American Oil and Gas Reporter - August 2023 - 79

SpecialReport: Hydraulic Frac Tech
Diamondback Energy) gave a presentation
titled " The San Andres Problem, " which
highlighted rising pressures in the formation
commonly targeted for shallow
disposal in the Midland Basin. The team
laid bare an issue that people rarely discussed
openly: In some places, rising
pressures create sizable and costly risks
to new oil wells.
The resulting conversation raised
questions the industry still grapples
with. If pressures continue to rise in
injection formations, how much capacity
remains, where is it and what can be
done to mitigate the related risks? Maximizing
produced water recycling and
targeting deep disposal stand out among
the recommendations.
The seismicity issues the Permian
Basin has experienced for the past several
years limit how widely deep disposal can
be deployed. Between 2017 and 2022,
the number of earthquakes in the basin
with magnitudes greater than 2.5 rose
1,500%, from 42 in 2017 to 671 in 2022.
During the same period, the basin had
two quakes with magnitudes above 5, an
intensity level that can cause structural
damage to buildings and infrastructure.
Regulators and researchers linked the
seismicity to injection in deep SWDs,
prompting calls to curb disposal activity.
The response was quick, with Texas
forming Seismic Response Areas in 2021
and New Mexico establishing a corollary.
SRAs are large regions delineated based
on recent earthquakes above certain magnitudes.
They tend to have subareas with
different constraints on injection, ranging
from cessation of injection in particularly
high-risk locations to reductions in capacity
or onerous permitting requirements in
others. Collectively, these restrictions affected
more than 200 SWDs in New
Mexico and Texas, taking 1.3 MMbbl/d
in injection capacity out of play.
While Texas established a process for
the industry to convene and develop management
plans for SRAs, New Mexico
took a much more draconian approach,
requiring the nearly immediate cessation
of SWD operations in certain cases. Although
seismicity seems to be abating,
the lingering threat of future capacity
loss from earthquakes further motivates
operators to seek an alternative to disposal,
including the use of third-party disposal.
Investors' expectations that oil and
gas companies reduce their environmental
impacts and address climate-related risks,
including access to water, have reinforced
recycling efforts. According to the World
Resource Institute's Aqueduct tool, which
is used in most climate risk disclosures,
a significant portion of the Permian Basin
resides within areas of high or extremely
high water stress.
Large, publicly traded companies
have been especially responsive to water
access concerns. In New Mexico, Devon
Energy has met 86% of its completion
water needs with produced water so far
in 2023, according to available data.
While recycling data remains opaque
for much of the Permian Basin, an audit
of sustainability reports and other public
disclosures indicates a general shift away
from freshwater use to a blend of produced
and brackish water, with most
companies seeking to ramp up produced
water recycling.
VortexPrimeTM
Direct-drive, Natural-gas Powered
Turbine Technology
CHANGE THE FACE OF FRAC
* Up to $18 Million in Fuel Cost Savings Annually
* 40% Lower Emissions
* Average of 95% Waste Stream Reduction
* 55% Smaller Footprint
* Ideal for Simul-frac
CatalystEnergy.Tech/aogr
AUGUST 2023 79
http://catalystEnergy.tech/aogr
American Oil and Gas Reporter - August 2023

Table of Contents for the Digital Edition of American Oil and Gas Reporter - August 2023
