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Thursday, May 2, 2013

Report: Half of U.S. shale wells drilled in water-stressed regions

A new report from the non-profit sustainability organization Ceres finds that nearly half of the 25,000 U.S. oil and gas wells that were drilled in 2011-2012 and that employ hydraulic fracturing have been drilled in water-stressed areas.

HydraulicFracturing and Water Stress: Growing Competitive Pressures for Water (registration required) finds that it’s not just in drought-plagued areas like Texas and Colorado:

"Even in wetter regions of the northeast United States, dozens of water permits granted to operators had to be withdrawn last summer due to low levels in environmentally vulnerable headwater streams."

The study says that the use of recycled water – which “can only go so far in solving water sourcing problems since much of the injected water remains in the formation” - and alternative sources of water like acid mine drainage in Pennsylvania is growing, “but “must increase considerably to make a significant impact.” And: 

Given projected sharp increases in (oil and gas) production in the coming years and the potentially intense nature of local water demands, competition and conflicts over water should be a growing concern for companies, policymakers, and investors.

The report calls for  “across the board” measurement and disclosure of sources of water, amounts withdrawn, and the amounts of flowback and produced water that returns to the surface.

The bottom line: shale energy development cannot grow without water, but in order to do so the industry’s water needs and impacts need to be better understood, measured and managed.  A key question investors should be asking is whether water management planning is getting sufficient attention from both industry and regulators.

The Ceres report raises obvious - and increasingly urgent - issues.  But it accepts the status quo and misses another key question – are there alternatives to using water for fracturing shale? Growing costs of and competitive pressures for water, disposal issues, droughts, and climate disruption – which is already altering the global water cycle – plus the contamination risks embodied by spills and leaks of flowback and produced water – argue for a new business calculus in oil and gas exploration and production, and the development of a business case for waterless fracking.

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