AOGR Article: New Logistics Solutions Reduce Financial, ESG Costs Of Produced Water Disposal

HOUSTON–Producers in the Permian Basin shoulder the burden of safely moving produced saltwater from producing wells to injection wells. The burden increases each day, as water-to-oil ratios (WORs) grow with every new well pad and as legacy horizontal wells journey down the decline curve.

While state regulatory reporting data for produced water is not exact, estimates suggest that the average WOR across the basin ranges between 1:1 and 4:1, with the highest ratios topping out at 10:1 in parts of the Delaware Basin. The utility of produced water is constrained by the tight rock from which it is produced, limiting opportunities to repurpose it for enhanced oil recovery and waterflooding. As a result, the bulk of Permian-produced water makes its way to injection wells at varying depths for disposal. Permian water disposal is a multibillion-dollar industry, and it is only getting bigger.

Supporting the movement and disposal of salt water is an extensive and continuously evolving infrastructure, from a labyrinth of polyethylene gathering lines and pumping stations to ever-present fleets of trucks that pack the roads of West Texas and Southeast New Mexico. Increasing production intersects with increasing water disposal costs at a point where the break-even cost for new wells may render some portions of the basin uneconomic unless the region sees a step-change in how efficiently water can be moved, disposed of, recycled, and reused.

For an increasing number of producers, the trend has been to jettison their water management activities and completely outsource dispatch, fleet management, and the associated general and administrative, and technology costs. Instead, they are leveraging the economy of scale of midstream service providers to reduce their infrastructure capital and water management costs.

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