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Executive Summary: Sustainable Produced Water Policy, Regulatory Framework, and Management in the Texas Oil and Gas Industry: 2019 and Beyond

 Click here to download the Executive Summary.

Click here to download the complete 2019 White Paper.

Click here to download the 2014 White Paper - Sustainable Water Management in the Texas Oil and Gas Industry

Introduction: What’s at Stake

In recent years, the United States (US) has achieved historic global oil and gas production and has largely accomplished the goal of becoming energy independent. Texas has firmly established itself as the national leader in both crude oil and natural gas production and petroleum energy supply growth. Energy and water are inextricably bonded in achieving this feat. To assure US energy production dominance, it will be imperative for the Texas oil and gas industry as the national leader to continue to use water wisely and sustainably.

The white paper – Sustainable Produced Water Policy, Regulatory Framework, and Management in the Texas Oil and Gas Industry: 2019 and Beyond – provides facts and analysis that can be used by decision-makers, legislators, and voters. This information will help these groups determine where we are today, where we might be going, what we are doing right in Texas, and what we can do better with the ever-increasing volumes of produced water associated with such landmark energy production. The paper highlights produced water management trends, provides examples of recycle and reuse, explores the evolving regulatory and policy framework in Texas, and provides a fact-based analysis of the impediments to improving produced water management.

Water Demand and Produced Water Supplies Increase

Texas must simultaneously source large amounts of water for fracturing operations in water stressed areas, while at the same time managing millions of gallons of produced water from onshore unconventional operations. Water demand for fracturing operations will continue to increase due to the growing numbers of wells drilled and completed coupled with the concurrent increase in fracturing fluid proppant intensity, well lateral lengths and well design improvements. Given this large volume of water, it is important to recall the context; the estimated statewide water use by the entire mining/oil and gas sector remains less than 1 percent of all water used annually in Texas.

The white paper discusses concerns regarding economical and sustainable management of the projected increases in produced water volumes. B3 Insight estimates that in 2017 the total statewide volume of produced water was more than 8.5 billion barrels of water. Sourcewater, Inc. projects that by 2023, over 15 billion barrels per year of produced water will be produced statewide in Texas.

Changing Water Management Strategies

Horizontal drilling has encouraged operators to adapt their water management strategies, in some cases leading to outsourced water management. The tight formations where many Texas operators are currently producing oil and gas are not well suited to accept waterflooding, which is one of the most feasible options for produced water use in other formations. As a result, the move towards hydraulic fracturing in unconventional shale plays has resulted in an increased need for treatment to support recycle, reuse and disposal of produced water. Going forward, operators will have a choice to keep water management in house or contract with a commercial water company.

The scales may be tipped toward midstream water management by the dual advantages that the operator does not have to invest in infrastructure and the treated water may be less expensive than purchased fresh or brackish water. The midstream industry is ripe for consolidation, facilitated by private equity-based companies targeting companies with large continuous acreage and pipeline miles. The report describes different management strategies pursued by Pioneer, University Lands, and Matador as well as the midstream services by XRI, Solaris, H2O, and WaterBridge Resources.

Increased Recycle and Reuse of Produced Water

Produced water management strategies have evolved dramatically over the past five years with increasing, albeit low, levels of treatment. Not only does produced water recycle and reuse offset the need for fresh water for fracturing operations, treated produced water works better than fresh water. As treatment costs have come down and freshwater prices have gone up, operators have been able to reduce operating costs. Even if the cost between fresh and produced water were on a par, using produced water rather than fresh reduces truck traffic and decreases associated environmental and infrastructure impacts. Concerns remain regarding the longevity of disposal well capacity, changing state requirements for seepage/evaporation ponds, and reduced ability to reuse the treated water in basins where drilling and completion activities decline.

Data on current produced water treatment and recycle and reuse volumes in Texas are variable and difficult to certify. Interviews revealed some operators are currently using over 80 percent produced water to fracture new wells, while others have made it a priority to reuse 100 percent produced water. Other information sources indicate that recycle and reuse comprises such a small portion of the Texas water management market (less than one percent to five percent) as to be negligible in the grand scheme of water handling. The 2019 GWPC report estimated reuse exceeds 10 percent in the Permian Basin, but is negligible in the Haynesville Basin and is slightly over one percent in the Eagle Ford Basin.

