Critical View of Technology Requirements

Overview• Energy issue with produced water and its associated costs

– Produced water and hydraulic fracturing flowback water is generally mineralized and contains particulates and dissolved organic compounds

– Water brought to the surface as part of the E&P operation– Depending on the source, the water amounts can be significant, such as

unconventional plays of coal bed methane or tight sands

• What are the different types of produced water?• Can produced water be recycled?• Is the drought in the Western US an issue with energy

development?• What issues need to be solved in the future?

Discussion Outline• Introduction• Volumes of produced water• Water conflicts with energy development• Role of agriculture• Cost implications• Summary

The global situation for water is not improving and will be an impediment to industrialized growth over time.

Water Use as a Function of Overall Water Management

Water Use in Western US

Agricultural Use

Municipal

Other

Fracking

What is the percentage of total fracking and energy development = 0.14% of total use in the US typical - (example is Colorado)

Largest use is Agricultural at 85% Second highest use is Municipal and Industrial at 7% All others is 8% This 0.14% equals the amount of water used on an annual basis

by the City of Denver.

So what is the issue? Can’t we get more water from Agriculture?

• Agricultural use is increasing

• Environmental groups are fighting fracking and energy development in general Agricultural use has to increase

• Municipal uses are increasing

• Oil and Gas can out bid all others

• Water from Agriculture will be a PR nightmare

Projected Water Shortages

Reference: USBR - Water 2025 Study

• Areas of red are water short

• Note that in the western US, there is an opportunity to utilize produced water for beneficial use

Projected Produced Water Volumes

Produced Water Volumes:

• US – 21 Bbbl/yr

• Wyo – 2.36 Bbbl/yr

• CO – 0.38 Bbbl/yr

• Ut – 0.15 Bbbl/yr

Recent data in Colorado suggests dramatic increase in volumes

Brackish Water in the US• Efforts to find new untapped water

supplies in the US• NAS study on desalination• Constraints are not the

technology, but the financial, environmental and social factors

• Participation is needed by all in the development of this resource to limit any significant issues associated with this treatment

Inland Desalination a Now-Attainable Solution

Saline Aquifers

Resources

Problem

• Drought is still an issue

• Energy Development can demand water in short supply

What is the impact of the drought on energy production?

Availability of water in Permian Basin with extended drought

Colorado River basin issues Municipal water supplies are stretched

alreadyLake JB Thomas 0.50% full

(0.1% 6 months ago)EV Spence Reservoir 5.1% full

(0.2% 6 months ago)OH Ivie Reservoir 20.7% full

Requirement for District is to supply water for drinking and public safety – water for E&P operations is not a concern and very limited at this point

“If you don’t have water, you can’t attract industry” – Guy Andrews – Economic Development Director – Odessa Texas

Full Reservoir

Current Conditions

Treatment Issues• Treatment to what

standard?• Frack water

makeup?• Discharge to a

surface water or tributary groundwater – 40 CFR 435

• Disposal is Class II injection well

• Disposal is surface water pond

Beneficial Use of Produced Water• Upper Colorado River Basin

(Green River Play) – at 2 bbl’s/MCF – 70,000,000 AF or potentially 500,000 to 1,000,000 AF per year

• Potential users are entities on the lower Colorado River Basin

• Need all entities within the Colorado River Basin to cooperate

• Discussions with State Engineers of the Upper Colorado River Basin

Produced Water as an Asset• Historically, produced water has been treated as a waste

product – Current methods of disposal – reinjection (Class II Injection

Wells), evaporation ponds and direct discharge – are being challenged due to adverse environmental impacts

• Plan to turn this wastewater into an asset - a marketable product - by:– Treating for surface discharge– Conceiving a unique water delivery system - augmenting

tributary water supplies with non-tributary water– Pioneering a path through the numerous legal and

regulatory obstacles

Ownership of Produced Water• Colorado Example

– Tributary – Non-Tributary Groundwater– HB 1303 – how does this apply in

Colorado– COGCC Rules (907)– State Engineer

• Agreement on non-tributary status (Fossil water in other states)

– CDPHE Technical Review, Permit and approval

– Landowner issue– Water Rights & Court

• Other Western States– Prior appropriation– First in Use – First in Right

Permitting Requirements

Example Projects• Wellington Colorado

Project – Ag irrigation and hydraulic fracturing make up water

• CBM Project – Wyoming – water reuse and sale of produced water as augmentation water on the Colorado River

• Energy – Carbon Capture Project Wyoming – recovery of lithium from dewatering operation

Issues that need to be solved in the future

• Brine disposal and potential recovery of chemicals

• New technologies that will separate salts and organics at a lower energy requirement

• Better utilization of water and its management• Adoption of water reuse and recycling

Summary & Conclusions – What have we learned?

Water use for E&P operations is critical to the future of the industry

Produced Water can meet surface water discharge requirements

State Wide permits are available in some states and allow for expedited permitting

Discharge standards can be daunting but with careful design can be met

Be aware of what you add to your fracking fluids as this is what you will need to remove

Brine reuse and recycling should be considered Harvesting of metals should be considered in the future

to offset costs

• Water Rights associated with produced water turn this waste into an asset

• Produced Water Reuse• Site specific• Formation will add constituents that might be an

issue• Hydraulic Fracturing Flowback Water Reuse

• Viability highly dependant• Transportation Economics• Disposal Economics & Availability• Treatment Economics (TDS – key driver)

Summary & Conclusions – What have we learned?

Summary & Conclusions – What have we learned?

Treatment – becoming more refined Customized to influent characteristics & output req. Mobile or Centralized depending on volumes and

transportation Pre-treatment removal is key to success

Organics Hardness & Metals Particulates Bacteria Control

If organics and scaling compounds removed, reuse may be achieved without TDS removal in some cases

Water reuse will likely become SOP in many areas