3 million gallons per well at the end of January 2016. This is likely due to longer lateral pipelines and drill site activity.
Local communities at the epicenter of fracking are hardest hit by water demands for fracking activities. In seven of the top 10 counties, annual water use for hydraulic fracturing reached over 100% of each county’s domestic water use.
This update to Ceres’ 2014 report “Hydraulic Fracturing and Water Stress: Water Demand by the Numbers,” is designed to help investors analyze key trends on water use and water risk exposure by region and operator. It also provides recommendations for companies to improve their water management and reduce their overall exposure to water sourcing risks. [Emphasis added]
Aquatera expanding business operations by Svjetlana Mlinarevic, October 11, 2016, Daily Herald-Tribune
Aquatera has slowly been expanding its business operations in the past year with the hope of not only strengthening utilities in the area, but bringing in a profit to its shareholders and a discount to residents.
“We have a mandate to grow Aquatera and really we have a goal to have our utility rates that are below the median, when we compare ourselves to other cities, and to increase the overall return to our municipal owners,” said CEO Bernd Manz.
“The best way to (achieve our goals) is to generate revenue outside of our utility base, so we’ve been talking to other communities, offering our services there as a way of growing the company and generating more revenue that can help achieve those other goals.”
The company has expanded its operations to the Town of Manning and the Village of Rycroft where its staff operate the water and wastewater treatment plants there. The company signed six-term year-long deals with the municipalities with a renewal option.
Aquatera also signed short-term deals with the municipalities of Grande Cache and High Level where it trained its operators.
“At our core, our purpose is to help grow healthy communities and so if we’re able to do that, support other communities [frac operations and drilling crews?] in making sure that they have high-quality and reliable drinking water, the communities benefit and we do as well in terms of being able to expand our services to them,” said Manz.
The CEO said in terms of revenue it would depend on time and how successful the company is in serving other communities. He also said Aquatera has an interest in expanding further and has already done utility rate studies for some communities. If the company does expand outside the province, northeastern B.C. is seen as a viable option.
Not only is Aquatera expanding its water and wastewater operations, but it is also expanding its services to industry.
The utility recently made a partnership agreement with Alberta-based WaterStone Energy Services to develop, finance, and operate on-site micro-utilities in Alberta and B.C. for large scale wastewater treatment in the oil and gas sector, particularly in regards to fracking.
“Much of that water use is fresh water that once it goes down hole, it’s really removed from the water cycle,” said Manz. “We believe that if some of that water can be recycled, it would reduce the amount of raw water, or fresh water, that is used for fracking and then we can add value to that by reducing the amount of fresh water use and the amount of trucking or hauling or pumping that’s required currently,” Manz said. Waterstone is currently putting together the business model/system that will guide the projects.
What the projected revenue or expenses might be and how they would be split with WaterStone, Manz couldn’t say.
In 2014, Aquatera acquired Watchhorn Rentals, a private water and wastewater services company that provides services to industry, primarily work camps, in Alberta and B.C.
“Watchhorn, as a for-profit company, we expect a return from them as a way of generating overall revenue for us to meet those original goals of increasing returns to shareholders and reducing the overall utility rates that we charge,” said Manz.
Aquatera has been a utility provider for the Grande Prairie area since 2004. Its shareholders consist of the City of Grande Prairie, the County of Grande Prairie, and the Town of Sexsmith. [Emphasis added]
[Refer also to:
A proportion (25% to 100%) of the water used in hydraulic fracturing is not recovered, and consequently this water is lost permanently to re-use, which differs from some other water uses in which water can be recovered and processed for re-use. ]