Why the Global Water Shortage is a Huge Risk to Oil Producers

About 72 percent of the earth is covered in water, but 97 percent of it is ocean water, which is unsuitable for drinking. The water layer from all the oceans in the world could occupy 15,000 miles/24,000 km at an average depth of 2 miles/3.4 km. Although that may appear to be a lot of water, it isn’t, and only some of it is drinkable freshwater. In fact, less than one percent of the planet’s freshwater is readily accessible – about 30% is found in groundwater, and 70 percent is found in icecaps and glaciers. 50 percent of freshwater reserves worldwide are concentrated in six countries: Brazil, Canada, China, Colombia, Indonesia and Russia.

Water is a renewable resource, as it evaporates from the oceans to the clouds and generates rainfall that falls on land and runs into rivers and dams for human consumption, after which the waste is partially cleaned before it makes its way to the sea, starting the cycle again.

Is the amount of readily accessible freshwater enough to sustain all life on earth?

While technically, there is an adequate amount of freshwater on a global scale, climate change and the growing demand for global freshwater in recent times has led to fears of a water scarcity. Water consumption is also unequal; it is an abundant resource in some parts of the world and a scarce one in others. So in theory, the surface water on earth – comprising lakes and rivers – and groundwater, such as in aquifers, is available to meet the demands of the current population and even support population growth. However, a number of reasons, including unequal geographical distribution and unequal water consumption, have made it a scarce resource in some parts of the world and an abundant one in others.

Reasons for a Global Water Shortage

Climate Change

Climate change has a warming effect on the planet. It has made the some of the world’s hottest places even hotter. It has led to the phenomenon called Hadley Cell expansion that is causing clouds to move away from the equator towards the poles, essentially depriving equatorial regions of rainwater. Climate change effects are varied, which explains why it is also increasing precipitation in other areas, having the most impact on people who have inhabited near rivers and streams. Millions worldwide face the risk of losing their lives and/or property to river flooding annually. Populations in developing or less developed countries are at the biggest risk of water flooding and feel the impact of climate change and natural disasters more severely.

Population Growth

The demand for water is directly proportional to the increase in populations and incomes. The earth is inhabited by billions of people, and the global population is expected to keep growing. Income growth can be linked to a better standard of living and has created a bigger need for water-intensive foods and energy from fossil fuels. Population growth limits the amount of water available per person by intensifying water demand and straining the local water supply.

Loss of Natural Ecosystems

The earth’s naturally existing ecosystems play a big role in ensuring abundant and clean water. They mitigate the effects of floods and storms, filter pollutants, and regulate water supply. Plant life is necessary to replenish groundwater, helping rainwater seep into the ground by preventing it from sliding down dry ground. Deforestation, urban sprawl, and overgrazing by cattle and animals in the wild also make our ecosystems weaker and limit the benefits they can provide. Policy makers in government and business have the responsibility to preserve the earth’s natural ecosystems; unless proactive and effective measures are taken to prevent a loss of wetlands and forests, the ecological damage is likely to be a thorn in the side of global water scarcity.

Water Wastage

Human, agricultural, and manufacturing activities are contributors to water scarcity. Inefficient irrigation systems waste water; some practices like flood irrigation can cause an extra water loss of up to 35%. During times of drought, household water usage also comes under scrutiny. Other than personal habits, leaks in water pipes or faulty faucets can waste 180 gallons of water per week. Household leaks waste hundreds of billions of gallons of water every year. The issue of leaky pipes is not limited to households and offices; the poor state of water infrastructure around the world also results in a loss of billions of gallons of water per day from leaky pipes alone. As existing infrastructures are expensive to repair and replace, issues tend to be ignored until after they reach a tipping point.

Depletion of Groundwater

Around 30 percent of the water on earth is present deep underground in aquifers. Water is regularly pumped from the ground for drinking, farming, and industrial activities and processes. As groundwater is pumped more quickly than it is able to be renewed, a shortage in groundwater supply is threatening a global water scarcity crisis. This man-made impact has already been felt in India, where more than half of the groundwater wells have decreased. What makes it insidious is the fact that declines in the groundwater reserves in aquifers cannot be perceived with the naked eye.