Regardless of the exact percentage, the data point to consistent and growing uses of treated produced water in oil and gas operations. Produced water recycle and reuse is likely to increase as the midstream industry matures and injection capacity is unable to keep pace with production.

Current as well as existing and emerging tertiary treatment technologies reviewed in the report can support cost-effective recycle and reuse in the oil and gas field. However, none are “silver bullet” technologies that will lower costs to a degree that disposal wells would be obsolete. Disposal options must be considered and maintained. Going forward, disposal capacity may become limited, which will require more support from produced water treatment for recycling and reuse. Future advancements in desalination technology may lead to an economically competitive solution for the growing wave of produced water in Texas (and could allow for more beneficial reuse outside the oilfields.)

Drivers and Headwinds

The paper addresses “drivers” or major factors that influence operators’ produced water management strategies. These drivers include increasing fracturing water demands, increasing freshwater and trucking costs, decreasing treatment costs, local climate and geologic realities, company culture, and increasing volumes of produced water.

Next it reviews important “headwinds,” including public perception, regulatory, and political issues that are hard to put a price tag on, but nonetheless factor into water managers’ decisions. While it’s not easy to assign a dollar cost, the environmental, community, political, and regulatory issues factor into whether operators opt for treatment over direct disposal.

Leading the Way on its Regulatory and Legal Framework

Texas’s well-developed regulatory and legal framework demonstrates its past leadership on water issues. Texas has continued making legislative and regulatory strides to ensure authority keeps pace with the rapidly evolving business models of oil and gas production and produced water. There was significant legislative activity in the 86th session. While eminent domain and recycle incentive initiatives did not pass, the Legislature clarified produced water ownership terms and funded programs to alleviate impacts on local communities. Legislators expressed a need to see additional studies on economic impacts. Discussions and possible hearings over the next two years are possible as the issue is studied by legislators.

10 Recommendations

A key objective of the 2019 white paper is to make recommendations for the sustainable use of produced water. The goal is to offer suggestions that could improve the handling of produced water and encourage changes to Texas’s policy and regulatory framework that will encourage the safe and economic use of treated produced water outside the oil and gas fields in the coming years. It offers the 10 following recommendations:

  • Delegate National Pollutant Discharge Elimination System authority to Texas,
  • Eliminate 98th meridian policy,
  • Preserve Resource Conservation and Recovery Act exemption,
  • Maintain Texas jurisdiction over pipelines,
  • Increase interstate and associations coordination on policy,
  • Revise produced water statutes and regulations,
  • Institutionalize Texas and federal agency cooperation,
  • Prepare a roadmap for beneficial reuse outside oil and gas industry,
  • Develop incentive mechanisms to lower produced water treatment costs, and
  • Collect and provide public access to better produced water data.

Texas took an early lead in recognizing the potential value of recycling and began updating its regulatory framework in 2013. It is now time for the next generation of innovation to further improve the regulatory framework, with careful consideration of incentives for recycling, infrastructure improvements, pilot projects to study potential impacts of produced water reuse, improved data availability and updated metrics, and federal delegation of key statutory authorities. Produced water reuse and recycling in Texas will be poised to expand with the right statutes, regulatory framework, civil law, and economic incentives.

Concluding Thoughts: Moving the Needle to Beneficial Reuse

Five years ago, the question was whether produced water was “an asset or a waste.” Today we know produced water is both. The question remains: what is needed for produced water to become a valuable commodity with beneficial use outside the oil and gas industry?

To “move the needle” on beneficial reuse, proper research on environmental concerns, supporting legislative and regulatory frameworks, and a continued effort from the oil and gas industry to sustainably manage water are needed. These factors will ensure that beneficial reuse is a viable option one day soon. Will we be able to embrace the technology and craft the regulatory framework that allows us to take advantage of the opportunities that produced water may provide? The answer lies before us.

