Texas Regulators and Lawmakers Seek to Solve Hydraulic Fracturing’s Water Problem

February 24, 2014
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By Eli Amber – 2L

 

The United States has seen a resurgence in oil and gas activity due to hydraulic fracturing. Hydraulic fracturing involves injecting fluids containing 99.5 percent water together with sand and about .5 percent specialty chemicals into an oil and gas well under high pressure to create fissures to release oil and gas deposits. The method requires a large amount of water to be injected in the well. In the Eagle Ford shale play, for example, drilling requires approximately 5 million gallons of water per well.1

 

The concern over the amount of water being used in hydraulic fracturing is especially acute in Texas, where there has been a surge in oil and gas exploration in various shale plays, such as the Eagle Ford shale play. Total water used in hydraulic fracturing in Texas grew from 36,000 acre-feet in 2008 to 81,500 acre-feet in 2011.2 While water used in oil and gas exploration represented only 1.6% of Texas’ total water use, water use in hydraulic fracturing in some Texas counties accounted for over 20% of the region’s total water use.3 Furthermore, the state of Texas as a whole has been experiencing drought conditions in the past three years. Studies have also indicated that over 50% of the Texas wells analyzed were in high or extremely high water stress regions.4

 

Besides the issue of water scarcity, hydraulic fracturing’s intense water usage imposes other costs. Oil and gas companies must expend resources on transporting and storing water, as well as disposing of the water. The high volume of transportation creates greater emissions of carbon dioxide and increases wear and tear on the roads.5 The large amount of flowback fluids being disposed also increases the risk of groundwater contamination.6

 

In response to such concerns, the Texas Railroad Commission recently adopted new rules to encourage the practice of on-site water recycling.7 The rules became effective on April 15.8The Commission eliminated the need for a recycling permit if operators are recycling fluids on their own leases or transferring fluids to another operator’s lease for recycling.9 The Commission also made clearer the recycling permit application requirements so that applicants can more easily apply for the permit.10

 

The Commission also expanded the two permitting categories into five categories in order to more accurately facilitate the different kinds of recycling practices used in the industry.11Commission Chairman Barry Smitherman has said that the removal of regulatory hurdles will encourage oil and gas operators to recycle.12 The Commission, however, does not currently collect statistics on how much water oil and gas operators actually recycle.13 It will therefore be difficult to determine the effects of the rule change.

 

While the TRC’s regulations sought to facilitate operators’ efforts in recycling produced water from hydraulic fracturing operations, members of the public have called for legislation mandating the use of recycling. Recently, legislation has been proposed to mandate water treatment and recycling efforts. For example, the Texas House of Representatives is considering a bill that would prohibit injecting flowback water into a disposal well unless the fluid cannot be treated and reused in hydraulic fracturing.14

 

However, the bill would require the TRC to adopt costly standards and methods to determine whether produced water may be disposed of in a disposal well. The TRC has said that it would need to track flowback fluid after it is generated until the point at which it has been treated in order to determine whether it can be reused or disposed.15 The TRC estimates that this will require an additional 16,200 inspections to track this data.16

 

The TRC would also need to create a water tracking system to monitor water treatment and disposal. The system would have to allow oil and gas operators to file on a monthly basis not only the volume of flowback water generated from a well, but also how the water is being disposed. The TRC estimates that it will cost $486,720 to develop this system.17

 

Furthermore, in order to implement the inspections and effectively monitor the water usage through the water tracking system, the TRC would require an additional twenty-one employees. Three employees would be required to manage the tracking system at the TRC headquarters, as well as two full-time inspectors at each of the agency’s nine district offices to conduct the inspections. The TRC estimates that this addition of personnel will cost approximately $1.4 million a fiscal year.18

 

Lawmakers in the past have also tried to make the recycling of water from hydraulic fracturing mandatory. For example, Texas House Representative Lon Burnam proposed a bill that would have required oil and gas operators to pay $.01/barrel tax for every barrel of wastewater injected into a disposal well. The bill, however, did not pass.19

 

Lawmakers and regulators are likely to continue to propose various solutions to mitigate the water problem caused by hydraulic fracturing. Perhaps the key to solving the issue is not from government, but from the industry itself, which has the incentive to develop recycling systems in order to eliminate costs associated with intense water usage.

  1. Karen Boman, Legislation Targets Mandates for Water Recycling in Oil, Gas Industry, Rigzone (Apr. 15, 2013),
    http://www.rigzone.com/news/oil_gas/a/125794/Legislation_Targets_Mandates_for_Water_ Recycling_in_Oil_Gas_Industry/?all=HG2#sthash.EhNMxbff.dpuf.
  2. Id.
  3. Karen Boman, Study: Oil, Gas Industry Needs to Step Up Water Management, Rigzone (May 3, 2013), http://www.rigzone.com/news/article.asp?a_id=126236#sthash.bKCuoOIO.dpuf.
  4. Id.
  5. Karen Boman, New System Offers Holistic Approach to Frack Water Treatmentt, Rigzone (May 2, 2013), http://www.rigzone.com/news/article.asp?hpf=1&a_id=126208#sthash.Zb6SN46G.dpuf
  6. Id.
  7. The Railroad Commission of Texas, TRC Adopts New Hydraulic Fracturing Water Reuse Rules, Rigzone (Mar. 26, 2013), http://www.rigzone.com/news/article.asp?a_id=125356#sthash.LE3kI4cX.dpuf.
  8. Id.
  9. Id.
  10. Id.
  11. George Skupski, Texas Railroad Commission Amends Fracturing Fluid Recycling Rules to Encourage Water Conservation, JDSupra (Apr. 5, 2013), http://www.jdsupra.com/legalnews/ texas-railroad-commission-amends-fractur-69948.
  12. Jeannie Keaver, Regulator Eases Rules to Encourage Frac Water Recycling, Fuel Fix (Mar. 27, 2013, 10:24 AM), http://fuelfix.com/blog/2013/03/27/commission-eases-rules-to-encourage-water-recycling.
  13. Id.
  14. Boman, Legislation Targets Mandates for Water Recycling in Oil, Gas Industry.
  15. Id.
  16. Id.
  17. Id.
  18. Id.
  19. Id.

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