Oil and Water

When most people think of oil production, they imagine a gush of crude oil emerging uninterrupted from the ground. While this scenario is occasionally true when conventional oil fields are first drilled, it rarely lasts for long—the majority of the liquid that comes from an oil well is in fact not oil at all, but something called “produced water.” According to the Department of Energy, for every barrel of oil produced globally, there are three barrels of produced water. Here in the United States, the number is closer to 7-10 barrels of water for every barrel of oil. In the highest scenarios, the ratio can reach 50-to-1 water to oil. Importantly, shale oil production yields particularly high water-oil ratios—a phenomenon that may bring unwanted risk into the industry. So what is produced water? It is mainly saline water trapped in the reservoir rock, and brought up along with oil or gas during production. It can contain minor amounts of chemicals added during production. Unlike freshwater, produced water exists under high pressures and temperatures, and contains oil and metals. According to the Produced Water Society, most produced water contains the following, in a wide range of concentrations:
  • Dissolved inorganic salts
  • Dispersed oil droplets
  • Naturally Occurring Radioactive Material
  • Dissolved organic compounds (dissolved "oil")
  • Treatment and workover chemicals
  • Dissolved gases (particularly hydrogen sulfide and carbon dioxide),
  • Bacteria and other living organisms
  • Dispersed solid particles
Challenges associated with processing and disposing of produced water include:
  • Plugging of disposal wells by solid particles and suspended oil droplets
  • Plugging of lines, valves, and orifices due to deposition of inorganic scales
  • Corrosion due to acid gases and electrochemical reactions of the water with piping and vessel walls
  • Exceeding discharged oil concentrations
  • Growth of bacteria that plug lines and valves or result in the formation of harmful byproducts
Given the number of unfavorable impurities, treatment is expensive, and industry tends to rely on disposal over beneficial reuse. This is unfortunate, because the volume of produced water that the oil industry manages on a daily basis is truly staggering. In the United States alone, where we produce roughly 9 million barrels of crude oil per day, that’s almost 90 million barrels of produced water per day—just over one trillion gallons of produced water every year. Management Challenges Given the sheer volume of this substance that is produced, it’s worth examining where it is concentrated and how it is managed. The ratio of produced water to oil (WOR, or water-oil ratio) varies significantly by formation. For example, in 2009, offshore drilling accounted for 27 percent of U.S. oil production, but only 3 percent of produced water. Onshore, according to DOE, 98 percent of produced water is injected underground. Fifty-nine percent of that is injected into producing formations to maintain pressure and increase well output, while the remaining 40 percent is injected into other rock formations. The remaining two percent is managed through beneficial reuse and other surface disposal methods. Beneficial reuse is challenging, as the dissolved solids in produced water are hard to remove, and there is typically some level of radioactivity. Achieving even basic treatment typically involves use of physical, chemical, and biological treatment processes such as filtration, sedimentation, electrochemical treatment, nanofiltration, and chemical sanitation. According to a Devon Energy source, beneficial reuse is 50-70 percent more expensive than disposal, which creates a clear incentive for industry not to recycle. Offshore, the vast majority of produced water is dumped back into the ocean—with some regional exceptions. According to the Department of Interior, in the Gulf of Mexico area west of the Mississippi River, where elevated levels of naturally occurring radioactive material have been detected, radium must be measured if the produced water is to be discharged overboard. So why does it matter? The treatment of produced water is a major component of the cost of producing oil and gas. Wells may start out producing little water but sooner or later all oil wells produce a much larger volume of water than oil. The ability to efficiently and economically dispose of this water is critical to the success in the oil production business. Importantly, shale formations create far more produced water than conventional formations, which impacts the marginal production costs for the fracking industry. Part of this is because of the amount of water that is required to frack the well in the first place. The combination of produced water plus the water/chemical mixture used in the fracking process is called flowback. Flowback is part of why produced water levels from shale formations are so high. Bernstein Research estimates that some wells are producing as much as 90-95 percent water, which not only increases water treatment costs for producers, but also forces them to sell their oil at a significant discount, ranging from $10-30. Per Bernstein’s analysis, as oil prices have seen some declines in recent weeks, some marginal wells with high water to oil ratios are likely to become uneconomical. Produced water is already commonly used to increase pressure in existing conventional fields—but there may be another application. Some reports suggest that produced water can be repurposed, displacing freshwater used for fracking. While this still requires some base level of treatment, and there are still some technological hurdles to overcome for this approach, there are certain obvious benefits to this approach. After all, produced water is already conveniently located in the oilfield, and many of the country’s most prolific shale formations—such as the Eagle Ford and Barnett formations in Texas—are located in water-scarce regions. One company, Omni Water Solutions, has developed portable trailers that scrub produced water on-site. While it is expensive and difficult to purify produced water to the point where it can be safely discharged into the environment, or used to serve human populations as freshwater, there is hope that these significant volumes can find a useful application offsetting the industry’s increasing demand for freshwater.