Authors: John Tintera, Texas Alliance of Energy Producers; Kylie Wright, GAI Consultants; Blythe Lyons, Alliance Consultant

 

Subcommittee Hearing: Oil and Gas Development: Impacts of Water Pollution Above and Below Ground

Subcommittee on Energy and Mineral Resources Date: Thursday, May 16, 2019 Time: 10:00 AM Location: Longworth House Office Building 1324 Presiding: The Hon. Alan Lowenthal

Witness List

Mr. Dominic DiGiulio, Ph.D. (testimony)                        

Senior Research Scientist                                             

PSE Healthy Energy                                                     

Mr. Daryl Peterson (testimony

Farmer and Landowner

Antler, North Dakota

Ms. Emily A. Collins (testimony)                                                

Executive Director & Managing Attorney

Fair Shake Environmental Legal Services

Pittsburgh, Pennsylvania

Mr. John James Tintera, P.G. 325 (testimony)

President, Texas Alliance of Energy Producers

Austin, TX

Click Here to watch the testimony.

 

Congress, Look at Texas for the Facts on Fracking

By John Tintera
May 17, 2019

On Thursday, the House Subcommittee on Energy and Mineral Resources will hold a hearing to investigate whether oil and gas drilling causes water pollution. It's a very important topic. If drilling pollutes our drinking water, new restrictions would obviously be needed to safeguard public health.

Fortunately, every available piece of scientific evidence shows that drilling -- particularly the technique known as hydraulic fracturing, or fracking -- is safe. As a geologist who has spent decades regulating the energy industry, I've seen firsthand the extensive precautions companies take to avoid any accidents and protect our water sources. Current safety regulations are already working. There's no need to impede energy production by binding companies with additional red tape from the federal government.

Just look at my home state of Texas. It's by far America's biggest energy producer,  and home to the 75,000-square-mile Permian Basin, the world's most productive oil field. The Permian and other Texas oil fields use tons of water responsibly whether for hydraulic fracturing, processing, or refining.  

How responsible are Texas drillers when it comes to water management? Well, there hasn't been a single documented case of groundwater contamination associated with fracking.  

This drilling technique has led to an unprecedented oil and gas revolution. In just the first quarter of 2019, Texas, for the first time ever, produced more than 5 million barrels of crude oil every day. The state accounts for an astounding 40 percent of all crude production in the United States. 

The cooperation between industry and Texas state regulators is chiefly responsible for this spotless safety record.

Texas state law is as crystal clear as its water. Texas outlaws any pollution of any and all bodies of water -- whether above or below ground -- period. The law defines pollution as any change at all to water that would make it harm humans, animals, plants, property, or public health in general. 

There are numerous key laws -- 13 total -- that serve as a regulatory framework to enforce the no-pollution rule. They outline rules for everything from how to drill to how to clean up a spill.  They address almost every water protection concern that could arise from oil and gas production. 

Take fracking, a process which requires immense amounts of water. There are rules to govern how practitioners drill, what cement and casings they use, and how they control their wells.  Additionally, they are required to continually monitor pressure levels beneath the surface and report malfunctions to inspectors. 

Or consider waste disposal. The Texas regulations protect surface and subsurface water from liquid and solid oil field waste. Injection wells, the shafts that carry fluids down to porous underground rock formations, are highly regulated by the EPA and encased in multiple layers of cement to protect drinking water. The EPA audits each injection well annually. 

Regulators wouldn't be able to enforce these rules without a small army of state inspectors. There are hundreds of them in Texas that rove the oil fields to make sure everything is up to snuff.  These "outriders" have access to all the online data they need to ensure proper inspection. 

Companies are not only complying with the regulations; they are constantly finding new ways to protect water. Operators in the Permian Basin are using new technologies like "clean brine" to make produced water clean enough to reuse.  They are also building pipelines to wastewater treatment or recycling facilities and reusing produced water. The reused water is not only used for more drilling, but can be used for community improvement like de-icing roads during winter. 

Some companies are finding novel ways to reuse and conserve water. In 2016, one Texas-based energy company opened a 20-mile pipeline to receive treated municipal wastewater from Odessa, Texas that can be used in all its operations. Reusing municipal wastewater reduced the company's reliance on freshwater needed in Odessa for drinking, and compensates Odessa for once-useless waste. 

Thanks to sensible regulations, regular inspections, and industry efforts, Texas energy companies have little impact on the state's water supply. A study by the state found that fracking accounts for less than 1 percent of total water use in the state, far less than agriculture. 

Texans know what they're doing when it comes to safeguarding their drinking water. There's no need for Washington to impose additional, needless regulations when the current ones are already working perfectly.

