Several companies are now looking into opening sites in the center of the largest oil patch in the U.S. It is not for oil, but for handling wastewater. With miles of pipelines and rows of steel tanks, sites like this in Big Springs, Texas is just one of the dozens own by companies who are turning to invest in water management.
The decade long shale revolution has enabled U.S. oil production to reach record high levels. By the year 2023, the oil production in the Permian basin which extends from West Texas to southeastern New Mexico is predicted to increase to 35% or 5.4 million barrels per day.
However, most of the supporting infrastructures have been left behind by this development. They are falling short on ways to haul huge amounts of water that were used in the hydraulic fracturing process along with produced water from oil and gas wells.
On their own, energy producers face the rising cost to supply, acquire, and dispose of water. But for investors like Blackstone Energy Partners LP, Ares Management Corporation, and TGP Capital among others, the wastewater management is a lucrative business opportunity that raises $34 billion in the U.S each year.
James Lee, from Riveron Consulting, cited that it is not possible to bring production online without a plan of solution for water. Morgan Stanley reported an estimate of 115 billion gallons or 2.75 billion barrels is required for drilling 5,500 Permian wells. (by Abigale Lormen, Market Tactic)