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Drilling Cutbacks Pose Water Recycling Dilemma

The decline in U.S. unconventional natural gas drilling this year may create an unintended consequence: reducing the amount of flowback water that operators reuse at well sites.

"What are you going to do with that water if you lay down rigs?" asked Talisman Energy Inc.'s Christie Webb, a water management engineer. She was speaking to conference attendees last week on the first day of the Fifth Shale Gas Water Management Marcellus Initiative 2012 in Canonsburg, PA.

The problem might be easier to answer for for large operators like Talisman, which contract multiple completion crews and reuse produced water quickly, but smaller operators that hydraulically fracture only a handful of wells each year may face some tough questions, said Webb. "How are you going to keep your gas wells online? How do you manage all that water that comes back from them? Because you can't produce gas without water, unfortunately," she said.

Talisman produces on average 2,000 barrels a day of production water from its operations in the Marcellus Shale of northeastern Pennsylvania, and in 2011 the company reused 98% of it, or or 114 million gallons. That missing 2% came after Talisman last year voluntarily and temporarily shut-down its completion operations for safety reasons, Webb said. "What that left us with is a lot of water to manage. It's important to look at what I would call an insurance policy." Those policies include deep well injection and dilution, in addition to treatment options.

Talisman plans to run as few as three rigs in northeastern Pennsylvania this year, down from as many as seven rigs a year ago. Chesapeake Energy Corp., Cabot Oil & Gas Corp., and other big players are planning similar cuts in response to low natural gas prices. Those companies all depend heavily on recycling to manage the produced water from their wells.

Recycling presents a complex logistical challenge for operators, especially in the Marcellus, where wells in different parts of the play may return anywhere from 15-50% of the water pumped downhole during completion activities. Additionally, the volume and chemistry of the produced water may change over time, making it difficult to predict exactly what fluids will be available.

Water chemistry, reservoir geology and economics determine how much produced water operators can recycle, but a major factor is completion activity, Webb said. With wells drilled once but hydraulically fractured numerous times, the reduction in Marcellus drilling this year does not necessarily mean companies will immediately be looking to dispose of millions of gallons of water they might otherwise have recycled. However, as Webb noted, "You can't really run water effectively through your frack program unless you actually have an active frack program."

The recycling questions might be coming to light now because of the reduction in Marcellus drilling, but it wasn't caused by those reductions, according to Radisav Vidic, a professor in the Department of Civil and Environmental Engineering at the University of Pittsburgh. The problem is inherent in nature of recycling, he said. "If you have another well to frack, then recycling works. Once you've fracked all of the wells in the well field, you have nowhere to go with this water and you're going to be producing produced water for the next 20 years," Vidic said.

The Utica Shale could postpone the problem for Marcellus drillers by giving them nearby wells to send fluids for recycling, "but at some point, you're going to have to pay the piper," he said.

Vidic believes the recycling option took the pressure off operators to pursue disposal options and "we don't have a viable option for disposal, at the moment," calling the existing technologies "small scale and stop-gap measures" that couldn't handle all the fluids produced from the play. "We need to develop technologies that are going to allow final disposal alternatives," he said.

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