Growing global
scarcity of freshwater has made this resource more valued than oil due to an
increasing world population and demand for water, pollution, and climate change.
Water shortage is a colossal economic and social cost to all consumers,
including the oil and gas industry, which is critically dependent on this
commodity for its operations. With an expected rise in water consumption in
the U.S. by an estimated 7 percent by 2030 from 2005 levels, 85 percent of
which will be used by the energy sector, fuel production is likely to both
increase its impact on water availability and quality and become vulnerable to
potential water supply disruptions.
With
the 36.5-percent increase
in U.S. unconventional fuel extraction between 2005 and 2012, this energy
sector faces challenges in balancing its water needs. While some reports claim
that water demand amounts to nearly 5 million gallons of freshwater per shale
gas and tight oil
well drilling, there is conflicting information and uncertainty about the
amount of water the unconventional energy sector consumes, which complicates
water management in and between the states. Safe disposal and treatment of
produced water from hydraulic fracturing, or fracking, are some of the pressing
concerns for the industry and nearby communities. As competition for freshwater
rises in areas of the U.S. where water demand for unconventional fuel
production is highest, for example, in North Dakota, Texas, and Colorado, recurring
severe droughts pose a risk to the long-term sustainability of water
resources in energy producing states.
This
complex energy-water predicament necessitates a comprehensive water management
strategy and collaborative government-industry led solutions. The lack of
comprehensive data and research on water supplies, the energy sector's use of this
commodity, consumption levels, and wastewater from fuel extraction stands out
as a main barrier to framing energy and water-related problems and developing
measurable solutions. Collection of such information could help determine the
future sources of water for the energy sector, the impact of the energy
industry’s water use on the society, and decision-making on allocation of
water.
An
important step to improving data collection could be establishment of minimum
standards for information-sharing on the oil and gas sector's water
consumption, set by the federal government. The federal government should
establish an online platform dedicated to disclosing information on the amount
of water used in oil and gas production, the volume of wastewater derived from
petroleum operations, and wastewater treatment, recycling, and disposal
practices. Penalties should apply for failure to report. Reliance on voluntary
disclosures could be ineffective due to insufficient and irregular reporting,
as evidenced by the experience
of FracFocus, an online registry designed for disclosure of chemicals used
in fracking.
Further,
due to the heavy role of state governments in regulating operations of energy
companies in their jurisdictions, states could step up efforts to manage
produced water from shale gas and oil drilling. Pennsylvania's
requirements to recycle flowback water from shale gas production and
limitations on surface wastewater disposal have increased water recycling in
shale gas operations. Texas
enacted new rules that encourage water reuse by eliminating recycling permits
for drilling operators if they recycle fluids on their leases or transfer the
water to another operator's lease for recycling. Such efforts could incentivize
the industry to look for innovative solutions to treating and reducing produced
water.
Extending
the efforts to improve water management, state governments and the industry
should also consider adopting best practices in seawater desalination in states
near the sea, for example, Texas and Louisiana, to shift from freshwater use
for drilling. This is particularly relevant given that the industry prefers
freshwater for fracking because it is less corrosive. As part of the measures
to prevent freshwater contamination, it is also imperative for the
unconventional energy sector to improve well construction, casing, and leakage
containment, especially in light of heightened public concern about the impact
of fracking on groundwater. The U.S. Environmental Protection Agency's
anticipated 2014 report on the impact of fracking on drinking water is likely to
help chart the course of further policymaking toward this industry.
Lastly,
the U.S. should consider expanding trading water access rights in some of the
arid southwestern states, as competition for water resources is set to increase
between energy, agricultural, and municipal usage. State governments should
study successful water trading schemes in western U.S. and globally and adopt
the best practices. An effective water trading mechanism will hinge on
distinctly and uniformly established water rights, which is not the case in
some of the most energy- and water-intensive states, such as Texas.
