Water’s Place in the Big Scheme of Permian Things

by Jesse Mullins

MIDLAND, TEXAS—After a two-year hiatus, due to Covid, the Permian Basin Water in Energy Conference, said by some to be the best conference of its kind anywhere, returned to the Horseshoe Arena in this oil town and picked up right where it left off. Or maybe it picked up just a notch above where it left off. Because it seemed as if everyone here was primed and ready and the conversations were strong from start to finish.

It didn’t hurt that WTI crude cracked the $100 mark, setting in fact a multi-year high, while the show was going on.

It didn’t hurt that the nation’s eyes were on its handcuffed oil industry, with a White House Administration in Washington, D.C., having to deflect direct questions and summon unsatisfactory answers for why it had stopped the Keystone Pipeline and why it was hampering domestic oil efforts.

It didn’t hurt that Covid is all but AWOL and the Midland-Odessa area is, this year at least, one of the most active and vibrant metro areas to be found anywhere.

 

While it might be too much to say that the swagger is back, it’s not too much to say that there was a definite energy in the proceedings and some of the talk showed that the folks at this event know that their trajectory, and this industry’s trajectory, is going up.

This show has matured in one sense in particular, and that is that its speakers seem to speak with more authority with each new iteration of the conference. The niche itself carries more weight with each new year. And one could hardly fail to notice that the presenters touched upon a great many market factors that are beyond what might be thought of as strictly water-focused. A visitor here could learn a good deal about drilling, for one thing. Or about well completions. That’s because there is so much inter-connectedness in the 2020s Permian Basin, and what impacts one area impacts another.

One other unofficial “theme” that found expression during the proceedings was the idea of collaboration within the field of water use, reuse, and disposal. It has become increasingly evident that water is a niche where collaboration is not just observable, but downright indispensible. Unavoidable.

But that was brought out almost from the start, as the second session of the first day found Austin Beam of ConocoPhillips discussing “New Opportunities for Handling Produced Water,” wherein he said, “We’re all in this together, and continued, effective collaboration is critical.”

Beam, who is manager of Permian Water and Low Carbon Integration at ConocoPhillips, also stressed that “It is certainly important to mention our key relationships with strategic partners and industry peers who face similar challenges, and without whom we would not be able to manage our water today, nor in the future.”

Sessions during the event covered the waterfront, where water is concerned. There were speakers or panels on the subjects of water on state or private lands; water sourcing; commercial use of water; reservoir dynamics; waste waters and waste carbon; ESG; climate change; alternative uses for produced water; off-field reuse of treated produced water; implications of operator liability; comparative land use (of gas, nuclear, wind, and solar power generation); seismicity; strategies of water reuse; and much more.

ESG (Environment, Social, and Governance considerations) was, as a topic, clearly a bigger matter than it was before the show’s two-year hiatus. Some sense of its new prominence can be seen in these remarks from Tracee Bentley, CEO of Permian Strategic Partnership, an organization which claims as members some of the biggest oil companies in the Permian:

“There’s zero doubt that the CEOs of my companies are discussing ESG in their boardrooms continuously,” said Bentley. “Both the E,S, and the G. Everything. I moved three years ago from Colorado to West Texas, and [in Colorado] I worked heading a group that worked under the then-governor who passed the first methane rule in the country. Let me tell you, that was quite an experience. The underlying current of the conversation was, ‘We’ve got to force this industry to be innovative. We’ve got to force them to want to capture basically money going up in the air.’ We kept trying to tell him, ‘You will not find an industry who is better at innovating than the energy industry. Trust us.’ We have a lot of incentive to innovate. We’re doing it every day. Furthermore, when it comes to capturing at the well head, of course we want to do that. One, it’s better for the environment, and two, that’s our dollars going up in the air.”

She added: “Coming down here it’s interesting when I see now this industry at a bigger scale. All of the things that we are doing on a day-to-day basis under the “E” that we’ve been talking about today, well, there’s no other region in the world that is more secure, that’s as vast as we are, and that harvests energy in a more efficient manner. There just isn’t.”

Another positive note was struck in the following remark that was heard during one of the Reuse panels: (Apologies for not being able to identify the speaker of these words that were taped.)“On the reuse perspective, we’re well aware of the fact that the data can be difficult to decipher, difficult to access. We’ve done a few things to try to understand, better, what are the trends in water reuse and recycling. One of the things we actually did is we went through all the corporate sustainability reports for all the operators that operated on a Permian Basin [acreage] that actually published corporate sustainability reports and compiled that data. And in general, one can see that for these large operators, operators that kind of work in the public space that do publish these reports, we see an increasing trend in the amount of water that is being recycled. No doubt these companies want to tout this increase in water management / water recycling performance from an ESG perspective, but it does point to the fact that there is more desire or activity to recycle or reuse water in the oil field space.”

