Water use in oil and gas

The oil and gas industry is undergoing a series of dramatic shifts with one common outcome: extracting hydrocarbons is harder than ever before. Production from the world’s largest conventional fields is in decline while national oil companies continue to control the majority of the world’s oil reserves.

 Simultaneously, global demand for oil and gas continues to grow, fueled in large part by emerging economies. As a result, producers have resorted to new techniques to bypass declining and inaccessible legacy sources of oil and gas. The last five years have seen a dramatic increase in production from unconventional sources. These sources – shale, oil sands, deep water offshore – represented 47 percent of capital spending in the oil industry in 2012. i Producers are using more to get less – more labor, more energy, more time, more water – which all leads to higher costs for both producers and consumers.

Xylem believes that for an industry focused on improving margins, solving water challenges may be the best opportunity to reduce costs, improve profitability and preserve the natural environment around extraction points. From the water used to flood declining conventional and offshore wells, to the water injected to fracture underground shale, to the steam required for oil sands extraction, water is the most important input to the oil and gas industry. Water is critically important because its supply is also under stress. By 2030, if current trends continue, global water requirements are expected to exceed supplies by 40 percent. ii This trend is all the more relevant in oil and gas production, as many of the world’s largest reserves reside in the most water-starved regions. Oil and gas producers should be concerned with water not only as a proactive step to be more efficient, but also as a defensive step against declining water supplies. Xylem is dedicated to helping solve water-related challenges around the world by protecting water quality, enhancing water productivity, and making water-intensive industries more resilient in the face of climate change and an uncertain regulatory environment

Water use in oil and gas production

Water is a crucial component of all oil and gas production methods. Figure 1 shows the amount of water consumed globally that goes to energy production. While still significantly less than irrigation for agriculture, energy production accounts for the second largest use of water and is expected to continue to rise over the next 15-20 years.

Table 1 shows the relative volume of water required for the production of a unit of energy. This data shows just how much water usage varies across regions and production methods. For example, the extraction method of secondary oil recovery in OPEC nations uses roughly thirty times more water per unit of energy than oil sands mining in Canada. Yet, even those relatively less water-intensive processes have much to gain from making their production more efficient and resilient against a future of growing uncertainty and variability.

Enhanced oil recovery

In the last few years, enhanced oil recovery (EOR) has expanded dramatically. While EOR only accounts for 2 percent of oil production, it experienced a 54 percent annual growth rate between 2007 and 2011. EOR as a technique has grown despite the diminishing returns as oil sources dry up, reflecting rapid growth in demand for natural resources.

EOR includes a number of processes by which producers extract oil reserves remaining in an oil field after an initial drilling and extraction. By injecting liquids and gases, producers are able to force residual oil and gas deposits to the surface to be extracted. The most common forms of EOR are steam injection, water flooding, carbon dioxide (CO2) miscible injection, polymer flooding and caustic flooding.
 
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