Produced Water Management: A Comparative Study

The production of oil is a water-intensive endeavor. This is especially true in hydraulic fracturing, where a single well may require between 2.4 million to 7.8 million gallons of water.[1] In addition to flow-back water, produced water—water that comes from the formation naturally—also surfaces in the weeks following a fracing operation.[2]

 

Traditionally, disposal of this produced water has been viewed as an exercise in waste management. Rather than reusing or recycling the water, operators either injected it into underground disposal wells, left it in pits or ponds to evaporate, or discharged it to surrounding waterways. However, in recent years, these methods have raised a variety of environmental concerns. Underground injection wells have been linked to an increase in earthquakes, concerns have been raised about the potential contamination of drinking water, and general water shortages have raised questions about whether fracing is a good use of a scarce resource.[3]

 

For these reasons and others, the regulatory regimes in several states have started to evolve, and the reuse and recycling of produced water is becoming an increasingly appealing and feasible option for operators. As some states make it easier to take advantage of new treatment technologies and potential beneficial options for reuse, it is increasingly possible for produced water to be viewed not as a waste, but rather as an asset. Set forth below are the ways in which the regimes in two leading states in produced water recycling—Texas and Pennsylvania—have evolved over the last decade.

 

Texas

Produced water in Texas is regulated primarily by the Texas Railroad Commission, which is the nation’s longest running state agency and considered by many as the leader in developing policies and regulations to promote energy production.[4] In 2013, The Commission adopted new amendments to Statewide Rule 8, which is the state’s primary rule for wastewater management. The amendments were designed to enable and encourage recycling by making it less difficult for operators to get permits—which in turn makes experimenting with new technologies easier.

 

In addition to these regulations, the Texas legislature has enacted at least two other notable statutes that encourage the recycling/reuse of produced water. First, a 2013 amendment to the Natural Resources Code specifies that a person who transfers waste is no longer the owner of the produced water, and is thus exempted from tort liability related to the handling of the water.[5] Secondly, the tax code provides exemptions for items specifically used to process, reuse, or recycle wastewater that will be used in hydraulic fracturing.[6]

 

Pennsylvania

Due to Pennsylvania’s geology, injection as a disposal method for produced water was never as feasible as it is in other states. In addition to this challenge, Pennsylvania’s produced water contains unique contaminants that make it difficult to treat and release to surface body waters.[7] For these two reasons, the Pennsylvania Department of Environmental Protection (DEP-Pa) was relatively early to promulgate regulations that encourage the recycling and reuse of produced water.[8] For example, operators must submit a “source reduction strategy” to the DEP-Pa that identifies the methods used to maximize the recycling and reuse of produced water either for further fracing or for other approved beneficial uses.[9],[10] In 2013, it was estimated that approximately 90% of produced water in Pennsylvania was being recycled for use in oil and gas operations.[11]

 
Operators recycling wastewater in Pennsylvania must receive one of two permits depending on where they intend to treat the produced water. Under these permits, the discharge of produced water on to surface waters is not authorized.[12]

 
In May of 2016, Pennsylvania approved changes to the rules governing surface activities associated with oil and gas for the first time since 2001. The new regulations codify existing practices of produced water management and introduce new rules regarding onsite wastewater processing that are designed to streamline the process even further.[13]

 

Conclusion

Operators across the country cite regulatory uncertainty as a leading reason why they are hesitant to venture into new technologies to reduce/reuse produced water. Regulatory bodies in states like Texas and Pennsylvania have served as pioneers in this field and can serve as models to other states.

 


 

[1] N.Y. State Dep’t of Envtl. Conservation, Supplemental Generic Environmental Impact Statement on the Oil, Gas, and Solution Mining Regulatory Program, 5-73 (Sept. 30, 2009), ftp://ftp.dec.state.ny.us/dmn/download/OGdSGEISFull.pdf.

[2] Consistent with state regulations and industry usage, except where the distinction is consequential, this paper will use the term “produced water” to refer to both flow-back water and produced water.

[3] See Hannah J. Wiseman, Risk and Response in Fracturing Policy, 84 U. Colo. L. Rev. 764, 766 (2013).

[4] Blythe Lyons & John James Tintera, Sustainable Water Management in the Texas Oil and Gas Industry, Atlantic Council (2014).

[5] Tex. Nat. Res. Code § 122.003; see also Carlos Romo, Hydraulic Fracturing, Uncooperative Federalism, and Technological Innovation, https://gwujeel.files.wordpress.com/2014/05/romo_article_jeel_0114.pdf.

[6] Tex. Tax Code §151.355.

[7] Romo, supra note 6, at 7.

[8] Pa. Dep’t of Envtl. Prot., Pennsylvania Hydraulic Fracturing State Review (2010), http://www.shalegas.energy.gov/resources/071311_stronger_pa_hf_review.pdf.

[9] 25 Pa. Code § 95.10(b)(2).

[10] See 25 Pa. Code § 287.621 (enumerating other approved beneficial uses such as substitute for a commercial product, application to roadways, and construction materials).

[11] Romo, supra note 6, at 7.

[12] Id.

[13] See Pa. Dep’t of Envtl. Prot., Final Regulations for Oil and Gas Surface Activities, http://files.dep.state.pa.us/PublicParticipation/Public%20Participation%20Center/PubPartCenterPortalFiles/Environmental%20Quality%20Board/2016/February%203/Fact%20Sheet%20for%20Final%20Ch%2078%20Regulation.pdf.

Alex Brakefield is a third-year law student at The University of Texas School of Law. She graduated Magna Cum Laude from Southern Methodist University in 2014, and will be returning to Dallas after graduation to join the commercial litigation team at Husch Blackwell.