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5

th Annual Shale Play Water Management 2014 – Southern States (DCN SGE01046)

Recycling Cost Reduction – Panel Discussion

Competing interests (drillers, completion, operators) – how to get them together to do what’s best for 

the company.

Kerry Harpole, Marathon Oil, Eagle Ford Challenges: the amount of water that comes back. Collecting 

the many sources of water to recover is a challenge. Management of ponds – certain materials added to 

ponds will make it a waste eventhough the water has been treated.

Don Pence, EXCO Resources: Eagle Ford, Marcellus, Hazel. Eagle Ford is most challenging. Drilling 8-15 

wells. Complete wells behind the drilling rigs. 8-15 wells flowing back for 15-20 days – need to find a 

place to store. How to move all this water 7 miles to where they need it within 5 weeks. And then may 

not need any more water for quite awhile. Satisfying the needs of the drillers and also the completions.

Douglas Park, Cimarex Energy, Challenges: Tremendous growth of the company and how to keep their 

arms around that. Not all companies have proper water departments and assigned assets – mixed bag. 

Often production staff are reassigned to be “water” people. Water has been a high priority. Recently 

looking at price of oil and impact on long term planning. Anticipate a huge shortfall in water in the near 

future. Need to figure out how to recycle to the extent needed. Need to convince management on what 

to do, level of funding, etc. Permian has biggest challenge for water sourcing. Important to find the level 

of treatment needed for reuse and to stop there. Each formation has different water quality needs. Also 

frac design is important. Problem when changing both frac design and water at the same time.

Daniel Smith, Apache Corp: challenges are cost and logistics. Logistical challenges going into operational 

field. What sources are available? Can you drill for fresh water? How much water will be produced? How 

to store the water? Recycle/reuse will be most important where water is scarce.

Dennis, Water Solutions: How clean is clean? Are there definitive criteria on quality needed for reuse? If 

yes, what?

Kerry: crosslink, gel based. Sensitive to boron. Not a salt issue. Frac companies drive quality. What do 

they want versus what do they have to have? Not the same thing. Marathon is doing pilot. Hard to 

know/predict what will be a problem. Use water up to 25-30k TDS and also boron levels. Magnesium 

thresholds as well. Chemicals can fix to certain extent, but cost.

Don, Boron, magnesium, calcium – preventing crosslinking. Making slickwater work fine. In Marcellus, 

can reuse almost anything. Depends on what the completion folks want to see. Cost balance to recycle 

the water versus completion folks need. Real challenge to recycle all water versus recycling a slip 

stream.

Doug: what kind of fracking? Are you crosslinking? When slickwater, works great. Need to get the “crud” 

out and also kill the bugs so that the water that is return is usable (TSS, microbes).
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Daniel: Clean is clean enough when minimize cost, performs as designed, and good production. Don’t 

know the answer yet. Completion engineers are always changing stuff. No two frack jobs are the same, 

no two wells are the same. Many things at play and no true comparison. Would love to have a huge 

database of all the variables and impacts on water – what hurts, what has no impact, what helps. 

Calcium is bad actor when trying to hydrate gels. Worst case is everything is good to go, but the 

available water can’t be used. Prevent by doing tests on the water. Also understand the “rock” and 

design the completion and determine the needed corresponding water. Boron is an issue with the 

Bakken. Texas panhandle is all slick water – pretty simple, just get the bacteria out and TSS. Presentation 

later will present some guidelines.

Bob, Hydroflow Technologies: manufacture treatment equipment. Don’t know the quality needed for 

what trying to do from day to day and from place to place. How to have a system designed and built that 

can handle all these issues and not cost a fortune? 

Daniel: by the time build treatment, the project is over. The trmt equipment needs to be mobile. Large 

infrastructure intensive, long term solutions will be rare. Oil prices and activities fluctuate. Geology 

dictates where they are going to move. Won’t see too much variation in the treatment goal – often 

more of an issue is the variation in the water being generated.

Terry: will never find the silver bullet. In a play, can generally say what quality is needed. Perhaps 

tweeking from company to company and location to location. Modular systems are important. Yield of 

treatment is also important – can’t get a tablespoon of treated water and a barrel of waste. Can’t have 8 

guys out there operating a system. Need controls to automate, but a challenge as great variability in the 

water.

