Finding the Balance of Water & Energy, Part I
National media outlets have been buzzing about the recent release of the International Energy Agency’s World Energy Outlook. The annual report forecasts that the United States will surpass Saudi Arabia and Russia as the world’s largest oil and gas producer some time around the year 2020. Reactions to this news have ranged from excitement in anticipation of U.S. energy independence (WSJ), to concern about carbon emissions (Scientific American), to even questioning if the U.S. will join OPEC (Houston Chronicle). Here at Oasys Water, we are paying close attention to the impact that extracting these resources has on the U.S. water supply.
The U.S. already has the world’s highest per capita water footprint, at 2,842 m3 per year, more than double the global average of 1,385 m3. This is largely due to high living standards and consumption of goods with high virtual water such as meat and sugar, which respectively account for 30% and 15% of the American figure. Although the U.S. as a whole is fortunate to have vast fresh water supplies, it is not always available where or when it is needed. More importantly, this supply is being steadily exhausted, and is exacerbated by escalating drought conditions, quickly making water a national resource concern.
California, for example, already suffers from high water demand disparity due to its broad spectrum of biomes, high agricultural output, and densely populated urban areas. Knowing that conservation alone would not be the sole solution to its water woes, the state spent significant time and energy investing in treatment and transportation. However, by 2006, energy allocation for water transportation and treatment accounted for 20% of the state’s total electricity consumption. Recently, California has looked to seawater desalination to fulfill fresh water demands along the coast and currently has eighteen plants proposed with a total capacity exceeding 1,000,000 m3 per day. Many of these plants have seen delays due to the complexity of acquiring permits under the state’s surface water treatment regulations.
Texas is in a similar situation, but under different conditions. As one of the most arid states in the country, it has historically relied on state regulation of water use to endure extended periods of drought. Residents understand that the oil and gas industry requires significant allocations of fresh water and have traditionally been supportive given the economic impact of that industry in Texas. However, recent advancements in drilling technologies such as hydraulic fracturing and horizontal drilling are changing the landscape. These innovations have opened up drilling sites that were formerly not financially plausible, driving up the number of wells in the state almost 50% decade over decade, and have increased fresh water requirements to anywhere from 7,500 to 35,000 m3 (2 to 10 million gallons) per well. This massive demand is creating pressure on the supply and use of water.
Unfortunately, this problem is not isolated to densely populated areas. As the value of fresh water increases in these high stress areas, it becomes more affordable to import water from the surrounding territories. Many farmers in the Midwest have been blindsided by oil and gas companies outbidding them for water rights in an effort to secure the substantial supply required for hydraulic fracturing. Prices have reportedly been inflated to multiples in excess of 10-20 times those previously reached in times of drought. This proves to be very problematic for the agricultural industry, which operates at very slim margins and relies on high volume output to stay in the black.
Yesterday’s Wall Street Journal article crisply outlines the challenges and opportunities associated with escalating water demands, and conveys some of the trends associated with water use and reuse. It will be important to be thoughtful about how the U.S. and the rest of the world manage their dwindling fresh water supplies in the pursuit of tight oil and gas. These additional fossil fuel resources are important, but not at the expense of even more critical fresh water supplies.
Innovation, engagement, and appropriate regulation are all required to ensure this balance is achieved. At Oasys, we are actively engaged in the debate, and in helping to bring new ideas and solutions into the market that will support the efforts to achieve this balance.