Oil and water may not mix, but in Texas, they are deeply connected to our success in oil and gas production. To maintain our energy production dominance and continue decreasing reliance on foreign imports, Texas must continue to improve how we handle produced water.
One answer is to increase the recycling and reuse of produced water, as outlined in our recently published white paper: “Sustainable Produced Water Policy, Regulatory Framework, and Management in the Texas Oil and Gas Industry: 2019 and Beyond.”
Published by the Texas Alliance of Energy Producers and co-sponsored by the Independent Petroleum Association of America (IPAA), the white paper provides 10 recommendations to encourage the economical and sustainable recycling and reuse of produced water.
But first, why the focus on water recycling and reuse?
The Drivers
Here are a few of the factors that are driving the industry towards increased recycle and reuse:
- Over the next five years, the total statewide volume of produced water could roughly double to 15 billion barrels per year (Source: Sourcewater, Inc.)
- Disposal wells must continue to be an option, but capacity may be constrained and costs may increase due to changing seismic-related regulations
- Freshwater and trucking costs are increasing
- Advancements by the midstream water management companies have made recycle and reuse a viable, cost-effective option
- Produced water recycle and reuse offset the need for freshwater for fracturing operations and decrease truck traffic, enabling operators to reduce operating costs
- The Texas regulatory and legal environments encourage safe and economic reuse and recycling options
The Challenges of Water Recycling
Despite the great strides Texas has made in produced water management, challenges remain. For example, federal regulatory overreach is a constant threat. Texas must maintain sovereignty over produced water management.
Then, there are the environmental, community and political issues that factor into whether operators opt for treatment over direct disposal. Texas must work to ensure that state and federal rules, laws and regulations keep pace with the rapidly evolving business models of oil and gas production and produced water.
10 Recommendations to Expand Produced Water Recycling and Reuse
To address these challenges and encourage more recycle and reuse, the white paper promotes three guiding principles going forward:
- Texas must maintain leadership and control over produced water management
- Texas must continue to update its laws, regulations and practices
- The federal government must update its rules and continue discussions with its state partners
These are the ten specific recommendations outlined in the white paper:
Maintain Texas Leadership Over Produced Water Management:
- Preserve the Resource Conservation and Recovery Act (RCRA) exemption: The RCRA creates the framework for the proper management of hazardous and non-hazardous solid waste. Both flowback and produced water are exempt under the RCRA. Maintaining the existing RCRA regulatory framework is the foundation for almost all oil field waste management practices – and essential for expanding produced water management options. The RCRA exemption paves the way for Texas to maintain primary jurisdiction over produced water.
- Delegate National Pollutant Discharge Elimination System (NPDES) authority to Texas: Effective Sept. 1, 2019, statutory authority of NPDES is now under the TCEQ (Texas Commission on Environmental Quality) instead of the Texas Railroad Commission. The new law directs the TCEQ to submit a request to the EPA to seek federal NPDES delegation to Texas of these types of discharges. Achieving this delegation of federal authority to the state of Texas will ensure state rather than federal oversight, streamline permitting and enhance recycle and reuse opportunities in Texas.
- Maintain Texas jurisdiction over pipelines: If federal agencies such as the Pipeline and Hazardous Material Safety Administration (PHMSA) gained jurisdiction over produced water transportation, it would be disruptive and costly to the recycling industry. It would also have little positive impact on the state’s ability to oversee produced and recycled water pipeline operations.
Update State Laws, Regulations and Practices
- Increase interstate and association policy coordination: The more energy-producing states, associations and work groups share information, the better. This collaboration can help standardize policy as much as possible, given the significant variations in state authority. National groups and associations such as the IPAA, American Petroleum Institute (API), Groundwater Protection Council (GWPC), and Interstate Oil and Gas Compact Commission (IOGCC) should all play a role in this.
- Revise produced water statutes and regulations: The existing State of Texas framework for regulating produced water management is comprehensive and adequate. However, changes may be required at times as technology and practices evolve. For example, in 2013 the Texas Railroad Commission reworked the recycling regulatory framework to implement a Permit by Rule (PBR) concept. This concept has encouraged produced water recycle and reuse and may be applicable to other operations in the oil field such as facility and pit permits.
- Prepare a roadmap for beneficial reuse outside the oil and gas industry: The industry should maintain its focus on operations and sound produced water management in the oilfield. The government’s role can be to encourage uses outside the oilfields by updating regulations, sponsoring research and issuing permits for pilot studies. Also, a solid and repeatable funding mechanism to defray the cost of these academic and scientific studies would benefit all.
- Develop incentive mechanisms to lower produced water treatment costs: Recycling practices have the potential to conserve water, improve supplies and eventually make beneficial reuse possible. For these reasons, Texas should consider and study incentives for water recycling. The Texas Legislature has mentioned the need for an interim study of incentives and should pursue this work.
- Collect and provide public access to better-produced water data: Up-to-date and publicly available data about produced water production and recycle and reuse is sorely lacking. Texas should develop or encourage the development of a mechanism for collecting and reporting statewide produced water data in a way that is not burdensome to industry, and that maintains operator confidentiality. This would help the public understand the value and future of oilfield recycling. The industry should also standardize produced water terminology, reporting and disclosure.
Federal Policy Updates and Discussions:
- Update or eliminate 98th Meridian policy: Policy and procedures for federal NPDES permits differ to the east and west of the 98th meridian, an arbitrary geographic marker that bisects Texas into land roughly east or west of Dallas. The EPA must eliminate or modify this federal regulatory contrivance. This will encourage discharge applications to be considered on a site-specific and case by case basis, honoring the recent technological advances in produced water recycling.
- Institutionalize Texas and federal agency cooperation: States such as New Mexico have joined in memorandums of understanding with the EPA and participated in white papers involving produced water. Meanwhile, the EPA issued its own draft “Study of Oil and Gas Extraction Wastewater Management” in May 2019, to be finalized by year-end. These types of collaborative efforts could benefit Texas.
The maverick attitude and work ethic that created the shale revolution is alive and well on the H20 side of the equation. As the midstream industry continues to mature, produced water recycle and reuse is likely to increase. Texas needs to build on the solid foundation now in place and ensure expansion with the right statutes, regulatory framework, civil law and economic incentives.
