Jun 19, 2011

Water Is the New Texas Liquid Gold

BuisnessWeek - The bottom line: A record drought in Texas is boosting water prices and competition between agricultural and energy interests over the commodity.

The water crisis in Texas, the biggest oil- and gas-producing state in the U.S., highlights a continuing debate in North America and Europe over fracking's impact on water supplies. Environmentalists say the method poses a contamination threat, while farmers face growing competition for scarce water.

Fracking is a 60-year-old method of shattering rocks to unleash oil and natural gas with high-pressure jets of sand- and chemical-infused water. In the past decade, the technique has been refined and coupled with new ways of drilling sideways through oil-rich shale formations, spurring an onshore exploration boom, says Robert Ineson, senior director of global gas at researcher IHS CERA.

"It's a heavy industrial activity with massive amounts of water and chemicals."
The Eagle Ford's peculiar geology means each well fracked requires an amount of water equivalent to that used by 240 adults in an entire year for cooking, washing, and drinking. A study by the Texas Water Development Board and the University of Texas at Austin's Bureau of Economic Geology estimates fracking-water demand in the area will jump tenfold by 2020 and double again by 2030. "This is not the drilling your grandparents knew in West Texas," says Sharon Wilson, an organizer for Earthworks' Oil & Gas Accountability Project, which lobbies for tougher regulation of oil drillers.

For now, local water departments, farmers, and oil drillers near Laredo are relying on water from two reservoirs and underground aquifers filled by last summer's tropical storm season. But that won't last forever.