An oil and gas water treatment company purchased produced water infrastructure from Colgate Energy bought from Occidental Petroleum last month.
Houston-based WaterBridge Holdings announced the deal Sept. 10 that saw the company enter a 15-year produced water management agreement for all of oil producer Colgate’s acreage in the Delaware Basin on the Texas side of the shale play in Reeves and Ward counties.
Included in the acquisition were 10 water handling facilities for midstream operations able to handle about 100,000 barrels per day along with about 50 miles of pipelines to move produced water throughout the basin west Texas shares with southeast New Mexico.
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The acreage Colgate acquired from the Oxy deal joined assets previously acquired by Colgate from Luxe Energy, meaning a total of 86,100 operated acres of produced water assets will be managed by WaterBridge for Colgate.
After the transaction closes, WaterBridge will have a total of 600,000 acres operated for 20 oil and gas producers throughout the Delaware Basin and the western side of the greater Permian Basin which spans from the Carlsbad area in New Mexico to Midland, Texas.
Basin-wide, WaterBridge has the capacity to handle 2.1 million barrels per day for reuse and 959 miles of pipelines to redeliver water from 97 facilities.
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“Colgate’s decision to expand their relationship with WaterBridge further validates our position as the water solutions provider of choice in the Delaware Basin,” said Jason Long, WaterBridge chief executive officer. “This transaction further enhances our ability to manage and distribute over two million barrels per day of produced and recycled water across our Permian platform.”
David Capobianco, CEO of WaterBridge parent company Fiver Point Energy said the company sought to grow its presence in the prolific Permian Basin region as producers like Colgate continued to grow their operations.
“Five Point and WaterBridge have built the leading water solutions platform in the Permian by continuing to support the success of our customers,” he said. “We are excited to strengthen our relationship and to further expand our operations to support Colgate’s growth in the region.”
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As more unconventional wells, those that use hydraulic fracturing and horizontal drilling, were added to the region, greater interest was shown for the higher volumes of water produced during operations in the arid region.
Researchers recently began studying how produced water, a combination of flowback and formation water brought to the surface with crude oil and natural gas, could be used to solve water scarcity.
Research suggests expanding use of oil and gas wastewater
In New Mexico, a research consortium between the State and New Mexico State University was convened by Gov. Michelle Lujan Grisham in 2019 to study the potential for use of produced water outside of oil and gas, with results of the multi-year study pending.
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A Sept. 8 study published by the California Regional Water Quality Control Board based on a five-year study found little health or environmental impacts to using produced water on agricultural crops in central Kern County, California.
That region was the only in the world already using produced water to irrigate crops, the study read, and it recommended increased monitoring and more requirements for water to permits to allay environmental and public health concerns.
While the study was confined to that region, it was one of the first in the nation to indicate produced water, often high in brine and other chemicals associated with oil drilling, could be safe for use by the agricultural industry.
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“Concern that severe drought may become more common in the future has increased interest in using unconventional water sources for irrigation,” the study read. “Oil and gas ‘produced water’ is an unconventional water source that has potential for agricultural use because of the proximity of some oil and gas fields to agricultural lands.”
Researchers admitted there were concerns for using produced water on crops that would ultimately be consumed by humans, as the water can contain chemicals and contaminants unfit for human use.
“However, environmental advocacy groups and other members of the public have raised questions regarding the safety of reusing produced water as a source of irrigation,” read the study.
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To determine the extend of such dangers, the study first identified the chemicals using in oil production in the area, studied their toxicity levels in various crops and soils and implemented a monitoring program in collaboration with producers and users of the water.
Researchers also contended more monitoring and studies were needed into the extent of chemicals from produced water found in soils and crops over a longer period than the study was conducted, and that more research into soil and water sampling was needed.
“There were no findings from crop sampling to indicate a food safety or public health concern related to the reuse of produced water for irrigation in this region,” the study read.
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Despite continued research on the potential for produced water to be used to address water scarcity across the U.S., New Mexico environmentalists argued it was “toxic” waste that would never be safe for human use or consumption outside of extraction.
“Climate change is ravaging New Mexico, leading to more severe droughts and water shortages. In response, Governor Michelle Lujan Grisham is endorsing the use of the oil and gas industry’s toxic wastewater to replenish drinking water supplies, irrigate crops, and fill rivers,” said Rebecca Sobel with WildEarth Guardians in a statement.
“Her policy position is an extremely reckless approach to regulating the fossil fuel industry and stands to leave New Mexico’s diminishing water supplies poisoned and unusable.”
Adrian Hedden can be reached at 575-618-7631, achedden@currentargus.com or @AdrianHedden on Twitter.