RECYCLING PRODUCED WATER AND BRACKISH GROUNDWATER

IN THE OIL FIELD 2014

By Doug Hall, W D Hall Company

Austin, Texas

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Press Coverage on Water in Texas – lots!

“Texas must

limit agricultural water use”

Houston Chronicle, May 29, 2012

“The new oil is water” Odessa American Online, April 6, 2014

“Report: Fracking colliding with other water

uses during drought” San Antonio Express News, February 5, 2014

“Texas Legislature: Group pursues reuse of water from fracking” San Angelo Stand Times, Feb 16, 2013

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What is Produced Water and WHY should we recycle it?

• Product of oil and gas extraction • “brine” and “formation water” • Largest waste product

(BKT website)

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What is Produced Water and WHY should we recycle it? (cont.)

1. It’s one of the very few ways we can actually

add water to the local hydrologic system!

2. We don’t have to pump seawater from the coast!

3. We need more water.

4. Water is getting more expensive.

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Why Will the Price of Clean Water Continue to Increase in Texas?

1. New water supplies 2. System expansion3. System repairs4. Drought Fees

Supply and demand economics: Water is a commodity = water markets

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82% Population Growth by 2060(TWDB 2012)

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Regions with Water Shortages in 2060(TWDB 2012)

• Lubbock ~ 2,400,000 ac-ft/yr (irrigation)

• Dallas/Fort Worth ~ 1,500,000 ac-ft/yr

• Houston ~ 1,200,000 ac-ft/yr

• Rio Grande Valley ~ 750,000 ac-ft/yr

• San Antonio ~ 600,000 ac-ft/yr

• Austin ~ 400,000 ac-ft/yr

(if no new water supplies are developed)

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Droughts

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(Beach, James, 2012)

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(FNI Water, 2012)

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Oil and Gas Wells in Texas –the Source of Produced Water

Green=oil well

Red=gas well

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Produced Water Reuse(Michael Sims, RRC, 2013)

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Treatment for Reuse of Produced Waterin the Oil Field

Level 1 – Gravity separation from the oil and gas

Level 2 – Separation, filtration, flotation, EC to remove solids, TSS, particles, oils, bacteria, frac chemicals

• Results = clean brine• Very high TDS water (>200,000 mg/l) may be acceptable for reuse

Level 3 – Getting the salt out (RO, ED, EDR, Distillation)

Equipment and power costs increase as you reduce TDS levels. Many more possible uses for this water.

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Produced Water Treatment Costsfor Oil Field Use

Level 2 (Pre-treatment) ~ $.50 to $3.00/bbl (clean brine - HF water may not need more treatment)

Level 3 (Membrane de-salting) ~ $3.00-$8.00/bbl or

Level 3 (Thermal distillation) ~ >$5.00/bbl.

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Produced Water Disposal CostsThe numbers to beat!

Disposal wells in Texas

~ $.50/bbl to $2.50/bbl

The main driver for not recycling

+

Plus - $1.00/bbl/hour

The main driver for recycling!(loading, unloading and travel time)

Location is key!

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Produced Water Volumes in Texas

• Estimated• 650,000 ac-ft/yr (DOE for 2002)• 237,000,000 ac-ft/yr (USBR for 2009)• 775,000 ac-ft/yr (Tintera, 2013)

• Calculated based on oil and gas production (2012)• 410,000 ac-ft/yr to 880,000 ac-ft/yr

• Reported• 100,000 ac-ft/yr (RRC, 2012)

~1,000,000 ac-ft/yr estimate for Texas

The need = better information

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Brackish Groundwater – a Better Alternative for Now in

Texas?

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Brackish Groundwater in TexasOrange, yellow and red indicate brackish groundwater (TWDB)

It’s almost everywhere!

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Brackish Groundwater Depths in Texas(http://ne.water.usgs.gov/ogw/brackishgw/)

It’s reasonably shallow!

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Brackish Groundwater Use in Texas(Houston Chronicle, November 14, 2011)

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Brackish Groundwater Treatment Costs(TWDB 2012)

Total production costs for desalinating brackish groundwater ranged from:

$357 to $666/ac-ft.

$.001/gal to $.002/gal

$.05/bbl to $.09/bbl (Drinking Water Quality)

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For Comparison - Cost of Bottled Water

• Bottled water about $1.22/gallon nationwide• 300x the cost of a gallon of tap water

• For sales of single 16.9oz (500 mL) bottles, though, this cost is much, much higher- about $7.50 per gallon

• About $315/bbl!• That’s almost 2,000x the cost of a gallon of tap water and

twice the cost of a gallon of regular gasoline.

