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Flowback Water Issues in the Permian Basin

Rock River Minerals | Jul 19, 2019
The Permian Basin in West Texas and New Mexico has rapidly become the largest source of new oil reserves in the United States. Drilling activity in the region is dominated by hydraulic fracturing, or frac’ing, which enables operators to access previously unreachable hydrocarbon resources located in tight shale rock formations. The tremendous upsurge in oil and gas drilling in the Permian has created challenges for operators in the region due to the difficulties they can face acquiring sufficient supplies of water for drilling and in managing the “produced water” generated by the drilling process.

Frac’ing involves injecting large amounts of water, along with proppants such as sand and some chemical additives, into shale rock formations, opening up fractures to release the trapped oil and gas found there. A single frac’d well, on average, can use from 500,000 to 700,000 barrels of water – equal to more than 21 million gallons.

As production continues to expand in the Basin, operators tend to use larger drilling pads to serve multiple wells, as well as extend lateral lengths to improve well yields. These tactics increase the demand for supplying, transferring, storing, and maintaining water at the location of each pad.

Terms to Know

Anyone interested in learning more about frac-related water issues facing operators using the process can benefit from understanding the technical terms used in such operations. These include:
  • Frac’ing – Frac’ing refers to hydraulic fracturing, which is the process of blasting or opening existing naturally occurring fractures in tight shale rock formations to unlock hydrocarbon resources such as oil and gas.
  • Horizontal drilling – Typically used in conjunction with frac’ing, this procedure involves drilling horizontally to provide access to rock formations that traditional vertical drilling cannot productively harvest.
  • SWDs – Saltwater disposal wells (SWDs) are state or federally regulated wells that are typically deep wells of limestone or sandstone reinforced with cement and steel to hold flowback water and produced water from drilling to prevent these fluids from contaminating nearby water and land resources.
  • Flowback water – A type of water that is lower in chlorides and is produced immediately after frac operations.
  • Produced water – Saltwater generated by the drilling process from existing underground reservoirs.
  • Skim oil – Oil harvested at water storage facilities from the water sent to be stored there.

Water Management Issues

The challenges faced by operators in the Permian don’t end with the transportation of water to a well. When a well comes online, there are multiple barrels of water produced for every barrel of oil generated by the well.

The water produced in oil and gas drilling is considered saltwater, given its high salt content and traces of hydrocarbons and other chemical particulates. It is designated a form of hazardous waste that must be safely disposed of or treated for reuse. The water can be transported to holding tanks or to a licensed and approved saltwater disposal (SWD) facility. If no water pipeline exists to move the water, trucks must be used to transport it. These disposal wells typically already contain some naturally occurring saltwater.

Saltwater disposal wells (SWDs) are state or federally regulated and tested annually. They have been in use since the 1930s as a means of containing produced and flowback water to prevent contamination of groundwater or land resources. They are typically located far below the surface soil layer. The Environmental Protection Agency (EPA) has six different categories for SWDs, depending on how they are constructed and how they operate. The six categories are:
  1. Class I: Industrial and municipal waste disposal wells
  2. Class II: Oil and gas related injection wells
  3. Class III: Injection wells for solution mining
  4. Class IV: Shallow hazardous and radioactive injection wells
  5. Class V: Wells for injection of non-hazardous fluids into or above underground sources of drinking water
  6. Class VI: Wells used for geologic sequestration of CO2
At SWDs, skim oil is removed from the water before it is injected into a disposal well, some of which are over a mile deep. This oil can prove to be a significant revenue source for the well operator, along with fees charged to dispose of the saltwater. The Railroad Commission of Texas has established rules that require the SWDs to be constructed with multiple layers of cement and steel to protect the surrounding environment. An increase in well completions in the Permian Basin has strained the capacity of the region’s existing disposal wells, with some reporting close to 100% utilization. 1 Thus, transport costs increase because operators ship produced water to more distant SWDs.

The tremendous demand for water management services in the Permian has led to the formation of companies that specialize in procuring and handling water for drilling and completions in the region. A study by Wood Mackenzie has found that, given that as much as four barrels of water are produced for each barrel of oil in the region, disposal costs could add up to $6 per barrel to an operator’s breakeven cost.

Energy industry consulting firm IHS Markit has estimated that water management spending in the Permian may rise to over $22 billion in only five years, almost doubling from current levels as a result of existing SWD storage capacity filling up. A 2018 study by the consulting firm found that: “Due to a high number of legacy wells and intense levels of ongoing activity, the Permian Basin continues to produce and demand the largest volume of oilfield water among all U.S. onshore regions.” 2

Alternative Water Sources

As drilling in the region has expanded by leaps and bounds and the demand for water to support that growth has kept pace, fresh supplies of water are at a premium. Because of this, land with plentiful water supplies in the region has become increasingly valuable. One alternative to fresh water is the use of brackish water, which has more salinity than freshwater but less than saltwater. The Permian Basin sources brackish water from aquifers such as the Santa Rosa and the Dockum. These resources, however, are also limited, forcing some operators to look further afield for additional water sources. For example, Pioneer Natural Resources purchases effluent water from the local municipality of the city of Odessa.

