Pro/Con: How should water be used?
Sept. 23, 2012 at 4:23 a.m.
Updated Sept. 24, 2012 at 4:24 a.m.
THE CON SIDE
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How should water be used?
Oil and gas production continues to increase in South Texas.
Eagle Ford Shale drilling permits have increased from 26 in 2008 to 2,957 in 2012 through August, according to the Railroad Commission of Texas.
To meet the demand by oil and gas companies, some cities are selling water to the companies drilling in their areas.
Combine the increased need for water with the continuing drought conditions - which as of mid-September ranged from abnormally dry to moderate drought, according to the National Weather Service - and the question arises: Should municipalities relinquish any of this valuable commodity or reserve its use for residents?
Water is used in association with many oil and gas activities.
Fresh water is used in oil and gas well stimulation, including fracturing. Hydraulic fracturing consists of pumping into the formation large volumes of fresh water that generally has been treated and contains sand.
The volumes injected during hydraulic fracturing treatment can range from 70,000 barrels in a vertical well to more than 90,000 barrels in a horizontal well, according to the Railroad Commission of Texas.
The city of Cuero is among several towns in the Crossroads that sells water to oil and gas companies drilling in its area.
Proceeds from the sales, which average a minimum of $20,000 a month, go into the water department's budget, said Cuero City Manger Raymie Zella.
"The additional revenue for the water department allows us to do more improvements to our water system and get capital improvement projects done sooner," Zella said.
It's the revenue stream generated by water sales that even those outside city governments see as beneficial.
"The revenue can help financing necessary upgrade or overhaul of the water distribution system, which is known in many cities to be in poor shape," said Jean-Philippe Nicot, a research scientist with the Jackson School of Geosciences at the University of Texas at Austin.
"That would help fix the leaks in the system that sometimes represent 20 to 30 percent of the water consumption and maybe offset the water volume purchased by the industry."
The city of Yoakum is also selling water to oil companies.
"We sell water, by bulk to be hauled in trucks, to multiple users, most of it is to oil fields," said Yoakum City Manager Kevin Coleman. "We have an adequate supply. This generates a small amount of revenue and at least at this point does not take any resource otherwise needed by the community."
The sales generate about $5,000 to $7,000 annually that goes into the general utility fund, Coleman said. The city of Yoakum generates about $1 million annually in water sales.
The water demand from oil and gas production in South Texas is minimal, according to a January news release from Railroad Commission's Eagle Ford Task Force.
Data cited in the news release indicate that drilling and completions in the Eagle Ford Shale account for about 6 percent of the water demand in South Texas, while irrigation accounts for 64 percent and municipal uses account for 17 percent.
Railroad Commissioner David Porter said the task force has determined that water sourcing in South Texas is not a problem.
Porter said in a news release, "We will continue to study best practices for water management in the region to help mitigate any future issues."
Representatives from local groundwater districts said that if a city is selling water to oil companies, it's a good way to keep track of water use.
"When supplied by the municipalities, this use is metered and reported," said Charlotte Krause, director of the Pecan Valley Groundwater District in DeWitt County. "This allows the groundwater district to monitor the impact of this use on the aquifer and include this use in the implementation of its management plan and the state water plan."
Zella said the city of Cuero is monitoring its water supply.
He said selling water to companies has not hurt the city's water supply for its residents and would stop the sales if it ever did.
Hallettsville, which has averaged about $40,000 a year in bulk water sales during the past decade with some oil companies as customers, keeps its citizens needs in mind first.
"Bulk water sales are the first to be cut off if water levels drop to conservation levels or there is a problem with a well or the distribution system," said City Administrator Tom Donnelly.
In Yoakum, additional revenue soon might be gained from another water source, one that is being promoted for increased use in the oil and gas industry.
"The city has entered into a letter of intent to sell its reclaimed wastewater (treated effluent) to a firm whose goal it is to collect the effluent and sell to oil field users," Coleman said. "No firm plans or contract are yet in place though."