News Feature | August 13, 2014

Oil Company Buying Treated Effluent From Utilities For Fracking

Sara Jerome

By Sara Jerome,

The oil and gas company Pioneer Natural Resources is working on a new pipeline to carry treated effluent to fracking sites beginning next year.

One advantage for the company is that it could save money by using treated effluent in its water-intensive processes. Pioneer will buy the treated effluent from the City of Odessa, TX. 

"Typically, Permian Basin oil companies pay about 50 cents to $1.50 for a barrel of 42 gallons of water, according to the Houston-firm PacWest Consulting Partners. But when the Pioneer starts buying water from Odessa at its full guaranteed capacity of 4.2 million gallons a day, the company will pay about 27 cents a barrel," the Odessa American reported.  

"The wastewater comes from a supply of about 1.5 billion gallons a year treated at the Bob Derrington Water Reclamation Plant that is not fit for residential users," the American reported in a separate piece. As it stands, that water is dumped into the Monahans Draw after treatment.

Saving money was not the only motive for using treated wastewater. 

“The demand for water is huge and will continue to grow,” Stephen McNair, president of a unit of the oil company, said in the report. “We are looking into the future for our stakeholders, which include the citizens of Midland and Ector counties. We cannot sustain the practice of drilling freshwater wells with this kind of growth in that area. We have to look at alternative sources.”

The benefit for the city is new revenue. It will gain "up to $100 million in new revenue over the next 10 years that it can use to seek better sources of drinking water. The arrangement is take-or-pay, meaning Pioneer still has to pay the city even if it does not take the water," the American report said. 

City officials were enthusiastic about the deal. “The reality is water is so critical for our future growth and for today,” City Manager Richard Morton said to the American. “This agreement will bring us revenue that we haven’t had before to help us secure additional water sources.”

Alpha Reclaim Technologies LLC is one company testing the market for treated effluent among energy companies.

“We're trying to displace the use of fresh water for hydraulic fracturing,” said an Alpha Reclaim Technologies official to the San Antonio Express-News. “Instead of being an expense for cities to treat and release the water, it becomes something that makes money for them.”

For more oil and gas news, check out Water Online's Produced Water Solution Center

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