Natural gas and oil business still booms during Oklahoma drought-don't wonder why there are more earthquakes

Severe drought conditions are making the process of getting clean water for oil and gas exploration longer and more expensive for Oklahoma's booming energy industry.

Several of the state's largest oil and gas companies are looking at ways to conserve and reuse water.

Devon Energy Corp. is building a plant near Geary and Calumet in Canadian County to store and reuse produced water from its natural gas wells in the Cana Woodford shale.

The company began planning the water reuse plant before the onset of the severe drought in western Oklahoma, said Jim Heinze, Devon's manager of operations for the Anadarko Basin. Once operational, it will help alleviate some of the company's demands for water in the area, he said.

"We haven't delayed any work (because of the drought)," Heinze said. "What it has caused us to do is go longer distances to transfer the water to where we need it."

The plant will include a lined reservoir that can hold up to 500,000 gallons of the flow-back water that comes out of natural gas wells during the drilling process. The water will then be filtered and trucked back to well sites in the area to be reused in hydraulic fracturing. Eventually, a system of pipelines will link the water re-usage plant and the well sites, reducing the need for trucks.

The company anticipates the first phase to become operational during the first quarter of 2012, but getting the pipeline system in place will take longer.

Oil and gas exploration companies obtain the water for drilling and hydraulic fracturing through a variety of sources, including purchasing it from farm ponds on private land. A small but growing amount of groundwater is also being used for oil and gas production in the state.

So far in 2011, the Oklahoma Water Resources Board has granted 1,548 short-term permits to use about 13,000 acre feet of water for the oil and gas industry.

Although the amount is growing, the oil and gas industry still only uses a small percentage of the state's groundwater, said Brian Vance, director of information for the Oklahoma Water Resources Board.

The amount of groundwater the industry uses in the state is very small percentage of the 12,842 long-term permits for about 6.3 million acre-feet of water for all uses the water resources board tracks, he said. About 86 percent of the state's water usage is accounted for by cities, industrial and irrigation purposes, and thermoelectric power.

The Oklahoma Independent Petroleum Association estimates the oil and gas industry will still only account for about 5 percent of the state's water usage by 2060.

One of the things Continental Resources Inc. has done to conserve water during the drought is to simply use less of it in the hydraulic fracturing process in western Oklahoma, said Rick Muncrief, senior vice president of operations for Continental Resources.

"We're reducing the amount of water we use, just as a matter of necessity," Muncrief said.

Continental Resources' operations in drought-stricken western Oklahoma are still in the exploratory phase. Most of the company's wells are far apart, making water re-usage and recycling efforts in the area uneconomical for the company, he said.

"It's still a work in progress," Muncrief said.

The company typically buys its water from farmers and ranchers, but the drought has made water more expensive and harder to obtain, he said.

The drought in Oklahoma has not had a significant effect on Chesapeake Energy Corp.'s operations in the state, but it has caused some of the company's surface water sources to be scarce in the region, delaying some well completions, said Craig Manaugh, Chesapeake's vice president of operations for the company's northern division.

The company is in the process of recycling and reusing water in its operations in Oklahoma, and has even experimented with using 100-percent recycled water in some of its hydraulic fracturing jobs.

While oil and gas companies typically need relatively clean and fresh water for completing wells, Chesapeake is also experimenting with using brackish water that contains high levels of chlorides. The brackish water can be culled from natural sources, typically below the freshwater base.

"While this water is not safe to drink, it can be used effectively in our operations, for the completion process," Manaugh said.

More at the link