WaterConsumptionBlog1

Source: ZE

Recently, I’ve witnessed the local impact that water can have on people and its potential implications for the oil and gas industry in Alberta (which I explored last week in Water Conservation, Contamination, and Alberta’s Flooding). In this blog, part 2 of 2, I’ll take a look at the “fracking” (hydraulic fracturing) industry and its relation to water conservation and contamination on a global level.

Global Water Usage

According to the United Nations’ Water in a Changing World report, “after agriculture, the two major users of water for development are industry and energy (20% of total water withdrawals), which are transforming the patterns of water use in emerging market economies.”  Around 99% of the off-stream water used comes from renewable resources in surface or ground water, with Europe and North America being the biggest users of water for industry and energy and Asia, Africa, Oceania, Latin America, and the Caribbean the heavy weight users for agriculture (UN).

WaterConsumptionBlog2

Figure 1: Annual Water Withdrawals Per Person Per Country World View, 2000. Source: UN

The limited availability of water, even renewable sources like off-stream water supplies, promotes country conflicts (like the current conflict between India and Pakistan) and creates uncertainty for the future of fracking.

Fracking is “the process of creating small cracks, or fractures, in underground geological formations to allow oil and natural gas to flow into the wellbore and thereby increase production” (according to the fact sheet provided by the Colorado Oil and Gas Conservation Commission (COGCC)). According to the COGCC, water is needed to fracture formations by injecting high-pressure fluids that consist of 90% water, 9.5% sand, and 0.5% chemicals. This source of energy creation is directly linked to amount of water that is available for use. (For a full In Depth look at water and energy, see our article, Water Dilemma: Conservation or Trading).

A Closer Look: Fracking in the United States & Contamination

According to the U.S. Center for Disease Control and Prevention (CDC) “contaminated water is a major cause of illness and death, water quality is a determining factor in human poverty, education, and economic opportunities.” With worldwide water quality declining (due to factors like “population growth, rapid urbanization, land use, industrial discharge of chemicals, and factors resulting from climate change” (CDC)), the use of available water becomes a contentious issue when one looks at the growth of fracking and its importance in countries like China, Argentina, and the United States.

Oil extraction by fracking in the United States could reach three million barrels per day by the end of the 2020, which is over 50% of the current domestic crude oil production (compared to 200,000 barrels per day in 2000), according to IHS Cambridge Energy Research Associates. The chemicals and the run-off from these wells can contaminate water supplies, cycling problems back into the industry and affecting its own future. In 2011, the U.S. Environmental Protection Agency published a report that found high levels of methane and toxic hydrocarbons in domestic and deep groundwater supplies after EnCana’s fracking of vertical wells. Keeping the water sources contamination-free and conserving renewable water sources will continue to be important issues for the future of the industry. (For more on fracking in the United States, see The Global State of Fracking: Who’s Playing Catch UP with the U.S.?)

Water as a Commodity & Its Data

Finally, two other implications have arisen out of the changing state of global water use and availability. It has created a marketplace for traders to buy and sell water as a derivative in the midst of all the social, political, and environmental upheaval and it has increased the need for quality water data – and, some way to make sense of that data. (Keep reading about the derivative side of water consumption in our blog, Water Derivatives: How Soon and How Many?)

As the use of water in the energy industries increases, so too will the number of data points being collected and analyzed in our data management software solution, ZEMA. To learn more about what our ZEMA software can do for your company’s data management needs, book a free demo.