Major Consumers of Water: Agriculture and Energy Industries

Globally, the agriculture and energy industries withdraw the largest amounts of water, at about 80 percent. Two-thirds of withdrawals globally can be attributed to agriculture, and lesser in the United States and developed economies where the proportion of water utilized for electrical power generation rises substantially compared to the proportion for farming activities.

The industrial sector, including the oil and gas industry, is responsible for less than ten percent of total water withdrawals, and in the United States and developed economies where water data is available, the sector accounts for about two percent of withdrawals. Energy and water have a symbiotic relationship; just as energy is required to provide water, water is an essential resource in generating energy. A constraint on energy places a constraint on water.

Water Consumption in the Oil Industry

Water is an essential resource for oil and gas companies. It is used to drill and hydraulically fracture or frack wells and in petroleum refining. Rocks containing oil and gas also hold water inside them, which is produced as a byproduct of extraction and known as ‘produced water.’

The water for oil production is sourced from local water sources, including rivers, lakes, and groundwater. An alternative source is brackish water, which is more saline than freshwater, but not as much as seawater. Brackish groundwater is utilized for drilling and fracking, apart from other purposes in the oil and gas industry. The United States’ brackish groundwater is around 800 times greater than the total groundwater withdrawn for agricultural, industrial, and municipal uses nationwide.

Transported by trucks to the required sites or through pipelines installed in areas with many wells, water is used as a lubricant and coolant during drilling, and also to remove the mud and rock debris resulting from the process. Fracking operations use a mixture of water and chemicals to create fractures in the rock, or a mixture of water and sand to hold the fractures in place to allow the flow of oil or gas into the well.

The produced water contains salt, chemicals, and oil residues and is disposed of underground or treated and reused. One oil well can produce anywhere from no water to more than 100 barrels of water per barrel of oil.

Water Utilization for Petroleum Refining

Water is used in oil refineries for cooling towers, as feed for boilers in steam generation, and for fire mains – a sea water supply system to put out water and for sanitary and utility purposes. Most water is consumed for cooling and feed for boilers.

The term ‘water withdrawing’ as it pertains to an oil refinery, encompasses taking in water, purifying it, using it for processes and systems, treating it, and discharging it to a local surface water body.

The modern oil refinery uses multiple processes and technologies that require a substantial amount of energy for processing crude oil into finished products. Energy production, in turn, consumes large amounts of water. The processing steps consume as much as ten percent of crude oil’s energy content, and there are also heat losses in heaters fired by oil/gas, air coolers, and cooling water heat exchangers. As per the laws of physics, heat removed from one medium is transferred to another medium. The cooling tower functions as a heat rejection device, releasing this heat to the atmosphere via evaporation. In the refinery plant, most water is lost to evaporation in the cooling tower, while there are also other equipment and processes that result in smaller evaporation volumes.

The typical oil refinery withdraws around 1.5 L of fresh water to process 1 L of crude oil. That said, withdrawal and consumption can vary substantially between refineries, boiling down to the design and complexity of the facility. Many refineries using advanced cooling system technologies have a low water withdrawal, high water consumption rate, and are more expected to update their systems to conserve energy and water.

However, energy-related water consumption is likely to increase on the back of population growth, urbanization, and higher standards of living, among other factors. This will further stress fresh water supply and demand in an era where water scarcity is regarded as a global risk.

Fracking Affects Water Supplies

The initial hydraulic fracturing process may require millions of gallons of water. Fracking demands large quantities of freshwater, which poses a problem in arid regions. Advanced technologies have made it possible for brackish or saline water to be used for fracking and extracting crude oil from oil fields (oil recovery). As mentioned earlier, the oil underground exists with water in varying amounts, so substantial amounts of water may be extracted or produced along with the oil.