 

John Tintera is a regulatory expert and licensed geologist with a thorough knowledge of upstream oil and gas exploration. He spent over 20 years working for the main energy regulator in Texas, the Texas Railroad Commission, and ultimately served as its executive director. He is currently the president of the Texas Alliance of Energy Producers.

 

 

Texas Fuels The World:
An Open Letter to All American Energy Consumers

 

January 14, 2019  For Immediate Release
Austin, Texas - from the Headquarters of the Texas Alliance of Energy Producers

Oil and gas exports from Texas’ hydrocarbon reservoirs are a rock-solid guarantee that America’s light switches work, computers hum, and our paychecks are more secure. Texas hydrocarbon energy fuels the world, making our lives safer and more prosperous. Our hydrocarbon energy and technology can – and will – help today and tomorrow the one billion people worldwide that live in energy poverty.


The benefits are obvious.


Texas hydrocarbons, including our plentiful natural gas, have allowed the U.S. to lower key emissions. Natural gas is cleaner burning, readily available, fully regulated, and exists within America’s borders.


The national debate over energy does create an important opportunity. It allows for a much needed conversation about comprehensive energy regulatory reform. Let’s identify and eliminate duplicate and unnecessarily burdensome regulatory requirements that cost more than they save. It is important to stop damaging federal regulatory overreach when it occurs, and look for potential delegation of federal authority to our States. All Americans should read Texas Senate Concurrent Resolution 26 from the 85th Legislative Session, which was voted into law and signed by our Texas leaders.  Its important message was a call to “transcend partisan politics and correct misuses of federal regulatory power that have threatened the Texas oil and gas industry, the jobs it creates, and the economy of the state.” 


Hydrocarbons will continue to remain a vital part of all domestic and worldwide energy solutions. America must reject any political trend, deal, or social philosophy that threatens national security which is built on our energy independence. The federal government must never lose touch with the reality of jobs and the role of abundant and inexpensive energy for our communities and the world. That energy comes from hydrocarbons.
We call on our elected officials to use Texas bountiful energy wisely to solve problems and save lives today, and not focus on unrealistic and politicized promises that mislead the American people and create nothing but new problems for tomorrow. In Texas, we know that hydrocarbon energy creates prosperity that lifts the quality of life for all our citizens. If deemed necessary, this prosperity can harden vital infrastructure like roads or ports, build pipelines that can transport not just oil and gas but water to areas suffering from drought, build recycling facilities, and ensure that we use our God-given resources for the betterment of all mankind.


The best has yet to come for our beloved America and the entire world as it looks to the future, fueled by Texas hydrocarbons.



--END--

For additional information, please contact Alliance President John Tintera, 512-680-3055, [email protected],

or Alliance Senior Vice President Jo Ann Baker, 940-723-4131, [email protected]


 

 Hello all new and returning members,


My name is Jamie Weber and I am very excited to join the Alliance as the new Student and Young Professional Coordinator to help grow the next generation of energy professionals.
I know firsthand how important my networking and internships in college were for me to get a job and I would love to be a resource for you to help you find those opportunities through the Alliance.
Joining the Alliance is free (our corporate sponsor is Basic Energy Services) and can give you several opportunities to interact with the 2600 members of the Texas Alliance of Energy Producers and network. As I step into my new role with the Texas Alliance, I encourage you to reach out to me so that we can discuss any questions or concerns you may have moving forward.


Benefits of becoming a student member of the Texas Alliance
● As student members of the Alliance, you will stay informed on legislative briefings of state and federal issues and their impact on the industry.
● You will receive our email periodicals and publications at no charge.
● It will provide you with the opportunity to network and attend TAEP events and seminars.
● You will have the opportunity to potentially gain scholarships, internships, and mentorships with our highly skilled members.
● Joining as a student is free and your free membership will extend one full year after you graduate.


The Texas Alliance of Energy producers currently has the largest student membership program of any statewide trade association with almost 300 student members in 30 schools across the country.
We are looking to increase this number even more because 40-60% of the current workforce will retire in the next 5-10 years, and as young professionals, the Alliance would love to help you maximize the opportunities becoming available due to this workforce shift.
Texas Alliance student memberships are developed by students with students in mind and are always free. We are very excited about our growing student program and are working hard to create a valuable experience for our students and members.
If you are interested in learning more about internship or mentorship opportunities, please do not hesitate to contact me to discuss any questions, comments, or suggestions you may have at [email protected].

 
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