In California and beyond, drilling for oil as water runs short

Californians are being asked to cut water usage 25 percent. Should the oil industry cut back, too? It's a question arising worldwide as energy demand rises in water-scare regions.

Manicured lawns will give way to arid, drought-tolerant landscaping. Homeowners will retrofit bathrooms with low-flow toilets. Golf courses, cemeteries, and college campuses will turn off the sprinklers.

As the Golden State braces for a historic, four-year drought to continue into the summer, Gov. Jerry Brown (D) is imposing unprecedented measures to fight a water shortage affecting 38 million Californians. "We're in a new era," Mr. Brown said. "The idea of your nice little green grass getting lots of water every day, that's going to be a thing of the past."

The world’s seventh largest economy – and the country’s No. 3 oil producer – is trying to change its approach to water. The question is whether the hydro-intensive energy industry will change with it.

Now more than ever, water plays a critical role in producing oil, the world’s largest source of primary energy. Advances in hydraulic fracturing, or fracking, have led to a North American energy boom that can use as much as 5 million gallons of water per well to unlock oil and gas deposits. Other techniques like water flooding and steam injection are commonplace methods for energy firms in California and elsewhere to maximize well production.

Progress has been made toward using water more efficiently, and industry representatives say they’re working to conserve even more. But in many parts of the globe, fuel demand is multiplying just as droughts and over-consumption make water a coveted, scarce resource. Nations must strike a delicate balance between energy demands and precious water resources.

Nowhere is that tension more acute than in places with the unfortunate paradox of being fossil-fuel rich but water-poor.

For its part, California uses markedly less water for oil production than other US states, experts say. Industry even recycles wastewater for repeated use in wells, or to water parched California farmland. The California energy industry’s water use is also modest compared to industries like agriculture, though exactly how much the oil and gas industry uses is unclear.

 

California producers used an estimated 80 billion gallons of water or more in 2013, according to Reuters, specifically in enhanced recovery techniques like water flooding or steam injection. Under a law passed last year, the industry will have to disclose precisely how much water it uses. That data won’t be available until later this year.

In a drought-ridden state with limited oil industry water use data, an inevitable question is arising: Just how much water do energy firms use, and at what point does the need for water trump the benefits of domestic oil-and-gas production?  

Saving water

For some, that point has already arrived. Critics mention that cities and towns don’t consume most of California’s water; in fact, they only use about 15 percent. Agriculture uses 80 percent of the state’s water, and the oil industry uses a sizable amount as well. And while California farmers have already suffered and scaled back plantings, some say the oil industry isn’t doing its fair share.

“The oil industry has taken no hit whatsoever in the last three or four years,” Adam Scow, California director of Food and Water Watch, a consumer rights group, said in a telephone interview Tuesday. “They’ve gotten all the water they’ve wanted. It’s only fair their use be curtailed as well.”

Nationally, energy firms used 92 billion gallons of water to frack oil and gas wells from January 2011 to February 2013, according to an Environmental Protection Agency analysis. And about half of those wells are in places facing drought: 47 percent of the US’s recently fracked oil and gas wells are in regions with high or extremely high water stress, according to a report released in 2013 by Ceres, a Boston-based nonprofit supporting sustainable investing. That’s led to tension between cities, farmers, and an increasingly water-intensive oil industry.

Of course, it’s hardly in the oil industry’s best interest to waste water – particularly when the resource is so coveted.

“Water, like any of the ingredients that go into energy production, can be a costly item,” says Tupper Hull, spokesperson for the Western States Petroleum Association, an industry group. “Oil companies are very sensitive to cost containment. They’ve already – even before the drought – taken a lot of steps to make sure the water required is used as efficiently as possible.”

And even though large amounts of water are needed to frack oil and gas wells, says Philip Verleger, a Colorado-based energy consultant, “there’s not much fracking in California – nothing like what they’re doing in Texas and North Dakota.”

Amid the worst drought in the state’s history, California pumped 70 million gallons of water to frack oil and gas wells last year, using a watery mixture of sand and chemicals to unlock fossil fuels. That’s as much water as 514 households use annually, Steven Bohlen, the state oil and gas supervisor, told Reuters.

And while that number is a drop in the bucket for a state with 38 million residents, fracking is a fraction of the California oil industry’s total water usage, Mr. Scow says, and it’s hard to account for all of the water it uses for other techniques like steam injection and water flooding.

