While unconventional energy plays require more water than their conventional counterparts, it's the rapid growth of those new plays that is shining a spotlight on how the oil and gas industries use water, a Massachusetts Institute of Technology (MIT) professor told attendees at CERAWeek 2011 in Houston last week.
"The attention being given to the industry is not necessarily because of something particularly evil about it," said Ahmed Ghoniem, a professor in MIT's department of mechanical engineering. "It's because of the very significant rise in the activity in the field."
Ghoniem made his comments during a panel discussion on the relationship between water and energy.
"The problem really doesn't get any more complex than this: marrying water and energy is really talking about what many of us think are the two most important problems facing humanity," he said.
Producers in the five major U.S. shale plays -- Barnett, Fayetteville, Haynesville, Woodford and Marcellus -- used around 19 billion gallons of water in 2010 to drill wells and fracture rock formations, but Ghoniem said that per unit of energy, shale gas is less water intensive than coal, oilsands and ethanol production.
He also noted that water use varies wildly from play to play, and even within certain plays. The Woodford Shale in Oklahoma is almost three times more water intensive than the Marcellus Shale in Pennsylvania. With drilling on the rise, though, overall water use is growing, calling for more efficient systems.
Ghoniem said some technologies are already being used or are close to deployment, like polymer beads and electrocoagulation that can reduce water consumption by 90%, and that more advanced technologies are in the laboratory and pilot phases, such as new application of charged electrodes and reverse osmosis.
But, Ghoniem said, water use is a "multi-dimensional" problem. "If you try to solve the water problem, you'll be paying more for it," he said, adding that the costs are not only economic but also environmental because recycling technologies can be very energy-intensive processes.
How multi-dimensional is the problem?
When it comes to water use, the challenges producers face range from sustainability to regulatory to reputation to financial, according to Heiner Markhoff, president of GE Water and Process Technologies. "Water is a critical process ingredient to almost all areas of exploration and production," he said.
By 2030, Markhoff said, the world can expect a 470 trillion gallon gap between water demand and supplies at current rates of growth. While companies like GE are working on technologies to reduce consumption in industrial sectors through recycling, he added that the most common technologies in the marketplace -- evaporation and crystallization -- reduce water use to 5% but leave residual waste that must be managed.
Statistics like those will change how we value water in the coming decades, according to John Alexander, CEO of ERM Group Holdings Ltd., a global consulting firm with many clients in the oil and gas sector. "The value of water is something that as a society we haven't really come to terms with yet." Alexander said.
Alexander said that in the past, society valued water based on the cost to get it and deliver it to end-users, but as competition for scarce resources increases, the value will be based on the "opportunity cost" for alternative uses of the water and the "intrinsic value" of the water in supporting natural habitats and biodiversity.
The increasing demand for water used in industrial processes, including energy, is coming at a time when the general public is increasingly aware of water management. With global population growing and the middle class expanding, energy use is on the rise, but so is the belief that access to water is a basic human right.
"These two issues coming together creates a challenge for the industry," Alexander said.
Those challenges will likely lead to increased calls for disclosure and efficiency. Alexander said some companies will become responsive, proactive and transparent and use these challenges to their competitive advantage. "Those that don't risk being excluded from certain opportunities for the business," he said.
Alexander said the shale gas industry needs to consider the worst-case scenario now in order to build appropriate risk models as well as adequate response plans before something happens. In the meantime, the public wants the industry to be held accountable.
The Obama administration is committed to a clean energy economy but also believes natural gas will play an important role in what is expected to be a long transition period, according to Jason Bordoff, associate director for energy and climate change at the White Hole Council on Environmental Quality.
While the Obama administration understands the domestic energy potential of shale resources, "we take these concerns associated with hydraulic fracturing and shale development very seriously," Bordoff said.
He noted that the administration is taking several steps to address this, including an ongoing Environmental Protection Agency study of the impact of hydraulic fracturing on drinking water supplies; the willingness of the Department of the Interior to require chemical disclosures for drilling on public lands; and the Department of Energy measuring the risks associated with unconventional developments (see Shale Daily, Nov. 10, 2010).
"And we remain committed to working with states, which in many ways are on the front lines of permitting and regulating natural gas production, and we stand ready to assist states in that effort," Bordoff said (see Shale Daily, March 9).