Keys to Better Water Management: Seeking Sustainability Amid the Chaos
Authors: Cherednichenko Natasha 
Published: April 2020

Here we go again. A series of unexpected circumstances have intersected to drive oil markets down, causing myriad challenges for operators and service companies alike. 

A virus pandemic erupts, shutting down global economies and thus the demand for oil. Ongoing disagreements between OPEC, Saudi Arabia, and Russia on a response strategy and increased production sees global crude prices drop to the $20 range, something we have not seen in decades.

Compounding the crisis in North America is the market influence over the past few years, which drove operators to focus on cash flow and profitability over production and capital discipline with limited access to equity and additional debt. Operators will need to work closely with service providers to once again make step changes in optimizing value, improving efficiency, and eliminating downtime and wasted resources.

The New Normal

Speculation as to the duration of this crisis is just that: speculation. The macro forces fueling it, the COVID-19 pandemic, and the price war between OPEC and Russia are beyond our control. In terms of business, it is wiser and more prudent to focus on what we can control.

Even before the recent events, most operators and service providers had already been revising their strategies, shifting from production growth to profit growth, in response to dwindling investment. We can expect that trend to intensify. There will be an increased emphasis on making operations more efficient and leaner with fewer resources and less susceptible to incidents and interruptions that lead to downtime. Further, investors are continuing to prioritize ESG factors (environment, social, and governance) alongside profitability. The room for error and cost overruns just got a lot smaller.

It is a well-worn cliché but perfectly apt right now: When life gives you lemons, make lemonade. As challenging as the current market climate is, it nonetheless presents us with opportunities to adopt more sustainable and more efficient solutions; among them is better water management.

Given the ratio of produced water to oil—up to 10 bbl for every 1 bbl of oil—development of unconventional assets has required increasing the focus on water management operations. To hydraulically fracture a single well requires millions of gallons of water, water that is frequently sourced elsewhere and transported to the fracturing site via truck.

Hydraulic fracturing produces millions of barrels of water from the reservoir in addition to the oil. The produced water, along with any recovered frac water (flowback), contains sands, salts, and metals that make it challenging to reuse directly in fracturing or otherwise.

The more sustainable and more efficient solution is to recycle the flowback and produced water. It entails desanding, filtering, and treating the flowback and produced waters, blending it to applicable specifications, safely storing it, and finally transferring the recycled water to the wellsite for use as a fracturing fluid.

A comprehensive, integrated, and automated closed-loop water management system can render flowback and produced water into a suitable base fluid for fracturing. Such a system not only brings more sustainability, accuracy, and efficiency to water management, it is cost-effective, especially now amid this volatile market.