November 20, 2012

The Wall Street Journal

Drillers Begin Reusing Frack Water

Energy Firms Explore Recycling Options for an Industry That Consumes Water on Pace with Chicago

Companies are racing to find ways to recycle the water used in hydraulic fracturing, chasing an emerging market that could be worth billions of dollars.

From energy industry giants Halliburton Corp. and Schllumberger Ltd. to smaller outfits such as Ecologix Environmental Systems LLC, companies are pursuing technologies to reuse the "frack water" that comes out of wells after hydraulic fracturing, or "fracking"—the process of using highly pressured water and chemicals to coax oil and gas out of shale-rock formations.

At fracking sites such as this one in Pennsylvania, companies have to haul water hundreds of miles to the nearest injection wells.

While the recycled water can't currently be cleaned up enough for drinking or growing crops, it can be cleaned of chemicals and rock debris and reused to frack additional wells, which could sharply cut the costs that energy companies face securing and disposing of water.

Some companies are finding it is still cheaper in many parts of the U.S. to inject the wastewater deep underground instead of cleaning it, which has slowed adoption of recycling technology. But experts say that is likely to change as fracking grows.

At Schlumberger, which predicts that a million new wells will be fracked around the world between now and 2035, reducing freshwater use "is no longer just an environmental issue—it has to be an issue of strategic importance," Salvador Ayala, vice president of well-production services, told a recent conference.

Though fracking has brought U.S. oil production to its highest level in more than 14 years and produced a glut of natural gas, it requires huge amounts of water, raising costs for energy companies and spurring opposition from environmental groups at a time when some states are suffering through droughts.

It takes between 70 billion to 140 billion gallons of water to frack 35,000 wells a year, the industry's current pace, according to a 2011 report by the Environmental Protection Agency. That is about the same amount consumed every year by Chicago or Houston—and the price tag for securing that much water can be substantial.

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