Produced Water:Beneficial Consequences &Water Treatment Market Opportunities

1. PRODUCED WATER:
BENEFICIAL CONSEQUENCES &
WATER TREATMENT MARKET
OPPORTUNITIES
ATLANTIC COUNCIL CONFERENCE
“FOSSIL FUEL PRODUCED WATER: ASSET OR
WASTE?”
WASHINGTON, D.C.
JUNE 24-25, 2013
Benjamin W. Sebree
Sebree & Tintera, LLC.
General Counsel, Texas Water Recycling
Association

2. The Oil & Gas Industry
Saved the Whales
The Automotive Industry
Saved New York City &
Recycled Produced Water
Will Help Save Texas

4.  Beginning in the 1700’s, whale oil was
used as the primary illuminant for
lamps.
 By 1830, the United States became the
pre-eminent whaling nation in the
world.
 The whaling industry reached its
height in 1856, then began to swiftly
decline.
 Why?

6.  Kerosene became
available at less than
¼ the cost of whale
oil.
 Kerosene burned
with less odor than
whale oil.
 By 1860, 40
kerosene plants were
in production.

8. 1800: NYC Population ~
30,000
1900: NYC Population ~
4.5 million
Horse Population~200K
~5 million manure
pounds per day
~1.6 million urine
gallons per day

9.  Cholera
 Typhoid
 Typhus
 Yellow Fever
 Malaria
 Mortality Rate
Skyrocketed

10.  Not Governmental
Law or Policy
 Not Regulation
 Rather: An
Unintended
Consequence of a
New Technology –
the HORSELESS
CARRIAGE

12. DECREASING WATER
SUPPLY
INCREASING
POPULATION

13.  Population is
expected to
increase from
25.4 to 46.3
million by the
year 2060
 This represents
an 82% increase

14.  Municipal water
demand is
expected to see a
73% increase by
2060
 Total demand is
expected to see a
22% increase by
2060

16.  Groundwater storage has been
steadily decreasing.
 By the year 2060, existing water
supplies are expected to decrease by
10%

19.  Precipitation is expected to decrease
by more than 1 inch by the year
2050.
 Total precipitation is expected to
decrease to 0-2 inches per year for
most of Texas.

20.  Texas is rapidly undergoing
desertification, representing a long
term climate shift towards a more
arid climate.
 The current rate is 10 miles per
year, moving east from west Texas.
 This process is indicative of more
severe droughts to come.

21.  By the year 2060, water shortages
could account for $116 billion dollars
in lost income and 1.1 million lost
jobs in the state of Texas alone.

22. An Unexpected Benefit and Market
Opportunity
Recycling Produced Water Can
Help Solve the Problem

23. CATEGORY 2010 2020 2030 2040 2050 2060
MUNICIPAL 4,851,201 5,580,979 6,254,784 6,917,722 7,630,808 8,414,492
MANUFACTURING 1,727,808 2,153,551 2,465,789 2,621,183 2,755,335 2,882,524
MINING 296,230 313,327 296,472 285,002 284,640 292,294
STEAM ELECTRIC 733,179 1,010,555 1,160,401 1,316,577 1,460,483 1,620,411
LIVESTOCK 322,966 336,634 344,242 352,536 361,701 371,923
IRRIGATION 10,079,215 9,643,908 9,299,464 9,024,866 8,697,560 8,370,554
TEXAS TOTAL 18,010,599 19,038,954 19,821,152 20,517,886 21,190,527 21,952,198
2011REGIONALWATERPLAN
STATESUMMARYOFWATERDEMANDPROJECTIONSFOR2010-2060(INACFT*)

25.  Existing water supplies are expected to
decrease 10% by the year 2060.
 Average Expected Shortfall:
2020 = 2.3 Million Acre Feet (7.5 Billion
Gallons)
2040 = 2.5 Million Acre Feet (8.15 Billion
Gallons)
 Without developing other water
supplies, during a severe drought, Texas is
expected to have an annual shortage of 8.3
million acre-feet (2.7 trillion gallons).

26. Approximate Amount of
Fresh & Brackish Water Used
per Year for Texas Oil & Gas
Production:
1,397,965,619 barrels
58,714,555,998 gallons
180,106 acre feet
(less than 1% of Total State
Water Demand)
Approximate Amount of
O&G Produced Water per
Year DISPOSED:
7,066,172,806 barrels
296,779,257,852 gallons
910,365 acre feet
(Approximately 5% of Total
State Water Demand; 2/3rd
Recycled Yields 3.3% of Total
State Water Demand AND
26% of projected WATER
SHORTAGE)

27. Texas Water Supply-Demand Gap
Market Opportunity
0
5000000
10000000
15000000
20000000
25000000
2010 2020 2030 2040 2050 2060
Acre-FeetperYear
Year
Projected Water Supply vs. Demand
Demand
Supply

29.  By recycling produced water from oil and
gas activities, a significant portion of the
projected water shortage can be addressed.
 Current produced water rates are ~7 billion
barrels per year, or 294 billion gallons.
 100% recycled produced water would meet
roughly 39% of the PROJECTED WATER
SHORTAGE in year 2020.
 More realistically, 66% recycled produced
water would meet 26% of the PROJECTED
WATER SHORTAGE in year 2020.

30.  Produced Water is an Asset.
 The Texas Oil & Gas Industry Uses Less Than 1%
of Total State Water Demand.
 But, It Can Contribute to the Hydrologic Cycle FAR
MORE than It Uses.
 Recycled Produced Water Can Help Solve the
Texas Water Crisis.
 If 2/3rds (Reasonably Achievable) of Produced
Water in Texas Were Recycled, It Would Yield
Approximately:
3.3% of Current State Water Demand
26% of Projected State Water Shortage in 2020.

31.  ASSET
 BENEFIT
 SOLUTION