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Escalating Water Strains In Fracking Regions

It’s bad enough that Western farmers and ranchers are reeling from a three-year-old drought and record heat waves. Now they’re feeling the heat from the goliath energy industry – over water
by Mindy S. LubberForbes Sustainable Capitalism Blog Posted on May 28, 2013

It’s bad enough that Western farmers and ranchers are reeling from a three-year-old drought and record heat waves. Now they’re feeling the heat from the goliath energy industry – over water.

From Texas to Colorado, hydraulic fracturing energy production is using larger amounts of water. So much that farmers and other major users are getting increasingly nervous about running out of the precious resource, especially as more people move to these states.

In drought-ravaged Texas, fracturing-related water use has doubled in three years, while dozens of communities are imposing water-use restrictions. In Colorado and North Dakota, energy companies are paying exorbitant money – up to 10 times more than farmers typically pay – to secure increasingly scarce municipal water.

And, with populations and energy production projected to grow sharply in the coming years, these competitive pressures are likely to worsen, especially if tighter water management measures for the industry are not put into place. A new federal study showing rapid depletion of underground water supplies in some of these same regions only adds to the urgency.

Shale energy production is a thirsty business.

To free up the oil and gas from shale deposits, anywhere from two to 10 million gallons of water (along with sand and chemicals) are injected into each fracturing well. Multiply that times tens of thousands of wells and you’re talking lots of water. The impacts are even worse when wells are tightly concentrated.

While much of the national fracking debate has focused on water contamination from chemicals, another big concern, especially in the West, is volume water use.

The past few years has seen a mad-dash scramble of shale energy production – and the sucking sound of water withdrawals – across much of the West and Southwest. Texas has been the biggest producer and water user by far, followed by Pennsylvania, Colorado and Arkansas. Texas shale producers used about 25 billion gallons of water last year and substantially more will be used as more drilling takes place in the rich Eagle Ford formation. In some rural Texas counties, fracking accounts for 10 to 25 percent of water use and is projected to eclipse 50 percent in the future.

Click to view the interactive map

A new report by my nonprofit group Ceres shines a light on the escalating water/shale production tension. The report authors evaluated well location and water use data from the fracking website FracFocus.org. The data was then laid on top of water risk maps developed by the World Resources Institute (WRI).

Nearly half of the 25,450 wells evaluated – 47 percent – were in water basins with high and extremely high water stress. In Colorado, 92 percent of the wells were in extremely high water stress regions. In Texas, 51 percent were in high or extremely high water stress regions. A basin with extremely high water stress means that more than 80 percent of the available water is already allocated for agricultural, industrial and municipal water use, according to WRI.

The report calls into question whether the industry’s growth in these arid states is sustainable – especially Texas, whose population is expected to grow by 80 percent in the next several decades just as thousands of new wells are being drilled every year.

Goldman Sachs has similar concerns. “Adequate water supply is a critical ingredient in shale production … but there are significant regional differences (in water supplies),” wrote Goldman Sachs in a report this month, noting the Southwest’s vulnerability to drought and aridness.

Investors such as Calvert Investments are also filing shareholder resolutions with shale producers on the water topic.

Shale producers and state policymakers are certainly mindful of the water scarcity problem and are scrambling to ramp up solutions such as recycling, saline water use and even waterless fracking.

But the results so far have been inconsistent and vary widely from region to region. For example, water recycling in the Marcellus region of Pennsylvania is as high as 40 percent, but remains in single digits in many parts of Texas, Colorado and California.  Recycling also has limitations because most of the water injected into the wells remains in the ground. There are also technical challenges to using recycled and saline water such as handling the contaminants in the water and corrosion of equipment.

Clearly, shale energy producers and regulators will need to dig deeper to better manage current and future competitive pressures between shale development and society’s broader water needs. Competitive fractures are already being felt in water stressed regions and far stronger water management practices, and more frank discussion of these issues, are urgently needed.

Read the post at Forbes Sustainable Capitalism Blog

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Meet the Expert

Mindy S. Lubber JD, MBA

Mindy S. Lubber is the president of Ceres and a founding board member of the organization. She also directs Ceres’ Investor Network on Climate Risk (INCR), a group of 100 institutional investors managing nearly $10 trillion in assets focused on the business risks and opportunities of climate change. Mindy regularly speaks about corporate and investor sustainability issues to high-level leaders at the New York Stock Exchange, United Nations, World Economic Forum, Clinton Global Initiative, American Accounting Association, American Bar Association and more than 100 Fortune 500 firms. She has led negotiating teams of investors, NGOs and Fortune 500 company CEOs who have taken far-reaching positions on corporate practices to minimize carbon emissions, water use and other environmental impacts. She has briefed powerful corporate boards, from Nike to American Electric Power, on how climate change affects shareholder value.

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