WW pipeline company. Love to build pipeline, but disposal challenges. Also trouble getting right of way. 

Don: some inplace lines. Landowners are fine with bringing in water, but can’t cross the fenceline.

Permian play with stacked play. Anticipate drilling 30-50 years, so can have a longer term solution. Do 

put in some infrastructure for pipeline, etc. Right of way is a challenge. Want to spend money on drilling 

where immediately get money back, versus spending money on infrastructure which is a cost with no 

return.
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1. Water Program Execution

Stephen Lindsey, Quicksilver Resources: Expectation Management for Water Use in Oil and Gas

Regional, US, and global issue.

No doubt that the technical solutions will be found. How fast will the industry be pushed to implement 

the solution? Concerns that municipalities will raise water prices to prohibit fresh water use. References 

to Denton.

Texas has 3 stage agencies with jurisdiction over water issues:

-Texas Water Development Board (TWDB)

-Texas Commission on Environmental Quality (TCEQ)

-Texas Parks and Wildlife

Need to make contacts with these folks.

Drought and concerns about water use. In terms of % water use, industry is small (e.g., compared to 

irrigation and municipal), but perceived as wasteful as not returned to the environment but disposed.

Need to understand how the regulators and policy makers understand the industry’s water 

management.

Example of master long-term planning for a large production complex. 250 wells on 45 pads. Centralized 

compression station, pipelines, etc. Virtually eliminated trucks. Saved a lot of money taking this 

approach.

See slide on Water Lifecycle.

Stakeholder process is key. Expect new mandates for water management. Understand and be active 

working with the stakeholders.

Reg Considerations: one size does not fit all. Carve outs for regions. Primacy between City, County, and 

State. Balancing water mgmt without hurting job creation, tax revenue, econ input from industry, econ 

stabilization fund. Water by law is an owned property rights asset. Massive migration of new residents 

to TX.

Technology is getting there. Laws have yet to begin mandating. Demand for more restrictive uses will 

pressure law makers/regulators to act. State and local laws will lead the way in mandating water 

conservation and re-use measures. Feds to follow. Also, service companies and consultants lobbying to 

support laws mandating increased recycling.
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Texas is part time legislature that meets in odd years for three months. This cycle, focus to strip out local 

control from municipalities. Draft legislation is out there. Unintended consequence would be limits 

cutting back on other areas of local control from municipalities. This is taking the heat off on water.

Brackish water use in Permian. Anything to minimize water footprint. Use whatever you can. Effluent 

from municipality is used at one Quicksilver site. Permian and Eagle Ford have initiatives in how to move 

and store water.
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2. Minimum Treatment Levels Required

Daniel Smith, Completions Engineer, Apache Corp

Wheeler County, TX example

Rarely works for one-off. Need economies of scale. The larger the project, the better the economics.

Transportation logistics can make or break a play. If need to put on a truck, won’t work.

Completions: Active frac program with 85k to 185k Bbls/well

Availability 15k Bbls/day

Pipelines from wells to central tank batteries and then to the central treatment system.

Processing capacity: 240,000 bbls

Trmt: 250-400 gpm

Basic Frac Water Criterion: Water must be compatible with completion fluid design. Water must not be 

damaging to well production (IP & EUR).

See slide with Wheeler Co Produced Water Chemistry versus rough guideline for upper limit. Averages 

presented, but highly variable. Simple treatment design: iron and iron sulfide, suspended solids, 

bacteria, mitigate scale potential.

Slickwater and no crossing fracs, so boron is not an issue. Barium can be a scaling concern, but not at 

higher enough concentration to concern, and other ways to manage.

Batch Treatment in Processing (Weir) Tanks:

Treat 20-30k bbls at a time in a tank. Various treatment options utilized. Waste generation skimmed off, 

or settled to bottom. Relatively low cost at $0.15-$0.40/bbl. Operationally challenging with mixed 

results.

Utilizing automation to generate ClO2 for produced water treatment:

-5 nines reduction bacteria (really full bacteria kill), 88% oil and grease (ClO2 breaks up), 70% iron, 55% 

TSS. Started with manned unit, but too expensive. Now the system is automated. ClO2 has a coag effect 

in the presence of iron. Scum in the weir tank is crude, compressor oil, iron solids. Frothy muck – at the 

moment sending to disposal.

