One of the costs of oil and gas production in the Permian Basin that’s not often discussed is frac water disposal. It can account for a third of operating expenses. And that’s just the money part.
There are other costs, too. Very high costs.
When they talk about “producing water” in the following article, it might not have the meaning you’re thinking about.
We would more likely consider water production as the amount of water coming out of our well. They are talking about the toxic waste water produced by fracking the gas they want to pipe through our Hill Country.
They pull good water out of the aquifer and use it in the fracking process, where it then becomes highly toxic. Sometimes they can reuse it for more fracking. And often they have to dispose of it. Somewhere, somehow.
They are quickly amassing more frac water than they can sell, so they want to be able to dump it into our rivers and streams. And they’re trying to get laws passed to allow them to do just that.
Kinder Morgan and other corporations like them in the oil & gas industry are willing to sacrifice OUR health, OUR livelihoods, OUR property, for THEIR profits. They don’t seem to even give it a second thought. It’s “just business” to them.
Does this seem right to you?
Here’s the article:
The Largest Challenge to Permian Field Development
From sourcing to disposal, water is becoming the largest challenge to field development in the Permian Basin.
That’s according to energy research and consultancy company Wood Mackenzie (WoodMac), which made the statement in a recent post published on its website. In the post, WoodMac said failure to address these issues could increase costs, “with potential consequences as severe as well shut-ins”.
“The number of completed Permian wells continues to increase, and water disposal volumes are forecast to double by 2022,” WoodMac said in the statement.
“This produces increasingly large volumes of water. Even with 100 percent water re-use for completions, which is unlikely, the current salt water disposal infrastructure is expected to hit capacity in the near future. Additionally, increased water trucking has created traffic jams and damaged roads,” WoodMac added.
“Water disposal costs can account for a third of total lease operating expenses in the Permian. Producers simply cannot afford to cut corners on water management,” WoodMac continued.
In the post, WoodMac stated that the water midstream space is “ripe” for mergers and acquisitions and revealed that it expects the pace of water-related infrastructure deals in the Permian to “pick up considerably” in 2019.
“The water midstream space is screaming out for capital in the Permian. The infrastructure business is in its early stages of development and offers numerous possibilities for revenue streams,” WoodMac said.
Back in January, Rystad Energy revealed that demand for frac water in the Permian exceeded the total U.S. demand of 2016. The company forecasted at the time that water demand in the Permian will likely surpass 2.5 billion barrels by 2020.
Earlier this week the U.S. Energy Information Administration forecasted that oil and gas production in the Permian would hit 4.13 million barrels and 14.11 billion cubic feet per day in May, respectively.
Photo credit: www.rigzone.com Article source: RigZone|News