Another approach taken by operators in the Permian is to treat flowback liquids for recycling and reuse purposes. New developments in technology have aided this effort, as firms focus on improving the environmental impact of water use as well as its economic implications. One approach utilizes both electricity and table salt (rather than chemical additives) to treat flowback water. Some companies use a natural process of humidification and dehumidification for water purification purposes, or to evaporate the fluids entirely so that no disposal of wastewater is necessary.

Treating water for reuse is one of the first solutions considered for adoption in water management processes, given its many benefits. One approach is to purify the water to a clean brine, treating not only the bacteria in the water but also more challenging substances such as iron particulates. Flowback fluids can be treated according to various criteria, whether for reuse in frac’ing operations or for purposes where a higher level of purification is required.

Desalination is another process that can be used to treat produced water. During desalination, the objective is to purify the liquid to close to drinkable quality so that it can be reused in frac’ing procedures or for agricultural purposes. Some oil and gas companies blend recovered water from the drilling completion and flowback process with freshwater to dilute the saltwater content of the reservoir, while others reuse the water with very little treatment, an approach known as “frack on the fly.”

Whatever techniques are used to generate sufficient water to complete a well, the increase in drilling in the region will require significant water infrastructure investment to enable expanded production as new wells reach completion and more disposal wells reach capacity.

Considerations for Landowners

SWD capacity and other water management issues in the Permian Basin are of great importance to owners of mineral and royalty rights in the area, given their potential to impact well profitability. As a result, keeping an eye on the latest water-related developments in the region is recommended for rights owners as well as operators.

Another issue that mineral rights and royalty owners should be aware of relates to the lateral production capability of today’s wells. As operators drill horizontal wells, they typically must get permission from several different landowners to optimize hydraulic fracturing operations. When adding water issues into the equation, the situation can become even more complicated. If an owner’s neighbor strikes a deal with a drilling company, it can potentially impact the value of their resources due to the overlap of resource reservoirs across property lines. Therefore, it can be worthwhile to consult with owners of neighboring properties when necessary to maximize the value of resources underlying adjacent properties.

Given the high value placed on water in the region, landowners can capitalize on water rights as well as rights to hydrocarbon resources. Oil and gas leases often authorize the use of freshwater resources on the property; therefore, owners should be careful that any deal they strike reflects the value of their water as a resource.

It is important to remember that while water recycling is a hot topic for many Permian operators, some companies choose not to be involved with the process to avoid competing with landowners who provide easements for water pipelines or sell the water on their property.

Looking Forward

Due to the devotion of significant resources and brainpower to finding solutions to the water issues that face operators in the Permian Basin, we can expect continued and robust production levels from the play. While mineral rights and royalty owners should be aware of how water availability impacts the value of their rights, ultimately the voracious appetite for oil and gas in the United States – and the world – means that methods are likely to be found to overcome water issues operators in the region face while extracting these valuable hydrocarbon resources.


Have questions about your mineral and royalty rights? Contact us.
1 Society of Petroleum Engineers. (2017, June 1). Permian, Bakken Operators Face Produced Water Challenges. Retrieved from https://www.spe.org/en/print-article/?art=2982

2 HIS Markit. (2018, December 18). Water market for upstream oil and gas operations in the United States worth an estimated $33.6 billion in 2018. Retrieved from https://www.spe.org/en/print-article/?art=2982

3 Drilling Contractor. (2016, January 26). Pioneer Natural Resources partners with Odessa to manage water use. Retrieved from http://www.drillingcontractor.org/pioneer-partners-with-city-of-odessa-on-infrastructure-project-to-save-millions-of-gallons-of-freshwater-38200

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Rock River Minerals - What is Frac’ing?

Rock River Minerals - What is Frac’ing?

By Hibu Websites • 13 May, 2019
Hydraulic fracturing, commonly called frac’ing, is a completion technique in oil and gas operations that uses a high-pressure mixture of water, sand and chemical additives to unlock hydrocarbon resources such as oil and gas. The frac’ing process is mainly used in shale formations, where tight underground rock structures make traditional methods of producing oil and gas uneconomic. Frac’ing can be defined as a well stimulation process designed to maximize underground resource extraction. The process typically includes drilling a particular formation, casing the formation, completion or stimulating the well using water from the surface, producing the well, and disposing of waste from its operation. It is commonly used in conjunction with horizontal drilling to reach energy deposits that could not be accessed via traditional vertical drilling methods.
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