Running short

Fracking has kicked off a shale oil and gas boom across the US, pushing down oil prices globally and giving motorists big savings at the gas pump. But in places with water shortages, the hydro-intensive extraction technique doesn’t come without a cost to local supplies.

Small towns in Texas have effectively run out of water, after drought and a thirsty oil industry depleted supplies. In Colorado, water scarcity has increased tensions between farmers and oil companies, who on occasion have competed for the same water supplies. That tension is not limited to the US – China, India, Brazil and other countries are struggling to balance growing energy demands with managing water and food resources.

“Increasingly we have freshwater scarcity issues globally, and it’s finally hitting home,” says Jim Matheson, CEO of Oasys Water, a company that helps industry reuse water, in a telephone interview Thursday. “We’re using more and more water for industrial activities – oil and gas extraction, yes, but also power generation, thermal cooling, and more.”

In many ways, the oil industry’s water situation in California is better than in other parts of the country, given the fact that water-intensive fracking isn’t as common there. And in a low price environment, oil companies are already incentivized to scale back production. “Oil production is already under incredible pressure given the decline in prices,” says Mr. Verleger, the energy consultant.

Governor Brown defended his decision not to target the energy industry with water-reducing measures by arguing that California – a state where car culture reigns supreme – can’t exactly go without crude and its byproducts, like the gasoline that powers its automobiles.

“If we don’t take it out of our ground, we’ll take it out of someone else’s,” Brown said in an interview with PBS Newshour last week.

Brown was quick to defend agriculture, too – another sector his water cuts didn’t target.

“The farmers have fallowed hundreds of thousands of acres,” Brown said. “They’re pulling up vines and trees. Farmworkers are out of work. There are people in agriculture areas that are really suffering.”

But if the oil and agriculture industries are going to use less water in the future, there will need to be higher costs for water, and regulations should discourage companies from disposing of water after a single use, Mr. Matheson says.

“Most of what the oil and gas industry has cared about is minimizing the cost of disposal,” Matheson says, when it would often be possible to reuse that industrial water after cleaning it.

But without any economic incentive to reuse the water, it’s often cheaper to dispose of it – whether that water was pumped into the well through fracking or steam injection, or came up with oil as a natural byproduct. Water, in the past, has been viewed primarily as a waste product after it’s been put to industrial use. Oasys and other companies hope to change that. Waste water recycling is particularly appealing in Texas, where water is as scarce as oil is abundant.

“The equation now is: Is our solution cheaper than the cost of getting new freshwater and the cost of getting rid of the waste water? And in many cases we can be cheaper than that,” Matheson says.

Oasys is deploying water cleaning technology in drought-plagued states like Texas. Similar solutions could take hold in California, where steam injection and water flooding use large amounts of water that could be – and often are – recycled for future use.

Water for farmers

California oil producers say that their operations actually extract more water than oil from deep underground; and, though undrinkable, that water has uses beyond oil extraction. In fact, it's conceivable that some day the California oil industry could be a net producer of water – providing more of the scarce resource than it uses.

“In Kern County alone, two oil companies provide 41,000 acre feet – that’s 13 billion gallons a year – of water to farmers,” Hull, the energy industry spokesperson, told the Monitor. “Happily, in the drought, that water will continue to be made available to farmers who are facing cuts in other areas.”

California’s oil industry pumps most of its crude around Bakersfield, Calif. in Kern County, which, according to Newsweek, produces more oil than any other US county.

Every barrel of oil extracted there comes to the surface with 10 or more barrels of salty waste water. Farmers desperate to moisten their dusty fields have been buying that water from companies like Chevron, Newsweek reported this week, using the waste water to nurture almonds, pistachios, oranges and other crops. Oil products are removed from the water before it meets farmers’ fields.

Still, it’s a case of extreme circumstances calling for extreme measures: Farmers know the salty water could harm their land in the long run, but hope that after the drought fresh water will flush the salts out of the soil.

Environmentalists and consumer advocates caution that watering fields with waste water could be too risky – even when water is so scarce. They worry the waste water could contain high levels of vanadium, chromium, selenium, or other compounds that experts associate with public health problems.

“There are a lot of questions, and there are really no regulations on the practice,” Scow, of the consumer rights group, told the Monitor. “We don’t know if the chemicals in the waste water are a threat to the food people are going to consume.”