In a break between sessions, Conference chairman Jim Woodcock told PB Oil and Gas Magazine that attendees seemed excited and interested. “We have a wonderful audience—much larger than I thought we’d have due to Covid,” Woodcock said. “The place is packed. I think people are happy to be out—glad to see what’s happening.

“I think they’re interested in our water supply,” he added. “They’re certainly interested in how we’re going to manage these huge volumes of water that we bring up with the oil. When you stop to think that we bring four to six barrels, sometimes more, of water up with every barrel of oil, well, that a huge amount.”

Woodcock said he felt that challenges certainly exist. “We don’t have all the answers. We have some speakers who can address almost all the answers. Five years ago when we had our first conference, who would’ve thought one of our biggest challenges now would be seismicity fault lines? Who would’ve thought another challenge would be where we have large volumes of water flows meeting large volumes of CO2 floods? And so, we have interesting different challenges that we’ve brought speakers in to address. Again, we don’t have the answers, but our hopes are, we bring the right people together. Perhaps we’ll find some way to navigate through some of these issues.”

Attendee Fredrik Klaveness was on hand for both full days of sessions and he described the event as “extremely well run” and “a great venue.”

Klaveness, who is CEO and co-founder of NLB Water LLC, said he was meeting people at the event. “And I have several appointments I’ve set up for the following week, next week, after this conference is completed. This event is the perfect place for us to be more visible and meet competitors and potential clients. It’s also great for learning about recent developments, and for introducing new technologies.”

On that note, Klaveness said that NLB Water LLC (nlbh2o.com) has developed “a unique membrane-based produced water treatment and recycling technology” that they are “about to commercialize and make use of in the market. We have raised substantial funding to develop the technology. It’s certainly taken longer than expected because of Covid and other issues, but we have now a fully developed, full size unit ready to go.”

NLB Water LLC is based in Denver and they have a shop in Midland.

Another attendee who was taking in the whole affair was Steve Garber, regional sales manager for ISCO Industries. His company sells, rents, and fabricates fusion equipment for high density polyethylene (HDPE) pipe and fittings.

Garber said ISCO is a vendor and supplier to many of the companies who were represented at the conference. “I find the event to be very educational and informative and there’s a lot of influential people who come here,” Garber said. “You always look to be in the same place where those influential decision makers are. And that’s here.”

He shared these words at the Petroleum Club dinner on Feb. 25^th where Railroad Commissioner Christi Craddick gave the evening keynote address to the PBWIEC attendees.

Craddick’s message, meanwhile, came to its conclusion with these words:

“Texas’ ability and willingness and to meet our state’s, country’s, and even world demand can’t be overstated. We have a history of frankly exceeding expectations when it comes to energy production, innovation and, frankly, good old-fashioned hard work. The Railroad Commission is poised to continue to provide regulatory certainty—we need it even more now—and we’ll do everything in our power to keep this energy industry vibrant,

especially as we rebound from Covid.

“It’s finally time for everyone to go back to work. Texas energy is critical. Not just not just for the operation of businesses in Texas, but also for the U.S., and the global economy.”

The following day, the 26^th, brought a lineup of sessions that was the equal of the first day’s, and the crowd showed little drop-off.

Jonna Smoot, who formerly served as co-chair of this conference, and who this year was at the event as an attendee, volunteered a thought in the final hours of the event. “I’m here in Year 4 of this event and I just want to say, as someone who put this together for three years, that this looks great,” Smoot said. “They’ve had a wonderful turnout. I see bankers, I see energy operators, I see a lot of variety of people here, everybody’s interested.”

Let’s end with the words of Austin Beam of ConocoPhillips, who kicked the whole thing off.

“Continued work in this space is incredibly important,” said Beam, who had keyed his talk around various “enablers” that can conceivably help the Permian Basin to meet its large challenges in water use and reuse. “And at this point you’d probably be disappointed in me if I didn’t mention the last enabler, which is collaboration. I’m really excited for what 2022 has in store for us in this space. The energy around water in the Permian is at an all-time high. And as we come together in support of shared objectives, I know we will continue to make notable progress.”