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Wednesday, November 13, 2013

Wood Mackenzie: fracking faces global water risks

A new study by the global energy, mining, and metals consulting giant Wood Mackenzie finds that many of the countries with the greatest promise for developing shale oil and gas suffer from water shortages.  That is a troubling reality for an industry that relies on a technology that requires millions of gallons of water to develop each well it drills.

Troubled waters ahead? Rising water risks on the global energy industry (abridged) finds that more than 60 percent of shale reserves are in countries with medium to high levels of water stress, such as China, Australia, and South Africa. That fact – coupled with United Nations estimates that fresh water supplies may fall as much as 40 percent below overall global demand by 2030 - will increase the conflicts over water use for human consumption, agriculture, mining, energy development and generation. That will result in more limits on access to water sources, rising costs, tighter regulations, and possible litigation, Wood Mackenzie said.

The growing – if not ominous – competition for water also looms larger here in the US. Ceres has found that half of the unconventional oil and gas wells drilled in the US in 2011-2012 were drilled in water-stressed areas.

Recycling of water, use of brines or other nonpotable water sources like acid mine drainage in PA can help to ease water conflicts.  But they will not come close to eliminating them. Can the oil and gas industry afford these risks?  Can they afford to be shut out of new development opportunities? Can they afford not to drive to waterless fracking?  The business case for moving urgently in that direction grows clearer by the day. 

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