Five things I learned at the PWS Seminar 2020

Some key takeaways from the Produced Water Society Seminar 2020 in Houston, Texas

1. Many are interested in a common water quality spec, but there’s not much consensus around what it should be or how to get to there.
Water services providers have the challenge of managing produced water, the quality of which can vary depending on where and when it was produced. That challenge is compounded by the need to meet producer-set specs for recycled water, which are rarely the same, though sometimes close. It’s clear that a common spec could lead to simplified water treatment, reduced operating costs and higher recycling rates. However, many questions must be answered before the industry can coalesce – a spec should be applied to water at point of sale, but are other specs needed for conveyance or longer-term storage? Should the goal be a standard or is a guideline a better option? Who should take up this endeavor?
2. The idea of beneficial reuse of produced water is gaining traction in the west.
This year’s seminar was abuzz with the term “beneficial reuse,” signifying that the concept is gaining traction. We’ve known for a long time that it is technically possible to treat produced water and reuse it outside of the oil & gas industry as we do with other wastewater streams, but in most places certain hurdles – the economics of advanced treatment, public and regulatory resistance – have rendered beneficial reuse impractical. With the industry now facing a wave of produced water and restrictions on disposal options, beneficial reuse could be a great solution, especially in water stressed areas like the Permian Basin of New Mexico and Texas, or California’s Central Valley. Representatives from academia, federal and state governments, and the private sector all seemed enthusiastic about the possibilities.
3. As the Middle East looks to shale, lessons can be learned from the US experience.
During the R&D needs panel discussion, Hani Al Khalifa, president of the Produced Water Society’s Middle East chapter and senior operations advisor at Saudi Aramco, commented that the general perspective of that region is that unconventional development requires freshwater. Being more seasoned in shale development, US producers have already moved away from that thinking and are focusing on alternative water resources for hydraulic fracturing. Al Khalifa said operators in the water-scarce Middle East need to learn from the US experience and adopt a produced water recycling approach.
4. ESG is on everyone’s minds.
Many of the presentations and panel discussions at this year’s event touched on the growing importance of environmental, social and governance (ESG) initiatives as part of overall business strategies. In his keynote address, Solaris Water Midstream CEO Bill Zartler explained that investors were looking increasingly at ESG because of a belief that “doing the right thing results in better financial resources.” During the ‘HSE and ESG for Water Sustainability panel’, Valerie Banner – Exterran’s senior vice-president, general counsel and secretary – said that, right now, environmental considerations are taking a front-seat in ESG programs and there should be an effort to assess what other technologies are needed to further reduce environmental footprints.
5. The outlook for most US oil & gas growth is a bit grim, but water services providers can help.*
North American exploration & production spending in 2020 will be reduced, while spending in the Middle East is expected to rise. US production growth is forecast to decline as operators strive to work within free cashflow. Shale activity will likely see stagnation in 2020, while offshore investment is projected to become relatively more attractive. According to James West, senior managing director and fundamental research analyst for Evercore ISI, even in this challenged market water services providers can find opportunities, especially as the transformation of the water management sector will help improve the economics of shale development.
*This analysis was made prior to the severe impact the virus’ global spread has had on markets in the past couple of weeks. Negative effects are now likely to be deeper and more prolonged than previously predicted. Water in Oil intends to explore this topic in a later issue.