Source: Tom Fox
Oil and Gas Investor
By Susan Klann
Friday, June 23, 2017
Horizontal drilling and upsized completions have
fast-forwarded the oil and gas industry’s demand for water. At the same time,
the lower for longer oil price recovery has placed ever more pressure on
operators to cut costs, including for water, according to a new report, “Water
for U.S. Hydraulic Fracturing,” from Bluefield Research.
The report forecasts that at a flat rig count of 650,
20.8 billion barrels (bbl) of water will be required for hydraulic fracturing
from 2017 through 2026. Last year, fracturing consumed more than 1.3 billion
bbl of water and produced 574 million bbl of water for disposal. Investors and
industry players are positioning to play a role in this growing water market.
With operators drilling faster, and employing longer
laterals, completions now require as much as 12 million bbl of water per
frack—triple the volumes of five years ago, the Bluefield authors said. They
project that water management, including water supply, transport, storage,
treatment and disposal, will total $136 billion from 2017 to 2026 for the U.S.
hydraulic fracturing sector.
High reuse rates in the Marcellus and scaling Permian
activity—where water per frack ratios are the highest—drove treatment spending
to about $198 million in 2016 with an annual spend of $307 million expected for
2017.
“Demand is rising exponentially, particularly in West
Texas,” the authors said, “because of increased water volume per frack and an
almost 30% reduction in time required to complete a well.”...
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