30 August 2019
The rise of recycling in the Permian
Interest in recycling and reuse will grow so long as costs don’t add to producers’ burdens
A major recurring theme at Produced Water Society Permian Basin 2019 was the rising appeal of produced water reuse in oilfield operations. Several developments must take place within the industry before we can see extensive basin-wide recycling.
According to Gabe Collins, fellow at Rice University’s Baker Institute, if Permian Basin oil production reaches 6.5 million bopd by mid-2024, we can expect produced water volumes to double to around 26 million bbl/d. At the same time, traditional disposal faces challenges.
Regulators have made injection well permitting guidelines more restrictive in response to concerns over induced seismicity and other environmental issues. The resulting permitting slowdown together with expected produced water increases signal the need for alternative water management practices if the industry is to sustain growing hydrocarbons production.
One option, though not a silver bullet, is to redirect produced water to fracking operations. The average fracked well in the Permian Basin requires around 275,000-325,000 bbl/d of water, a figure which has risen considerably since the advent of unconventional drilling. Given that Permian development is taking place in the arid southwest, producers are more and more constrained by the cost of precious freshwater resources. The situation makes using cheaper brackish water and produced water appealing for frack jobs.
Recently passed legislation in New Mexico and Texas seeks to clarify ownership and liability issues surrounding produced water, creating an incentive for producers to both transfer water to and source from third-party treatment and recycling facilities. Regulators hope this will contribute to freshwater conservation efforts.
Higher rates of reuse are also being pushed by some producers as they strive to meet internal sustainability goals, cut water sourcing costs, and boost efficiency in their unconventional drilling programs. ConocoPhillips water management supervisor Karen Work told attendees the company has developed its recycling program from the testing stages in 2012 to commercial implementation in the Delaware Basin in early 2019.
"Were using produced water for stimulation whenever appropriate. Our plan is to go to 100% as much as possible [in the China Draw asset]. We have just about met that," Work said during her presentation, adding in a later panel that the company is aiming for 63% recycling Permian-wide in 2019.
WPX Energy, another Delaware Basin-focused producer, has been pushing for greater reuse as well. Senior foreman Brian Kuh told the audience that since August 2018, the company has been doing 100% recycling in its core operations area with water from its own facilities in New Mexico.
While treatment poses additional costs that might make recycling seem like an uneconomical option, several conference presenters commented on ways it might actually help producers save money. As Miranda Cruttenden, product line manager at Hydrozonix, pointed out in her presentation, the transition to slickwater fracks has contributed to lower recycling costs because other methods can “limit your blend rate or require a lot more treatment upfront."
Producers such as Cimarex Energy have also shown how recycling can be cost-competitive. By focusing mainly on killing bacteria with hydrogen chloride and implementing a frack-on-the-fly process, the company has been able to avoid costs associated with infrastructure, such as produced water impoundments and treatment units.
“We're doing 100% water jobs without a problem. We pull it straight off the line and do it. If we didn’t tell our frack company that it’s 100% produced water, they wouldn’t know what was going to them at all,” Robert Huizenga, Cimarex’s water resources manager, explained.
Though reuse in fracking and other completions has clearly been embraced by key producers in the basin, a few obstacles prevent recycling from going beyond individual projects and becoming a more standard practice.
As several speakers noted, poorly connected infrastructure is an impediment to large-scale water transfers anywhere including to recycling facilities. Michael Dunkel, Advisian’s vice-president for upstream and midstream water, told the audience that cost determines produced water management.
"If you can have [water] in a pipe and move it to where you need it, then lots of doors will open," he said during his keynote address.
Collins asserts that jointly operated “hydrovascular” networks would make it easier for produced water to be transferred for disposal or reuse. The Groundwater Protection Council report that Dunkel presented at the conference likewise stresses the benefit of reduced per-barrel water transportation and treatment costs made possible by larger-scale infrastructure.
Several companies are already banking on the water midstream sector moving in this direction. In the past couple of months, both Solaris Water Midstream and Antelope Water Management have announced plans for new, multiclient recycling facilities in the Permian Basin. Both companies aim to capitalize on growing produced water volumes in the region, offering a more sustainable solution to increasingly costly and challenging disposal.