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Brackish Groundwater Treatment Costsfor Oil Field Use

After the first use in fraccing,

the cost for treating brackish groundwater

is roughly the same as treating produced water

(~ $.50 to $3.00/bbl)

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Estimated Volume of Brackish Groundwater in Texas

_________________________________________________________________

2.7 billion acre-feet* (880 trillion gallons)

(21 trillion bbls)

Of Less than 10,000 mg/l groundwater

Only statewide estimate - 2003(Arroyo, 2012)

*(LBG-Guyton, 2003)

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Getting better data_________________________________________________________

____

National Brackish Groundwater Assessment by the USGS Ongoing - Completion Date: September 2016

TWDB - Brackish Resources Aquifers Characterization System: BRACS

OngoingTWDB -http://www.twdb.state.tx.us/innovativewater/bracs/index.asp

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Estimated Volumes –Produced Water and Brackish Groundwater

Produced Water ~1,000,000 ac-ft/yr

Brackish Groundwater ~2.7 billion ac-ft

Equal to ~ 2,700 years of Produced Water!

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Produced Water vs Brackish GroundwaterOil Field

Produced Brackish

Concerns Water Groundwater

Is the local water volume sufficient for reuse? (location sensitive) Some times Most times

Concern over conflicting use – municipal? No Possibly

Is the local water supply reliable for > 20 years? Uncertain Most likely

Ownership Unclear Unclear

Cost of sourcing Uncontrollable Controllable

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Questions about Using Brackish Groundwater

Check these out early-• What is the quantity of brackish groundwater required? For how long?• Who owns the brackish groundwater?• Is the brackish groundwater planned for a future municipal supply?• What are the pumping costs now and in the future? • Will pumping from the brackish aquifer adversely impact overlying

freshwater aquifers? • Will the water quality (salinity) change during pumping? Deteriorate?

(Maliva, et al, 2014)

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Vision of a Stationary, Water Recycling Facilityfor the Oil Field

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Produced Water Recycling Facility – Irion County

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Produced Water Recycling Facility – Parker County

(Slutz, et al, 2012)

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What might a Stationary Produced and/or Brackish Water Recycling Facility look like?

• Location – close to produced water generators

(> 100 wells) from single or multiple E&P operators and treated water users (within approx. 15 mile radius)

• Easy access to brackish groundwater

• Size – 100 to 200 acres; security fencing

• Lined ponds and tanks for water storage (500,000 bbls or more); berms for water control

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Facilities and Equipment

• truck loading/ unloading and washing • oil recovery equipment • treatment equipment (able to treat at least 30,000 to 50,000 bpd)• office and laboratory • maintenance shop• living accommodations • communication towers • water pumps and pipelines • chemical storage sheds • fresh water well • brackish water well

• SWD well • And a waste storage area

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Logistical Management / Process Monitoring

• Smart logistical management and process monitoring (software) • in-out water volumes• inventory • lab analysis and results • storage and transport/ distribution services• equipment performance

• Reliable communications for reporting for business, technical, and regulatory needs

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Potential Benefits of Operating a Centralized PW/BW Recycling Facility

• Lower water acquisition, hauling and management costs for E&P operators

• Fixed infrastructure costs

• Economies of scale, leverage buying power

• Efficiency – fewer staff

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Potential Benefits of Operating a Centralized PW/BW Recycling Facility (cont.)

• Drought resistant, reduced competition for fresh groundwater

• Public safety – fewer trucks, fewer spills

• Eagle Ford Study: Pre-planning and establishing a centralized recycling system • 1400 wells planned over a 5 year period • Cost savings of 44 % (Robart, 2012)

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Risks Associated with Operating a Centralized PW/BW Recycling Facility

• Price of oil drops eliminating sources of produced water; Operators hesitant to sign up for long-term

• Unexpected regulatory changes; Could be caught up in local politics

• Brackish groundwater has less volume or poorer quality than anticipated

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Risks Associated with Operating a Centralized PW/BW Recycling Facility (cont.)

• Complicated contracts

• Competition with abundant, cheap SWDs

• Wrong location (proximity to sources, users, brackish groundwater)

• Wrong technology for treatment

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Summary

• Produced water can’t be relied on to supply adequate drilling and frac supply in most fields

• Existing fresh water sources will be in great demand; cost is rising

• A combination of produced water and brackish groundwater is a better, cheaper choice for use in future drilling and frac operations

• When to start using brackish groundwater? Now.

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“When the well is dry, we know the worth of water.”

—Benjamin Franklin, Poor Richard's Almanac, 1746

Thank You

For more information / brainstorming:Doug Hall

W D Hall CompanyAustin, Texas512-306-8444