Look at reducing ClO2 demand. Added centrifuge as pretreatment, but not good results. Removed the 

same solids that were previously removed in weir tank. Would not remove particles <6 microns. Begs 

question: are particles <6 microns impacting the frac? Don’t know. If silica dust, then likely not. If clay, 

then possibly yet. 
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Tried adding chemical precipitation and clarification, again to reduce ClO2 load. Sometimes too much 

hydrocarbon to clarifier, which made a mess, which was a challenge. Very good results, but takes skill. 5 

nines bacteria, 99% O&G/Iron, 92% TSS. Somewhat steep learning curve to operate, but eventually got 

good at it. Effluent looks very clear. Is the additional expense providing any value?

Costs:

Weir: $0.2-1/bbl

Centrifuge: $0.25-1.25/bbl

Clarifier: $0.75-1.75/bbl

Chlorides, barium and sulfates, boron not removed by any alternative.

What treatment is needed?

-Production comparisons are difficult due to large number of variables. More data is needed.

Slickwater vs gels: After clarifier has stable gel. After ClO2 has stable FR. Raw water is unusable.

Tested crosslinked viscosities. Clarifier water is similar to tap water.

ClO2+clarification (weir tanks) adequate water quality for slickwater/linear jobs.

Friction reduction and gel hydration increased with water quality.

Borate XL jobs require further water treatment.

Treated water compatible with low PH and cellulose type XL.

Bacteria growth in storage tanks is challenging in warm months. Can kill bacteria, but returns within 2 

weeks. Solution: treat bacteria for the frac, with an on the fly system providing an economic high log kill.

Using UV and also adding some biocide. Need high enough flow to make the capital cost of the 

equipment effective.

Tried to prepare a mobile treatment option, but cost was prohibitive for centralized treatment of 

multiple smaller dispersed fracs. Cost was 3-5 times the cost of fresh water.

Lost cost acquisition and disposal of water makes the cost of treatment prohibitive.

Questions:

Challenges of unmanning the process. Always had Pioneer staff onsite, but no operators from the 

service company. Only a problem when something went wrong. System was then down until service 

provider could come.
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Why not look at filtration? Particle distribution demonstrated small particles which are harder to 

remove. 10 micron filter did nothing. Small cartridge filters plugged immediately. Didn’t want to spend 

the time looking further.
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Panel Discussion: Filtration vs. Oxidizing Chemicals

Laura Capper, HALL Petroleum

Slide of water/oil ration (bbl/bbl). US is in 3rd place behind Oman and Bahrain. All others less water.

Just a few years ago, chloride threshold was 20K ppm, but now 200k ppm. Allows more opportunities for 

reuse.

Majority of the flowback coming from the newer, “hotter” plays, but still quite a bit of water from other 

operations.

On the other hand, regarding produced water, much more water is coming from conventional sources 

(except Permian).

Eagle Ford – relatively small amounts flow back, and not economical to reuse.

Slide on Water Treatment is interesting. Shows projected growth and change.

Jason Boyd, QEP Resources

Believes both filtration and oxidizing are important and useful. Don’t know exactly how much solids 

removals is needed, but think some is needed to avoid clogging.

Oxidation is viable, but uncertainly in constituents going into and out of solution, versus filtration where 

solids are removed.

Bob Mitchell, Bosque Systems

If oxidizing, will want to follow up with filtration to remove from the water and keep it from later coming 

out of solution.

Mark Patton, Hydrozonix

Filtration and oxidation are complementary. Need to know what is good enough for TSS removal.

Laura’s data sources? In 2008 folks were panicing about what to do with water, especially in Marcellus. 

Developed a database of anecdotal information from operators. Now more difficult to assemble the 

information as more difficult to obtain.

TSS removal: Need to consider cost and availability of fresh water versus treatment. Everything comes 

down to economics but sometimes on availability of water.

