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Produced Water | Session VI - Ben Sebree

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Produced Water: Beneficial Consequences & Water Treatment Market Opportunities

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Produced Water | Session VI - Ben Sebree

  1. 1. PRODUCED WATER: BENEFICIAL CONSEQUENCES & WATER TREATMENT MARKET OPPORTUNITIES ATLANTIC COUNCIL CONFERENCE “FOSSIL FUEL PRODUCED WATER: ASSET OR WASTE?” WASHINGTON, D.C. JUNE 24-25, 2013 Benjamin W. Sebree Sebree & Tintera, LLC. General Counsel, Texas Water Recycling Association
  2. 2. The Oil & Gas Industry Saved the Whales The Automotive Industry Saved New York City & Recycled Produced Water Will Help Save Texas
  3. 3.  Beginning in the 1700’s, whale oil was used as the primary illuminant for lamps.  By 1830, the United States became the pre-eminent whaling nation in the world.  The whaling industry reached its height in 1856, then began to swiftly decline.  Why?
  4. 4.  Kerosene became available at less than ¼ the cost of whale oil.  Kerosene burned with less odor than whale oil.  By 1860, 40 kerosene plants were in production.
  5. 5. 1800: NYC Population ~ 30,000 1900: NYC Population ~ 4.5 million Horse Population~200K ~5 million manure pounds per day ~1.6 million urine gallons per day
  6. 6.  Cholera  Typhoid  Typhus  Yellow Fever  Malaria  Mortality Rate Skyrocketed
  7. 7.  Not Governmental Law or Policy  Not Regulation  Rather: An Unintended Consequence of a New Technology – the HORSELESS CARRIAGE
  8. 8. DECREASING WATER SUPPLY INCREASING POPULATION
  9. 9.  Population is expected to increase from 25.4 to 46.3 million by the year 2060  This represents an 82% increase
  10. 10.  Municipal water demand is expected to see a 73% increase by 2060  Total demand is expected to see a 22% increase by 2060
  11. 11.  Groundwater storage has been steadily decreasing.  By the year 2060, existing water supplies are expected to decrease by 10%
  12. 12.  Precipitation is expected to decrease by more than 1 inch by the year 2050.  Total precipitation is expected to decrease to 0-2 inches per year for most of Texas.
  13. 13.  Texas is rapidly undergoing desertification, representing a long term climate shift towards a more arid climate.  The current rate is 10 miles per year, moving east from west Texas.  This process is indicative of more severe droughts to come.
  14. 14.  By the year 2060, water shortages could account for $116 billion dollars in lost income and 1.1 million lost jobs in the state of Texas alone.
  15. 15. An Unexpected Benefit and Market Opportunity Recycling Produced Water Can Help Solve the Problem
  16. 16. CATEGORY 2010 2020 2030 2040 2050 2060 MUNICIPAL 4,851,201 5,580,979 6,254,784 6,917,722 7,630,808 8,414,492 MANUFACTURING 1,727,808 2,153,551 2,465,789 2,621,183 2,755,335 2,882,524 MINING 296,230 313,327 296,472 285,002 284,640 292,294 STEAM ELECTRIC 733,179 1,010,555 1,160,401 1,316,577 1,460,483 1,620,411 LIVESTOCK 322,966 336,634 344,242 352,536 361,701 371,923 IRRIGATION 10,079,215 9,643,908 9,299,464 9,024,866 8,697,560 8,370,554 TEXAS TOTAL 18,010,599 19,038,954 19,821,152 20,517,886 21,190,527 21,952,198 2011REGIONALWATERPLAN STATESUMMARYOFWATERDEMANDPROJECTIONSFOR2010-2060(INACFT*)
  17. 17.  Existing water supplies are expected to decrease 10% by the year 2060.  Average Expected Shortfall: 2020 = 2.3 Million Acre Feet (7.5 Billion Gallons) 2040 = 2.5 Million Acre Feet (8.15 Billion Gallons)  Without developing other water supplies, during a severe drought, Texas is expected to have an annual shortage of 8.3 million acre-feet (2.7 trillion gallons).
  18. 18. Approximate Amount of Fresh & Brackish Water Used per Year for Texas Oil & Gas Production: 1,397,965,619 barrels 58,714,555,998 gallons 180,106 acre feet (less than 1% of Total State Water Demand) Approximate Amount of O&G Produced Water per Year DISPOSED: 7,066,172,806 barrels 296,779,257,852 gallons 910,365 acre feet (Approximately 5% of Total State Water Demand; 2/3rd Recycled Yields 3.3% of Total State Water Demand AND 26% of projected WATER SHORTAGE)
  19. 19. Texas Water Supply-Demand Gap Market Opportunity 0 5000000 10000000 15000000 20000000 25000000 2010 2020 2030 2040 2050 2060 Acre-FeetperYear Year Projected Water Supply vs. Demand Demand Supply
  20. 20.  By recycling produced water from oil and gas activities, a significant portion of the projected water shortage can be addressed.  Current produced water rates are ~7 billion barrels per year, or 294 billion gallons.  100% recycled produced water would meet roughly 39% of the PROJECTED WATER SHORTAGE in year 2020.  More realistically, 66% recycled produced water would meet 26% of the PROJECTED WATER SHORTAGE in year 2020.
  21. 21.  Produced Water is an Asset.  The Texas Oil & Gas Industry Uses Less Than 1% of Total State Water Demand.  But, It Can Contribute to the Hydrologic Cycle FAR MORE than It Uses.  Recycled Produced Water Can Help Solve the Texas Water Crisis.  If 2/3rds (Reasonably Achievable) of Produced Water in Texas Were Recycled, It Would Yield Approximately: 3.3% of Current State Water Demand 26% of Projected State Water Shortage in 2020.
  22. 22.  ASSET  BENEFIT  SOLUTION

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