Meanwhile, utility Aqua America Inc has said a water pipeline to supply frack sites in the Marcellus shale in Pennsylvania will eventually add 10 cents per share to its annual earnings.įor energy companies, the use of flowback water for fracking eliminates the need to truck wastewater to disposal wells. It is completing development of its water recycling offering this year. Layne Christensen Co, a provider of water management services, said it expects its new fracking-focused business to generate $200 million in revenue by 2017, with "meaningful" revenue generation beginning in 2015. Some companies already forecast big revenue gains from fracking. "Fracking has simply added the ability for incumbents in the market to grow earnings further," said Simon Gottelier, a portfolio manager who oversees water investing for London-based Impax Asset Management, which has $3.5 billion under management. All three currently trade close to their 52-week highs. Companies like Xylem Inc, which makes water testing and other equipment, Ecolab, which owns water treatment company Nalco, and Gorman-Rupp Co, a pump maker, are companies that could see an uptick in business, one portfolio manager said. Rollout of recycling technology is in its infancy, but poised to lift demand for everything from water pumps to valves to pipes. Water use and resources are local issues, and approaches to managing water will vary by geography, XTO said in a statement, adding, "Recycling is not a universal solution." Transportation is by far the costliest element of water management for fracking, and local communities like recycling because it takes trucks off the road.īut the industry has a long way to go, Halliburton's Dale said, adding that recycling is still in a "pilot" period. Environmental Protection Agency could also implement rules concerning recycled water when it delivers its study of hydraulic fracturing next year. Under those rules, operators no longer need a permit to recycle water if they are on their own land leases. The Railroad Commission of Texas, which regulates the oil and gas industry there, adopted new rules in March to encourage recycling. Increased industry comfort with recycling comes as regulators are moving to require more recycling of water used in fracking. The average cost of a well varies by region, but comes in at about $7.5 million in Texas' Eagle Ford shale formation, according to a Jefferies report from May.įTS International said it is using up to 100 percent reclaimed water in some locations in Oklahoma and Texas, with results comparable to using fresh water. The wells have shown no loss of production, Dale said.
The study found cost savings of between $70,000 and $100,000 per well. Halliburton and Exxon Mobil Inc's XTO Energy earlier this year documented the use of Halliburton's H2OForward recycling service on XTO Energy wells in Eddy County, New Mexico in a paper at a Society of Petroleum Engineers conference. "It doesn't lessen the potential for groundwater contamination, and it can increase the amount of contaminants that you are exposing the groundwater to," said Myron Arnowitt, Pennsylvania director for Clean Water Action.
The practice scales down the amount of freshwater used for fracking, but environmentalists say it does nothing to assuage concerns about groundwater contamination, and only facilitates the extraction of fossil fuels that produce climate-warming gases. Until recently, many companies considered recycling too expensive or worried that using anything other than freshwater would reduce well output.īut oil and gas companies are increasingly treating and reusing flowback water from wells, which unlike freshwater is very high in salt, with good results. "It is a paradigm shift," Halliburton's strategic business manager of water solutions, Walter Dale, said. Smaller companies like Ecosphere Technologies Inc have also deployed similar methods. To attack those problems, oilfield service companies like Halliburton, Baker Hughes and FTS International, are treating water from "fracked" wells just enough so that it can be used again. Slightly dirty water, it seems, does just as good a job as crystal clear when it comes to making an oil or gas well work.Įxploration and production companies are under pressure to reduce the amount of freshwater used in dry areas like Texas and to cut the high costs of hauling millions of barrels of water to oil and gas wells and later to underground disposal wells. LOS ANGELES (Reuters) - The oil and gas industry is finding that less is more in the push to recycle water used in hydraulic fracturing.
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