What are lowest cost methods? For easy application like slickwater, the minimum issues are TSS, 

disinfection, scale inhibition. On occasion, bag filters may be enough, but if need to remove iron, then 

need more complex solution. QEP: don’t know lowest cost method – need to consider a variety of 

solutions to select the best.
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What would make operators recycle more? Greater taxes? Greater regulation will put small play 

operation out of business. Desire to reuse, but many limiting factors other than cost, so that’s not the 

solution. Great potential for wrong regulation. Need a more collaborative effort. 

Reducing liability would help increase recycling. Liability of above ground storage is an issue (didn’t 

catch where) that is hindering recycling.

Call to incentivize reuse rather than to force.

Oxidizing chemicals: ClO2 and ozone. Any issues on corrosion? Corrosivity of ClO2 depends on the 

generation method. Some methods generate free chlorine. Jason Boyd – issues in the past with over 

treating with ClO2, which destabilized the frac. Two important issues: corrosivity and compatibility. 

When too focused on oxidation and bacteria kill, overtreat which creates a residual that can affect 

compatibility.

Measurement on the fly for dosing? Mark Patton exploring boron methods. ATP realtime bacteria test. 

Concern about inaccuracies in testing of produced water. If testing using an inaccurate method, and lead 

to inadequate or over treatment.

Hybid fracs and gel fracs: if use minimally treated water, how much dilution with fresh is needed? 

Dilution is the solution for many constituents.
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Spoke with the Chair, Michael Dunkel, Pioneer Natural Resources during the break.

Anticipates a huge increase in recycling over the next few years. Believes that industry is currently 

disposing about as much wastewater as they can. Disposal can’t sustain continued growth in the 

industry, which will push toward reuse.

Also anticipate large increases in the coming years for E&P putting in centralized treatment for their 

wells. Possible they will look to a 3rd party to provide this treatment. Also possible that they will accept 

other firms’ wastewater for treatment.

I asked who I should talk to to learn who the CTWs are that are accepting O&G wastewater. He said 

there really aren’t any, especially in TX where disposal wells. Mentioned Fountain Quail in Dallas area 

(Eagle Ford), but believes they are no longer in operation. Also mentioned NOV (National Oilwell Varko).

He anticipates a day in the future when the volume of water generated will exceed the volume of water 

than can be recycled. When that happens, he anticipates a need for CWTs to take, treat, and discharge 

the wastewater, and therefore he thinks that option needs to be available.
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3.Treatment Technologies: Case Study

Robert Mitchell, Bosque Systems

Need a company with a toolbox of technologies.

Things have changed – paradigm shift – in water quality needed for fracking. Better technologies allow 

higher salinity waters. What do you want versus what can you use.

Sulfates are a problem for several reasons. First as food for microbes in the well. Second can bind with 

boron and calcium to make essentially concrete. 

Slides of gel frac versus slickwater frac. 

Have seen two different companies working in the same region with one using fresh and one using 

produced. Why? Slickwater frac formations require less stringent treatment. Why ever using fresh water 

for slickwater fracking?

Pressure Pumping Company – the largest cost on a frac job. 7 years ago no one using 200,000 TDS frac 

practices. Now, all the big companies can do it. Need to challenge them to get it to work.

TSS can greatly improve TDS. For example, if oxidize iron, will move from dissolved to particulate for 

removal.

Particle size distribution. Just because TSS in the water doesn’t mean it can be easily removed. Need to 

know the distribution to target treatment. Can’t just throw a technology at the water without 

understanding this.

How much TSS are you willing to put down your well? Data from 6 companies range from 50 ppm to 600 

ppm. Putting a lot of solids down a well can’t be good. TSS has two parts: removing the TSS and 

disposing the TSS.

Treatment for: salinity, iron, calcium (scaling as sulfate scale), barium (scaling as sulfate scales), sulfates, 

H2S, biological organisms.

Ultimately the problem is not the water treatment but moving it around (logistics).

Bosque Systems helps recycle 1 million barrels of water a day and growing.

Discussion:

Recent Rice study on toxicity of produced water. Concern about halo organics. All ClO2 generation 

systems are not the same, and some in fact have toxic constituents.

Yes, cost driven but a very competitive market. Recommend that pit the companies against each other. 

But sometimes you get what you pay for. Will do treatment studies for free.
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4.Chloride Removal

Laura Capper, HALL Petroleum

(Note: this presentation was useful, but not really about chloride removal)

Try to track trends in the market.