However, fracking has been seen to exert demand on water supplies. The increase in water usage for fracking is linked to newer technologies that allows energy companies to find oil in more complex geologies. And although fracking uses less water than agriculture or even power plant cooling, it can exacerbate the constraints on fresh water availability in water-stressed areas. As a very small amount of the water utilized for fracking is recycled and the rest disposed deep underground, it is eliminated from the water cycle and never used again. Experts believe that the permanent loss of water from fracking could outweigh its relatively lower water intensity – the amount of water used to produce one unit of energy.

Natural gas wells tend to use more water for fracking than oil wells. Fracking operations occur in both arid and less-arid places, and research indicates that some arid regions use most of the water, with the amount of water needed for each job increasing. A growing water requirement in a wet region may not matter as much as that in a dry area, specifically if large amounts of groundwater are pumped. This is because fracking can increase groundwater demand in some arid regions by up to 30 percent.

The high volumes of water used for fracking in arid and semi-arid regions have caused conflicts over water availability and contributed to depletion of groundwater. There have also been concerns over the salts, toxins, radioactive material, and organic matter in wastewater from fracking.

Water use for hydraulic fracturing in shale gas producing areas is increasing, posing a concern around the intensifying water footprint of natural gas production. Over a third of U.S. natural gas consumption occurs in homes and commercial buildings for purposes of heating spaces and water, as well as for cooking. Close to half of the country’s homes use natural gas, and it is the choice of fuel for the northern regions, while the southern regions are less dependent on natural gas and more on kerosene, fuel oil, or another fuel. 

Natural gas is used to manufacture plastics and chemicals. Steam reforming, the interaction of steam with methane, produces the hydrogen gas used to make ammonia for fertilizers. Ammonia is used to make fibers, explosives, plastics, and intermediates for dyes and pharmaceuticals.

Natural gas is a cleaner burning fuel and has been hailed as a transition fuel en route to making renewable dominant energy sources. Natural gas vehicles also emit 20 – 30 percent fewer carbon emissions than gasoline. According to the International Gas Union (IGU), natural gas produces half the greenhouse gas emissions of coal and one-third less than oil when generating electric power. Natural gas-fired plants can be built more cost-effectively than coal-fired power plants and are also more operationally flexible, as they can be fired up and turned down quickly. Since 2008, natural gas prices in the United States have fallen, making it a sought-after base and intermediate load power source.

How the Oil Industry is Using Technology to Lower Water Consumption

Oil companies are actively investing in new technologies to optimize water usage. Some are using brackish and recycled produced water for drilling and fracking operations without placing a pressure on freshwater supplies. A few have used novel approaches, such as using aquifers whose waters are not suitable for agriculture or human consumption.

There are opportunities for companies to buy wastewater from cities for use in local oil operations, reducing the amount of water that needs to be pumped from under the ground. Some are building capacity in water management by implementing strategies such as participating in local initiatives that improve access to clean fresh water while also improving basic sanitation. Major players are adopting a life cycle approach to their water use by deploying practices such as designing sustainable water systems that benefit the community, environment and business, evaluating water consumption use as part of their environment management systems, and initiating partnerships to share innovative ways of water management.

Holistic approaches to reusing produced water are also increasingly being explored by players in the oil and gas industry. Some may yield other benefits such as lowering the costs of oil wells with no loss of production. Advanced technologies are enabling companies to make processes more environment friendly, economical and safe.

For companies embarking on water conservation initiatives, the business rationale is that, by spending now, they can save more on water costs later. As more energy sector players invest millions in improving their water resource management practices, the market for new technologies dedicated to decreasing water and increasing efficiency in the oilfield can be expected to receive an impetus.

Water is one of the earth’s most critical resources, sustaining life and maintaining environmental balance. From personal needs to the demands of agriculture and industry, water powers economies and human development itself. The strain on limited water supplies is expected to intensify further, requiring the attention of lawmakers and business sectors, in particular, segments responsible for the largest water withdrawals. Some players in the oil and gas industry are already exploring ways to reduce water consumption and improve their water resource management practices. More efforts in their direction will go a long way in supporting water conservation and climate change initiatives.

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