Saltwater production is a necessary by-product of oil production. Only in rare cases do you get 100% oil flow from a well, and even then, a reservoir will ultimately “water-out,” making further production pointless and uneconomic. The U.S. Permian basin has been the source of most growth in U.S. daily oil output for the last decade, if not a little longer. As the EIA graph below illustrates, other shale reservoirs are in decline or barely keeping even with past performance.
What hasn’t gotten a lot of attention until recently is the amount of water produced along with the oil and gas. It is a prodigious amount, ranging from 3 or 4, to as much as 12 barrels of water per day along with each barrel of crude. In its raw form, produced water must be disposed of or recycled in some way due to its salinity, which can be several times that of seawater.
Disposal down injection wells into permeable strata has been the preferred method for decades due to low costs, relative to the various recycling technologies available. The picture below taken from a WSJ article in April of this year, highlights the exponential growth in the number of these injector wells since 2010.
Several troubling aspects of this proliferation of injection wells to handle the 3.2 billion barrels of briny water the article mentions that were disposed of through down hole injection just in the Delaware sub-basin of the Permian, have manifested themselves over the past few years. They include surface subsidence, seismicity, and the effect that this injected water has on reservoir pressure in the injected zones. Increased seismicity is the impact getting the most attention currently, thanks to the increasing intensity of injection water induced temblors.
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Christine Guerrero, Petroleum Engineer and Strategic Advisor at Octane Investments, commented, in a Webinar entitled, The Permian’s Watershed Moment, that there was a produced water “Tsunami,” in the Permian with water production currently of 19 mm BoWPD. Even with oil firms converting much of their frac water needs to recycled brine, this 19 mm BoWPD is far in excess of what the industry can consume in daily frac operations. As much as two-thirds of this water must then be reinjected-often into shallow reservoirs that can pressure up, and lead to the enhanced seismicity, discussed by Christine in her presentation.
Citing Energy Information Agency-EIA, projections of 27% growth in oil production over the next five years, Christine noted that “operators will have to find other ways to manage higher volumes of water, at significantly higher cost, in order to maintain the Permian’s global production dominance.” She concludes that “Seismicity is our Canary in the Coal Mine.”
What happens with produced water?
As noted the production of highly saline water with crude oil is a fact of life and part of the process. At lower levels of drilling intensity-pre-2010, disposal down injector wells was really the only option and created no real issues. As drilling activity began to increase in the 2010’s with the shale revolution, oil companies recognized that drilling practices would have to be adapted to the new reality.
Chief among these changes was the trend toward converting frac fluids base brines to these produced brines. Major operators like Chevron, (NYSE:CVX) have made big steps toward recycling produced brines into their operations, as have others. But that just scratches the totality of the problem.
With about 5,000 new wells being drilled in the Permian on an annual basis, the industry can then absorb about 6.5 mm BoWPD into its fracturing operations. That still leaves about 12.5 mm BoWPD that must be disposed of, shifted to other locations by pipeline or truck, or treated to a standard where it could be used in agriculture.
Reinjection has been historically attractive to operators because it is the least expensive method to deal with produced brine that is in excess of what the industry can absorb. The increasing seismicity now seen in the Permian is going to require new solutions for much of this brine. As noted in the WSJ article, the Texas Rail Road Commission-TRC following a 5.4 magnitude earthquake in Reeves County, imposed injection restrictions in the area. In addition to increased seismicity, there are legitimate concerns about over-pressured disposal wells breaking down seals in older wells, allowing hydrocarbons to leak into and contaminate adjacent freshwater aquifers. This concern was discussed in the linked WSJ article-
“A growing concern for residents and scientists is that wastewater could migrate into the aging, unplugged wells that litter the Permian by the thousands and…
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