Interesting chart of TDS across the US. Chart is old because doesn’t show Marcellus, but still useful.

Data taken from truck after truck show that TDS levels are increasing over time. When add extreme 

reuse, will see this increase. In Marcellus, they’ve seen 20 to 40k increases in TDS.

Was supposed to talk about desalination, but not many are doing it. Originally the purpose was to 

generate a high quality water for discharge or reuse, but this is no longer a need. Now these facilities are 

focusing on producing a variety of clean brines.

Laura believes that rigorous pretreatment is required for desalination. Otherwise downstream 

desalination is fouled.

Plays in the Rockies have low TDS, so RO is common treatment there.

Low TDS drives up power costs for electro-coagulation.

Caution about treatment costs presented as they likely do not include all costs (storage, waste disposal, 

etc).
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5.Produced Water Treatment Technologies, Chlorine Dioxide

Brian Wrenn, Pureline

Characteristics of concern for reuse and disposal: dissolved solids, suspended solids (including bacteria), 

scale formation, iron/manganese, pH

When ClO2 is added to wastewater, it oxidizes iron (also sulfide). Iron will then precipitate onto anything 

that happens to be in the vicinity (i.e., colloidal particles). In flocculation, provide gentle mixing 

conditions that cause the colloidal particles to collide. The particles grow larger and then settle by 

gravity under low mixing energy.

Coagulation stage with high mixing energy

Flocculation stage with gentle mixing energy

Settling/Sedimentation with quiescent conditions

Can be achieved in one treatment unit with multiple sections. Typical tank size 50’x14’x10’. In the field, 

typically a bank of tanks.

The higher the iron content, the higher the ClO2 demand.

Slide showing TX wastewater and varying ClO2 dosages. Looks like you need a dosage of >200mg/L for 

TX wastewater. Lower demand for other wastewaters.

Good slide of conclusions.

ClO2 needs 5 mg/L iron to be effective as a coagulant.

ClO2 will oxidize iron, sulfides (in any form), and kill any bacteria that are present.

Try to maintain 2 mg/L ClO2 residual in flocculation. Would like 3 hours settling.

Can modify process to also remove scale species.

What about VOCs and BTEX? No effect. VOCs may be driven off during mixing.
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Spoke with Mark Patton, Hydrozonix during the break.

His firm will be a subcontractor to a firm opening a centralized waste treater in Bills Wyoming 

(Greenlands?). All the water will be treated for reuse, so treatment will not be to the quality needed for 

discharge. Grasslands just accepted their first wastewater loads.

He talked about PA, which is ahead of others regarding treatment and reuse, and moving toward 

centralized treatment. Wyoming moving toward centralized treatment. Anticipates that TX will 

eventually move to centralized treatment, but still a bit premature as the drillers are still moving around.

I asked about centralized wastewater treatment for discharge directly or indirectly. He said the current 

objective is lesser treatment for reuse. But he anticipates and eventual need for treatment for discharge 

when the industry gets to the point will drilling slows and there is not enough capacity for reuse. I asked 

when this might occur, and he said perhaps in 10 years. Or sooner if the Saudis continue to keep oil 

prices very low...
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6.Bacteria Control

Mark Patton, Hydrozonix

Real-time testing of water quality is very important. Test for bacteria via modified ATP (Adenosine 

Triphosphate). Also test with MPN and bug bottles.

When testing for bacteria, need to use sterilized bottles and gloves. Also need preservatives to consume 

residual disinfection for accurate readings.

Discussed variability in test methods for ClO2 residuals – colorimetry, test strips from different 

companies. Found that test strips not very effective in testing produced water, and that colorimetry is 

most accurate.

Where to sample and test for bacteria? Source water, inf/eff, working tanks. Problem with regrowth in 

working tanks.

Sometimes disinfection is in direct competition with compatibility. The solution is control of the process 

and adequate testing/monitoring. Disinfection residuals will consume downwell chemical additives, 

which is a waste of money.

Hydrozonix using ozone to avoid the residual problems.

Use ORP? Yes, use 6 ORP monitors to monitor and control oxidation treatment. Problem is that the 

meters foul easily. Often use pairs of probes and average. Also use hand helds. Found differences in 

different probes.
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7.Plasma Treatment

Young Cho, Professor, Drexel University

Plasma is ionized gas. Introducing to liquid is difficult.

