Water Management Called ‘Massive Headwind’ for Permian Operators

MIDLAND, Texas — Water management in the Permian Basin is a challenge “on every operator’s radar screen” as production keeps growing, the CEO of Aris Water Solutions Amanda Brock said Nov. 20 at Hart Energy’s DUG Executive Oil Conference & Expo.

“It’s certainly a massive headwind at this point,” said Brock, whose Houston-based company develops and operates produced water infrastructure in the Permian. “This basin is producing just a tremendous amount of water and it’s got to go somewhere. If you don’t have a place for the water to go, it impacts production.”

The industry is using even more water as fracking technology continues to evolve, said Robert Norton, chief commercial officer of Deep Blue, another water management company in the Permian.

“We've recently completed a triple simul frack job where we had to get 600,000 barrels a day to one location,” he said. “And to do that, you have to have amazing size and scale or a capital budget.”

The question of how to deal with produced water will require more than one answer, Brock said. Among the possibilities are expanding the reuse of fracking water, treating the water for use in agriculture and extracting minerals like lithium. Both Brock and Norton noted the concern about seismic activity linked to wastewater disposal.

Either way, Norton said, the cost of water management is going up, and that’s an opportunity for companies including Aris and Deep Blue. He said the market is realizing that the water midstream business is becoming a gathering and processing business similar to natural gas.

“It’s creating this unique environment for companies like Aris, companies like Deep Blue to aggregate other assets in the basin, partner with operators by buying their systems and really use the supply business and the ability to get 500,000 barrels of water to a certain location in exchange for these long-term dedications,” he said.