Various camps that are unfriendly to oil and gas are making water their point of contention.
Water. It is a hot topic in Texas now, with drought concerns and high demands coming from many directions. Although hydraulic fracturing accounts for less than 2 percent of statewide water use, hydraulic fracturing and the economic prosperity of the oil and gas industry are in the crosshairs of state politics. There have been over 100 bills filed this legislative session dealing with water in different aspects.
HB 4 would create an implementation fund for projects in the Texas Water Plan. It was passed by the Senate. However, its companion HB 11 was an attempt to fund the 50-year plan for more reservoirs and pipelines to deliver water to the population of Texas. It died on the House floor because of an unusual alliance between Democrats and Tea Party Republicans to stop using $2 billion from the state’s rainy-day fund, which is projected to reach $11.8 billion over the next two years. This bill is likely to be brought up again before the session is over.
There are several bills that target permitting of water wells used for oil and gas. Currently, water wells to supply water for drilling or oil and gas exploration are exempt from permitting requirements from groundwater conservation districts. SB 873, sponsored by Senator Hegar, would remove that exemption for the use for hydraulic fracturing treatment or other activities related to the production of oil or gas from a completed oil or gas well. Permian Basin Petroleum Association prefers a similar HB 3317, sponsored by Representative Keffer. It requires operators to register with the ground water conservation district, report how much is used, and abide by all other rules and regulations. There are several attempts being made to single out the oil and gas industry with punitive restrictions, fees, and regulations. The Permian Basin Petroleum Association is focused on making sure the oil and gas industry is treated the same as all other industries and users.
There are numerous bills related to the use of brackish water and the reuse of produced water, as well as the practice of desalination and the recycling of flow-back water. Many of the bills make these requirements mandatory while the Permian Basin Petroleum Association is promoting incentives to encourage the use of these techniques and technologies. While the industry is working very hard to find alternatives to using fresh water for hydraulic fracturing, the technology is new and untested on the large scale required. There is no one-size-fits-all. Water chemistry of mixing hydraulic fracturing fluids and formation waters is very complex. The wrong choice can result in permanently damaged reservoirs with significant loss of oil and gas reserves and significant economic waste. Mandatory requirements and regulations at this early phase would be a real mistake.
The Railroad Commission recently adopted new recycling rules that significantly enhance the ability to recycle hydraulic fracturing flow-back water. The major changes eliminate the need for a Commission recycling permit if operators are recycling fluid on their own leases or transferring their fluids to another operator’s lease for recycling. The key provisions enable on-site, permit-free storage of fluids awaiting recycling, subject to various requirements of pit construction, use, maintenance and operation. Prior to these changes, recycling was tangled in regulatory permit requirements that made recycling difficult, costly, and time consuming to implement. These rules will assist in using the best technology in a logical and responsible way.
The Permian Basin Petroleum Association has formed a water committee to analyze operational water issues. The committee includes PBPA members, the RRC, the TCEQ, and CRMWD. Water is going to be a key issue for our industry, West Texas, and our state as a whole. The PBPA is engaged at several levels in the water issues to represent our industry for the future.