Use two electrodes, apply 10,000 volts, creates literally lightning in a bottle. Lightning generates: UV 

radiation, reactive species – strong oxidizers (O, OH, H2O2), Acidity (H+ and NOx), cavitation, electric 

field, shock wave, high temp (>2,000k)

Goals: disinfection, softening, SS removal, de-oiling, dissolved gas removal (light hydrocarbon), 

desalination

Disinfection – 4log reduction with 10-minute treatment. 2log reduction for 3 minute treatment.

Cost for Shale oil treatment (dark) at $0.02/bbl for energy for disinfection.

Cost for Marcellus is 20 times less energy.

Also tested treatments for filter self-cleaning and for softening. Cannot remove calcium, but does 

remove bicarbonate. At high temperature, dissociates bicarbonate. Also dissociates sulfate. Plasma 

softening removes bicarbonate (and sulfate) ions to prevent mineral fouling without generating sludge.

Small scale testing at 5 gpm and 30 gpm. Currently developing skids for 100 gpm and 500 gpm.

Also working on desalination treatment using the plasma reactor and vapor recompression.

Computer died – no more notes today!
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Alternative Water Sources – Panel Discussion

What is highest volume source of alternative water?

Don Pence, EXCO Resources: Not close to any rivers. Through 6 mo negotiations, worked with 

International Paper to deliver a 23 miles system to deliver real time (no storage) 160k bbl/min. 24” line. 

Paper plant uses 250k bbl/day. Water has zero oxygen and no bacteria. Worked with LDEQ. 200 million 

barrels over 10 year period. Wells treated with paper water tend not to scale.

Kerry Harpole, Marathon Oil, Eagle Ford: mix of brackish waters. 80-85% of fracking uses this water. 

Some municipal water, but cities are not very large, so only small amounts of water collected when need 

large amounts at on time. So far no impact, but as TDS gets higher, it does get harder to gel.

Sam Bacon, Rosewood Resources: not using much alternative water right now. Doing vertical wells, 

which don’t require as much water. Plan for 20% minimum or recycling or alternative water; sometimes 

achieve and sometimes not.

What is the most difficult source of water to use, across the industry?

Sam: surface water is the most difficult source to obtain. Usually minimum of 9 months to negotiate 

agreement.

Kerry: treated produced water is the most difficult alternative source. Significant hurdle. If spill salty 

groundwater not held to the same risk as spilling recycle water. Transportation and logistics are big 

problem.

Dan: Agree that recycled produced is most challenging. Once spill 5 barrels, you are in a pinch. 

Acid mine drainage?

Kerry: not using, but expect will be similar to industrial water. Similar concerns in moving, spilling. But 

where available, should consider using it. Need to know impact on wells, and that may not necessarily 

be negative.

Don: issues with custody transfer with the paper water? Needed 3 different permits from the LDEQ. 

Changed the rules as they went. IP has direct discharge permit to Red River. No issue with transferring 

custody. Requirement to report large leaks (since using irrigation pipes), but not concern about drips 

and spills (<1,000 gallons). Paper plant was having poor economic times, so receiving $0.10/bbl was 

good.

Kerry: If want to sell Marathon’s water to someone else, and they mishandle, it’s on them first but still 

concern to Marathon. If you generated it, you still own it. This risk/concern is a large hurdle.

Sam: concern about POTW effluent. If spill, then an illicit discharge. Can only go to the stream/river it’s 

allowed to go to. Some POTWs are required to recharge to river/stream, so limitations on how much 

water they can give away. If spill, will look at the operator who sold the water, so a concern. Need to use 
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POTW water within 9 days without additional treatment. Hard to do 2 wells and stop, and then wait 21 

days for next well. So Don’s source that was “on demand” was very good. POTW agreements don’t allow 

ability to start and stop flow – wants to deliver flow daily per agreement.

PA DEP sent letter to encourage sharing of produced water. Letter says don’t require any side 

agreement (i.e., takes the liability away). That is, whoever takes it is responsible and the original 

generator has no liability.

Challenges with shared water with other operators?

