Shale Daily / NGI All News Access

In Texas the Grass Is Brown, but Producers' Glass Is Half Full

The grass has long since turned brown in Texas, with many residents now restricted as to when they can water lawns. However, in most cases municipal water curtailments have yet to reach levels that affect water takes by contract users, such as oil and gas producers.

Fort Worth, TX, in the heart of Barnett Shale country, went into stage one water rationing on Monday. The city is encouraging producers to use reclaimed water that is now available from a new 11.5-mile pipeline. It can provide up to 12 million gal/d and could be expanded to 18 million.

The pipeline runs from the city's Village Creek water reclamation facility to the Dallas-Fort Worth Airport to serve the airport as well as the cities of Arlington and Euless in addition to Fort Worth. Targeted energy customers include Chesapeake Energy Corp. and Quicksilver Resources, Mary Gugliuzza, Fort Worth water department spokeswoman, told NGI's Shale Daily.

She said the producers can use the treated wastewater for drilling and hydraulic fracturing (fracking) as potable-quality water is not required. The reclaimed water is not subject to stage one drought restrictions, which took effect Monday.

"We are working with [producers] to see what they can do to minimize their impacts on us," she said.

Fort Worth's drought restrictions do not affect gas producers as they don't address use via contract meters, which are attached to fire hydrants and are the way producers typically get their water from the city, Gugliuzza said.

"We're just asking everybody to be a little bit smarter with water," said Fort Worth spokesman Bill Begley. "We've had a lot of people asking us about water usage as far as natural gas drilling and fracking and the whole process. What we've been told is the natural gas process uses about 1% of our water usage in the city. The vast majority of it is residential, and a lot of that is lawn watering."

If stage two restrictions were to take effect, it would affect producers, as well as everyone else that obtains water from the city via a contract meter.

The situation is a bit more strict in Grand Prairie, TX, which entered stage two water restrictions on Aug. 3. Citizens are restricted on lawn watering, and city water is not to be sold for oil/gas drilling or hydraulic fracturing unless the producer has obtained a variance from the city's public works department.

According to the city, Chesapeake has obtained three variances to use city water for drilling and Newark Energy has one variance. Variances for fracking have been denied, but there's a way around that, according to Public Works Director Ron McCuller.

"We were having problems maintaining adequate fire [emergency water] storage, so we did restrict fracturing off the city system," he told NGI's Shale Daily. "What we have done is approve some variances to our ordinance that allow gas drilling as well as water used for fracturing but not at a high rate of take; in other words, we'd let them slowly fill a frack pond."

While fracking requires a significant amount of water, the real problem comes when a producer draws all that water directly from the city's system very rapidly, McCuller said. To get around this, he said Chesapeake had the idea of more gradually filling a frack pond with city water and drawing from the pond for its frack jobs. "It's more an issue of how much water you take in a short period of time," he said.

Prior to the city's water restrictions, oil and gas companies accounted for 6.83% of the Grand Prairie water usage, McCuller said.

The Tarrant Regional Water District (TRWD) entered stage one of its drought contingency plan on Monday. TRWD does this when water storage falls to 75%. TRWD customers Fort Worth, Arlington, Mansfield and the Trinity River Authority are required to implement two-day-a-week lawn watering as well as other conservation measures.

This is the first time TRWD has implemented restrictions under its drought contingency plan based on its storage capacity, it said. TRWD serves 98% of Tarrant County and owns and operates four reservoirs: Lake Bridgeport, Eagle Mountain Lake, and Cedar Creek and Richland-Chambers reservoirs.

"We have no language in our drought plan that discriminates against any industry [such as oil and gas] until we get to stage three of our plan," TRWD spokesman Chad Lorance told NGI's Shale Daily. "In that situation we would look at all industries and curtail all the same."

Stage two is activated when storage is at 60%; stage three is activated at 45%, he said. When might the district enter stage three? "I wouldn't even speculate on that," he said.

"We treat the oil and gas industry the same as we would any of our other customers. They're wholesale water customers," Lorance said. "They do pay a premium for the water. They pay almost three times what we sell it to the city of Fort Worth for because it's a temporary contract."

He said this is because municipal customers have permanent infrastructure in place to receive water. Temporary water contracts are more costly to serve as they require TRWD to monitor customer takes and compliance.

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