Demand for frac water and wastewater treatment set to soar by 2021, says Rystad Energy
Energize Weekly, January 30, 2019
The demand for water for hydraulic fracturing of oil and gas wells has more than doubled in the last three years and is projected to reach more than 6.3 billion barrels by 2021, according to an analysis by Rystad Energy.
Hydraulic fracking sends water, chemicals and sand into wells under pressure to fracture rock and release oil and gas. It has been a key technique in opening tight sands and shale reserves and enabling the U.S. industry to reach record production.
“Frac water demand has sky-rocketed,” Ryan Carbrey, senior vice president at Rystad Energy, said in a statement. “This surge is driven by both increased activity and higher proppant intensity. But even with such steep growth, market concerns about sourcing challenges and bottlenecks appear to be minimal.”
The amount of water per well has grown as much as 770 percent, according to a study by Duke University researchers, as the horizontal wells drilled through shale have grown longer, with some 3 miles long, and increasing amounts of sand or other proppants are used to keep fractures open.
“Recent studies have suggested that intensification of the hydraulic fracturing process through drilling longer horizontal laterals has resulted in increased water use and hydrocarbon production,” the Duke study said.
Rystad Energy, an industry consultant and research firm, estimated that in 2019, water demand will increase 6 percent to 5.2 billion barrels.
While all seven of the shale basins analyzed by Rystad Energy showed increases in water demand, the rapid increase is being driven by the Permian Basin, which straddles Texas and New Mexico.
By 2020, Rystad Energy estimates that the Permian alone will consume more than 2.5 billion barrels, about 40 percent of all the water used for fracking in the country. The second largest consumer of water will be the Haynesville Shale in East Texas and Louisiana.
The flowback from the wells, a mixture of the frac water and “produced water” that was trapped in the rock strata, will also become a bigger management issue.
The market for water treatment will see strong growth with a 28 percent increase in capacity over 2018 to 1.4 billion barrels, the Rystad Energy analysis said. The company is forecasting water treatment capacity will double by 2020.
“Growth in treatment utilization is driven by larger operators that can make necessary investments in treatment systems,” Rystad Energy said.
In the Permian, treatment capacity is projected to grow to 800 million barrels by 2021.
While the amount of produced water projected to increase by a third in the Permian by 2021 and lead to local “disposal constraints,” overall there should be spare disposal capacity in the region, Rystad Energy said. Producers have relied on trucks to move the water.
“Water disposal is not currently an issue across the Permian as a whole, but some operators are having local difficulties,” Carbrey said. “We expect the water disposal market in 2021 will be tighter due to significant water production increases from the Permian-Delaware. More infrastructure would be needed beyond 2021.”