The oil and gas industry is growing, and technology related to the field is growing along with it. Despite impressive technological advances in the industry, one major problem has yet to be solved: what to do with the wastewater produced. Stringent environmental regulations along with trucking and disposal costs present major barriers to dealing with the wastewater, which is a byproduct of oil and gas production. Water sharing and reuse is the only viable option for an industry that depends on water for survival. What the industry has lacked is a technology that makes the sharing and reuse of water as simple as a mouse click or, for example, a post on an Internet auction site like eBay. One company has created such a technology, and it has the potential to revolutionize water use throughout the energy industry as a whole.
ShaleXchange is an online map-based platform that facilitates the posting, bidding and exchange of water used and/or produced from oil and gas operations along with various other items related to the oil and gas industry. The platform also allows users to electronically track and manage wastewater and other waste produced in oil and gas drilling, completion and production operations. According to president and co-founder Alex Murichu, this online platform allows for the sharing and exchange of wastewater for reuse along with other water sources such as water withdrawal points, etc., letting producers manage water as an asset instead of a cost.
“It enables intercompany exchange through a robust contracting process, which helps to minimize transaction risks for operators,” Murichu said.
The platform is map-based, and this gives a visual feel of where the available water assets posted on the platform are in relation to a producer’s operations in the field. Trucking costs are significant when transporting wastewater. Using the platform, oil and gas producers with wastewater are able to be matched with other producers in close proximity seeking water for their operations, thereby reducing the need for freshwater and minimizing movement and disposal of wastewater. Wastewater sharing has the potential to reduce operating costs and increase efficiency for individual companies and for the industry as a whole. It also encourages reuse and helps to reduce the amount of truck traffic on roads, thereby helping producers further reduce their environmental footprint.
Wastewater reuse
Wastewater is no longer just an environmental or public relations issue for oil and gas companies; it has a significant effect on operating costs. Reducing the cost associated with disposal of wastewater can be a source of competitive advantage. As operators continue to strategize on how to reduce freshwater use and make recycling initiatives more economical, getting the wastewater to the right place at the right time while minimizing cost remains a great challenge. By facilitating exchange of wastewater between operators in close proximity, this system makes it easier to run cost-effective wastewater reuse programs by minimizing storage and transportation costs.
As drought conditions continue to occur in much of Texas and other surrounding states, producers must consider the long-term implications of continued freshwater use on their operations. Farther east, in states such as Pennsylvania, West Virginia and Ohio, water is relatively plentiful, but there are increasing restrictions on freshwater sources and growing concerns by regulators, lawmakers and the general public on water usage and disposal by the oil and gas industry.
ShaleXchange enables companies to expand their water sourcing options. Oil and gas producers can take advantage of alternative wastewater sources such as produced and flowback water from other producers and treated coal mine drainage from coal companies. As a result, producers can mitigate the impact of drought conditions and/or restrictions of freshwater sources on their operations by curbing their freshwater demand. “Technology is playing and will continue to play a significant role in operating efficiency, especially in a sensitive price environment,” Murichu said. “More emphasis will be placed on technologies that reduce cost and improve efficiencies. Water sourcing and wastewater disposal are big cost drivers for producers, and for this reason our platform could help minimize these costs in addition to providing environmental benefits.”
Logistics challenges
ShaleXchange was inspired after the founders saw firsthand the cost and challenges associated with management and disposal of produced and flowback water in the Marcellus. Murichu saw the potential cost savings by enabling producers to exchange wastewater. Since then he and his co-founders Jack Shaffer, Tom Adkins and Amber Bostic have been working on a way to address the logistical challenges of flowback/produced water reuse with the goal of reducing costs.
“With our platform, producers can search/share wastewater information and literally negotiate and exchange quantities of wastewater with other interested producers,” he said. “The technology enables this collaboration by posting available/excess capacity that is accessible to operators working in the same vicinity and by enabling online negotiation/transaction capabilities. Our system also allows producers to consider expanded water resource management options and makes it easier to leverage new wastewater reuse options that can minimize transportation, storage and treatment expenses.”
ShaleXchange has already received considerable interest from industry participants, many of which have already signed up to become users. The company is currently working on expanding to other basins such as the Bakken in North Dakota and Montana, the Denver-Julesburg Basin in eastern Colorado, the Permian Basin in west Texas and southeastern New Mexico and the Eagle Ford in south Texas, where there is an even greater need to increase the rate of wastewater reuse.
The need for this type of technology cannot be underestimated. The ability of oil and gas companies to align their water stewardship and business growth strategies will be critical for survival. Producers across the country must adapt their operations to survive in the energy industry, where sustainability is at an increasing value. Water shortages and environmental regulations threaten the viability of oil and gas production if reuse is not embraced to its full potential. This technology simplifies the reuse and eliminates the obstacles that have kept producers from exchanging wastewater.