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Texas Senator Charles Perry letter regarding Texas’ future water supply

Aug 10, 2020

Texas Alliance President sent the following letter to Texas Senator Charles Perry, which included comments regarding the interim charge related to Texas’ future water supply. The Alliance has encouraged our members to offer comments and showcase areas where operators are deploying produced water recycling technology.

August 6, 2020

The Honorable Charles Perry
Texas Senate
P.O. Box 12068
Austin, Texas 78711-2068

RE: Senate Water & Rural Affairs Committee
Future Water Supply Interim Charge

Chairman Perry and Committee Members –

The Texas Alliance of Energy Producers (the Alliance) appreciates the opportunity to comment on the committee’s interim charge related to Texas’ future water supply. With over 2,600 members, the Alliance is the largest state oil and gas association in the US. Our members hail from nearly 30 states and 300 cities. We represent the upstream (exploration and production) segment of the oil and gas industry; our members are oil and gas operators/producers, service and drilling companies, royalty owners, and a host of affiliated companies and industries in Texas and beyond.

Given our membership’s role in the oil and gas industry, the Alliance has a unique perspective on the future water supply of Texas, particularly as it relates to produced water (water produced as a byproduct of oil and gas production). In addition to our membership’s operational understanding of produced water’s role in Texas, the Alliance also has a keen appreciation for this discussion due to the publication of a white paper we produced in conjunction with the Independent Petroleum Association of America last fall titled Sustainable Produced Water Policy, Regulatory Framework, and Management in the Texas Oil and Gas Industry: 2019 and Beyond, which can be found HERE. This white paper explores the challenges of produced water management and improvements in technology, the current statutory and regulatory framework impacting this sector, and makes recommendations on how to improve upon existing laws and practices.

As we have seen the shale revolution take hold in Texas over the past two decades, the demand for water for hydraulic fracturing and the increased production of water from oil and gas reservoirs has led to an unprecedented growth in water management and water midstream businesses. Historically, used hydraulic fracturing fluids and produced water were simply injected into disposal wells and industry by-and-large relied on fresh water for the hydraulic fracturing process. Texas took an early lead in recognizing the potential value of recycling and began updating its regulatory framework in 2013. Through industry innovation, supported by statutory and regulatory reforms, Texas has seen more and more oil and gas producers shift to recycling of their fluids and produced water for reuse in hydraulic fracturing operations as opposed to disposing of all of the fluids.

The technologies used in recycling and reuse remain relatively expensive compared to straight disposal costs which has limited wider and faster adoption of these technologies. This committee is aware of the opportunity produced water can have for meeting the state’s growing demands for water, but it is worth repeating. As our white paper points out, statewide volume of produced water was more than 8.5 billion barrels of water in 2017 and some projections show that by 2023, over 15 billion barrels per year of produced water will be produced statewide in Texas. As Texans, we want to do everything we can to encourage that water to be added to our useable water inventory.

The Alliance fully understands that the COVID-19 pandemic and other economic stresses on our budget will limit policy discussions and options available to the state at this juncture. However, we believe the upcoming legislative session provides an opportunity to outline the roadmap for utilizing produced water in Texas. The legislature took an important step last legislative session by directing the Texas Commission on Environmental Quality to seek delegation of authority from EPA over oil and gas discharge through the National Pollution Discharge Elimination System (NPDES) program. This recommendation, which is on track to be completed prior to January 2021, is an important mile marker in improving how state and federal agency cooperation can foster continued improvements that lower additional regulatory burdens.

In closing, we encourage the committee members and all stakeholders in the discussion regarding produced water in Texas to read our white paper to understand more fully our recommendations on how we can achieve a more sustainable future for produced water management. The Alliance applauds this committee for taking these issues so seriously and we look forward to working with all of you in the upcoming legislative session toward a resolution that will help Texas more fully realize the potential benefits of produced water and ensure our vibrant Texas economy continues to lead the globe.

Sincerely,
Jason Modglin
President