A cost-benefit analysis of produced water management opportunities in selected unconventional oil and gas plays

Unconventional oil and gas production in North America has grown enormously over the past decade. The combination of horizontal drilling and hydraulic fracturing has made production from shale and other unconventional resources economically attractive for oil and gas operators, but has also resulted in concerns over potential water use and pollution issues. Hydraulic fracturing operations must manage large volumes of water on both the front end as well as the back end of operations, as significant amounts of water are coproduced with hydrocarbons. This water--often called flowback or produced water--can contain chemicals from the hydraulic fracturing fluid, salts dissolved from the source rock, various minerals, volatile organic chemicals, and radioactive constituents, all of which pose potential management, safety, and public health issues. While the long-term effects of hydraulic fracturing on aquifers, drinking water supplies, and surface water resources are still being assessed, the immediate impacts of produced water on local infrastructure and water supplies are readily evident. Produced water management options are often limited to underground injection, disposal at centralized treatment facilities, or recycling for future hydraulic fracturing operations. The costs of treatment, transport, and recycling are heavily dependent on local regulations, existing infrastructure, and technologies utilized. Produced water treatment costs also change over time during energy production as the quality of the produced water often changes. To date there is no publicly available model that evaluates the cost tradeoffs associated with different produced water management techniques in different regions. This study addresses that gap by characterizing the volume, qualities, and temporal dynamics of produced water in several unconventional oil and gas plays; evaluating potential produced water management options, including reuse and recycling; and assessing how hydraulic fracturing and produced water issues relate to the larger water-energy nexus. Specifically, this study develops a play-specific model to compare the decision factors and costs involved in managing produced water. For example, when transport distances to a wastewater disposal site are far enough, options for recycling water become more favorable, depending on the characteristics of each play. This model can provide policymakers and other interested parties with cost estimates of different water management options, including a better understanding of the costs and opportunities associated with recycling produced water. This work provides a cross-play assessment of produced water management options and costs and could serve as the foundation for more detailed analyses of opportunities to minimize hydraulic fracturing's impacts on freshwater resources.