The meteoric rise in drilling and completions activity in the Permian Basin in the past few years has brought with it a scramble for new sources of water. As a result, “water is the new oil,” says Energy Makers Advisory Group’s Laura Capper. “The value of water has changed.”
Capper made this comment in a recent Bloomberg article investigating how water demand for hydraulic fracturing, or fracing, has grown sharply in the region. The article also reviews how ranches in the Permian are capitalizing on the oil and gas industry’s need for water by selling their excess supplies for a steady revenue stream.
Among reporter David Wethe’s other findings:
- Water rights are having a significant impact on property values, allowing ranches with ample water supplies near major oil & gas producing regions to fetch record prices.
- Fracing a Permian well can require an operator to pump as much as 60,000 barrels of water into the well every day for up to 10 days
- Aggressive sales of water to the oil field are raising concerns that aquifers that individuals and businesses rely on could start to run dry.
While the article is sobering, we see the cup as half full, as these economic challenges – along with disposal capacity concerns – are major drivers to reuse, recycle, and keep water in the hydrocycle, all good things for industry and the environment. Permian operators are proving to be nimble, and are very quickly adopting better water management practices, particularly shying away from freshwater sources.
Energy Makers will continue following this, and related, stories on water sourcing and disposal in the Permian. And, visit our new Data-on-Demand service page to access up-to-date data packages we’re compiling and analyzing to help make sense of water volumes, injection and pressure trends in key oil and gas production regions.