Kerry: Landowners. Just because built a pond, doesn’t mean you can do whatever you want with it.

Often landowner wants to keep all profit from the water, which is a disincentive. Don’t want to be a 

middle man with no benefit.

Sam: put in frac pond and 3 wells. Free use of pond, but paid for water.

What is most challenging geology for water rights?

Kerry: Colorado is the challenging because water is overallocated. Easy to get in trouble. TX is 

challenging on surface water because overallocated. Surface water is likely temporary rights that can be 

immediately terminated. Want to be good stewards and not use a constrained resource, but very 

challenging.

Don: EXCO has not had much problem with water. Often ample sources, so disincentive to reuse water.

Sam: baseflow source – regulators want to cut you off. Want agreement that once we start, you cannot 

stop us. Issues with dealing Indian tribes.

Kerry: some people say that what the formation prefers to get is what it gives up (in terms of salinity). 

Problem is sophistication – each well is unique in what conditions are needed to optimize production. 

Need better studies and understanding of these issues.
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13.Water Sourcing

Alan Chamberlain, Cedar Strat Exploration, Mapping Available Water Resources in Nevada

Nevada has different regional basins. Each area is managed as a separate groundwater basis. 

In Diamond Valley, there is not enough groundwater to sustain ag needs and mining/milling needs. 

Either ag or mining has to be suspended until another water resource is developed (not enough to 

sustain both).

Inadequate geologic survey. Don’t have an accurate hydrology model for Mount Hope. Over allocation 

of groundwater permits resulted in creating a hydrology disaster. GW levels as dropped so low that the 

Diamond Valley is now essentially a dessert where used to have lakes and streams and fish.

Shales hundreds of feet deep. Discussed possibility of a discovery of a major play in Nevada.

To develop, need to stop all the pivots.

Looking for alternative ways to get water to the valleys. May need to bring in from another source. 

Possible to bring several miles from another river.
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15.Water Sourcing – Regulatory

Kent Wilkins, Oklahoma Water Resources Board

Michael Sims, Railroad Commission of Texas

Jay Hansen, Arkansas Oil & Gas Commission

Kent: direct authority over water rights (not over oil). A lot of competition over water during these last 5 

years of drought.

Any use of water other than domestic requires a water right permit.

Administrative Approval Process

90-day Provisional Temporary Permits. At sole discretion of the director. This is mostly what the O&G 

industry uses.

GW is a private property right (ownership tied to overlying land owner)

Surface water is considered public water. Need to justify use to receive an allocation. If not used, can 

cancel or reduce to the amount actual used. Surface water in the west significantly affected by drought.

Some western streams are already fully allocated, so need to meet with OK if looking to develop to 

discuss.

Recent trend for more long-term water rights permits, rather than temporary. Long-term can be 

perpetual, or can be for a specific term (e.g., 10 years)

Starting in 2009, some increase in the number of permits and dramatic increase in the amount of water 

for permits. Right now, O&G accounts for 5% of OK water use. Over next 50 years, anticipate may group 

to perhaps 12%. But reuse may reduce that.

Property owners are starting to apply for permits for water rights for oil and gas. In these cases, no need 

for E&Ps to go to the state – contract with the land owner directly. The land owner only needs to report 

the water use annually. Some land owners also proactively building water storage that they fill up when 

water flowing.

How is withdrawal rate calculated? For GW, you can withdraw at whatever rate you want, subject to 

annual limit. For SW, need to justify and include the rate in the permit.

Note that domestic use has the highest priority for SW withdrawal.
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20.Induced Seismicity and Injection Wells: Arkansas Case Study

Scott Ausbrooks, USGS

Guy-Greenbrier Earthquake Swarm - 2010

Western AR is conventional O&G and eastern is unconventional O&G

1970 started to have equipment to detect earthquakes. Earlier data is anecdotal.

Started in 2006 started the shale play. 2006 through 2009 # earthquakes is about what would be 

expected. In 2010 and 2011 dramatic increase. Most of these in the Guy-Greenbrier. So far in 2014 

about 80 events. Much lower than 2010/11, but still elevated over history.

Two well documented cases (Rocky Mountain Arsenal, CO in the 60s and Paradox Valley, CO in the 90s 

demonstrate that fluid injection into the subsurface can trigger earthquakes.

