Oil and gas companies pour energy into recycling water

Oil and gas companies doing business in Northern Colorado are increasing their investments in water recycling in an effort to cut their consumption, reduce costs and perhaps dampen criticism from environmentalists and others.

The issue is rooted in hydraulic fracturing, a practice that consumes large amounts of water during drilling. Fracking can involve pumping millions of gallons of water into a drilled hole to release oil and gas trapped in shale.

Western Slope operators tend to recycle a greater percentage of their water, though experts believe Northern Colorado operators recycle greater volumes because drilling activity has slowed in the Piceance Basin.

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At the moment, there’s no way to know exactly how much recycling actually takes place in Northern Colorado, though the issue could come into focus when the Colorado Oil and Gas Conservation Commission begins to analyze data it has gathered since June on the amount of water recycled in the state.

That’s expected to happen “in the coming months,´ said Todd Hartman, spokesman for the Colorado Department of Natural Resources.

Already, however, “we know that industry is aggressively pursuing recycling opportunities for water, both on the Western Slope and the Front Range, and we’re supportive of that effort,” Hartman said.

There are key differences between drilling in Northern Colorado and the Western Slope to explain why water recycling has not yet gained a greater foothold here.

In Northern Colorado, wells require a gel-like fracturing fluid that makes water-recycling more difficult than on the Western Slope, said Ken Carlson, a CSU professor of environmental engineering who is working with oil and gas companies to study their water use. The fluid used in fracturing here also contains more salt than on the Western Slope, so treating the water here for reuse costs more.

Operators on the Western Slope also recycle more water because the wells that they can use to get rid of their used fluids are farther away and so it costs more to transport.

In Northern Colorado, meanwhile, operators can dispose of their water through nearby deep injection wells.

“It hasn’t been adapted as quickly just because the need wasn’t there,” Carlson said. But, “the technology exists (to do so) from other fields” such as wastewater treatment.

Technology aside, treating water for recycling costs more than buying fresh water. But water experts like Carlson and Clay Terry, strategic business manager for Halliburton Water Solutions, believe savings for the companies can be found elsewhere.

Recycling water during fracturing generally means reusing fresh water at least once when it returns to the surface with the oil and gas, Terry said. Before reusing that “flowback” water, however, companies must remove the solids by treating it.

In addition, companies like Halliburton, the largest fracturing operator in the D.J. Basin, can recycle naturally occurring “produced” water that flows to the surface during the well’s lifespan, Terry said.

Water recycling still takes place more often in other places like the Permian and Williston basins in eastern Montana than in the D.J. Basin, Terry said. But it’s a growing practice in the Denver-Julesburg Basin, which includes Weld County.

“We are continuing to try to refine the process to make it more of a cost-parity alternative for the operator so there’s at least an economic wash if not an economic advantage,” Terry said.

The company now has the capability to treat as much as 25,000 barrels of water per day from each of its mobile water-treatment units. If additional capacity is required, multiple units can be deployed to meet the demand for a particular operation.

Companies can use more than 2 million gallons to hydraulically fracture a horizontal well.

“Recycling is just becoming more of an affordable option and more of a socio-environmentally motivated option for operators,” Terry said. “I believe it will be a growing concern and a growing practice.”

Increased regulations and drought conditions also will lead to greater recycling, he said.

For its part, Halliburton will open a water-supply facility to which it will add water treatment services in the future if it receives permits from state and county governments.

Even now, water recycling can save oil and gas companies money, chiefly on fuel that they would have used to transport fresh water to drilling sites. A company might spend 75 cents per barrel to treat recycled water while transporting and disposal of that water can cost anywhere from $1.50 to $3 per barrel, Terry said.

While not a primary concern on balance sheets, companies also could buck criticism of their operations by using less water.

The state estimates oil and gas development accounts for only a fraction of 1 percent of Colorado’s total annual water consumption, but environmental groups such as Western Resource Advocates in Boulder have charged that companies use much more.

“We need to take a step back and make sure we aren’t over-allocating our most important natural resource one frack-job at a time,” Laura Belanger, an engineer with Western Resources and author of a report on fracturing and water use, said recently. “While we need natural gas to transition to a cleaner energy future, we must have water to survive.”

Beyond addressing concerns about depleting water, Carlson said water recycling could save wear and tear on roads, decreasing truck traffic, and reduce handling of water, which can lead to spills, as well as avoid the cost of disposing water into wells 10,000 feet deep.

Already spurred by the drought, large drilling operations such as Noble Energy Inc. and Encana have recycling programs under way, though they vary in scope.

“Years like this year are driving them to take a much closer look at it,” Carlson said. “Water is too important for the oil and gas companies to just leave it to the market (on the hope) that they’ll be able to find water.”

Noble, for one, plans to build a water-recycling facility near Greeley. Encana, which drills gas wells in and around Erie, is recycling 3,000 to 4,000 barrels of water every week, or 126,000 and 168,000 gallons, spokesman Doug Hock said.

The effort is part of a pilot project that ends later this month. Encana will then determine whether to move forward with a more consistent water-recycling program, “based upon the economics of the project,” Hock said.

The problem, in part, is that natural-gas wells in the D.J. Basin do not produce as much water for recycling as the ones in the Western Slope, where the company recycles a greater percentage of water, he said.

“For fracturing, we need quite a bit of water, so it’s kind of a question of balance,” he said.

The company’s Western Slope program recently earned praise from Russell George, a member of the Colorado Water Conservation Board who has visited the company’s water-recycling operation.

“It cuts down the hauling: air-pollution, dust, the whole works,” George said. “The costs to the community of trucks in the industry (alone) is huge, so if you can cut down that amount of water-hauling, it’s tremendous.”