There are thousands of disposal wells across the country with no impact on seismicity. Very safe.

In this case, as plausible hydraulic connection exists between the injection depths and the fault.

Dramatic increase in seismic activity with injection in G-G followed by dramatic decrease when injection 

stopped.

Now a moratorium on injection in a sizable area around and extending up and down the faults.

Lesson learned – don’t put injection wells near fault lines, especially fluid filled systems.

Don’t think it’s lubrication of the fault, or direct hydraulic connection, but rather the pulse from the 

wells moving through the fractures in the formation.

There can be a lag time of a few days to weeks between injection and response in earthquakes. 

Think the issue now in OK may be lag time.

Difficulty in knowing surface injection pressure and projecting to at depth pressure. Frac pressure = 

7,000. Injection pressure at depth is about 1,000. Some of the studies used 5,000 to evaluate effect on 

seismicity.

Another lesson learned: know the faults in your area and their orientation. Cooperate with state 

agencies to get 3D seismic.
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23.Disposal Regulatons Arkansas

Jay Hansen, Arkansas Oil & Gas Commission

In AR can’t put produced water in a pit for long-term storage because chemicals will erode liners. Double 

liner and leak detection for reuse. Storage of flowback is OK.

Wells are 175 miles away from where extraction is occurring. South AR has mostly privately owned 

wells.

H rules for permit for disposal require conducting geologic studies to provide info to inform potential for 

seismic activity. Applies only to Fayetteville Shale production area. Staying 5 miles away from faults.

Director may require additional seismic info and fault location during permit review. Well flow and 

injection pressure and volume of fluid injected required to be reported on a daily basis.
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25.Land Owner Negotiations

George Oggero, Vanguard Natural Resources

Regulators and regulatory bodies: until recently didn’t need to follow due process and had extensive 

authority.

Need to foster a good relationship. Sponsor fundraisers for charities, etc.

Case Study: wanted to build pond storage.

When land owner calls or emails, need to respond immediately to foster good relations.

You can have an agreement with the land owner, but may also need a separate, prescribed agreement 

for the state agency.

Apparently injection wells are different than salt water wells. If injection well, don’t need to pay the land 

owner per barrel fee for injection. If salt water well, the land owner can charge a disposal fee.

Terminology: surface use, surface owner compensation, mineral development, surface damages. 

Mineral rights=right to develop. Surface owner=right to be compensated for surface damages.
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26.Water Sharing

Joshua Adler, MIT Energy Initiative

Ways to apply technologies developed at MIT, and ways to solve problems. 

Industry needs a source water market place for buying, selling and managing water and water services. 

Plenty of water available for reuse, but sometimes hard to find. www.sourcewater.com

Similar to other online buying/selling marketplaces like ebay or amazon. Probably closest match is ebay. 

Another good example is travel sites, where see all the available sources at one time.

Move water planning from taking days or weeks working the water cycle versus going on the internet 

and finding a solution in a few minutes.

By increasing the number of sources, reduces the average distance needed for transportation.

Status: in beta testing now, getting feedback

Next step: pilot trial in early 2015

Will have a reputation-based assessment system. Will also vet all uses to ensure that they are who they 

say they are.

Concerns about legal liability? Varies a lot from state to state. In PA, first question is about liability (PA 

can reach back to assess liability back through users, although they say they will not exercise that 

authority). TX limits liability when legitimately transfers water.

For beta, first focused in PA as wastewater recycling rates are high. Thought easy to adopt in PA, but 

state liability issue has been a hindrance. For beta, also focusing on West Texas, because it’s a much 

bigger market and less liability issues.
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27.Alternative Water Resource Solutions

Note: not really alternative water resources, but finding places to drill that require little or not water

Alan Chamberlain, Cedar Strat Exploration

Nevada Great Basin

Most shales have already been naturally fracked. Just need to drill and recover. No need for fracking and 

horizontal drilling.

This guy makes things sound so easy and obvious. Why aren’t we drilling there long ago? Table neighbor 

told me it’s because this guy is contrarian, but sometimes contrarians are right (like the first guy who 

developed fracking).

Lots of land available right now in NV for leasing for not much money, if you know where to pick up the 

leases (which apparently is the trick).