Tag: water

Water

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Harvard Quietly Amasses California Vineyards—and the Water Underneath

This post is a bit off our normally beaten path but the parallels are interesting.

 

The university’s endowment manager, Harvard Management Co., was stealthily building a sizable grape-growing business on the Central Coast through entities including Brodiaea. With the land, it was acquiring rights to vast sources of water in a region where the earth’s warming is making the resource an ever-more-valuable asset.

In a warming planet, few resources will be more affected than water, as more-frequent droughts, storms and changes in evaporation alter a flow critical for drinking, farming and industry.

Even though there aren’t many ways to make financial investments in water, investors are starting to place bets. Buying arable land with access to it is one way. In California’s Central Coast, “the best property with the best water will sell for record-breaking prices,” says JoAnn Wall, a real-estate appraiser who specializes in vineyards, “and properties without adequate water will suffer in value.”

 

 

Sourcewater

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pond

This isn’t in direct reference to TPL but I thought was worth sharing.  Sourcewater is a startup aimed at connecting buyers and sellers of water and water disposal services.  The company’s website is worth a look to get a better perspective on the West Texas water bonanza.

I have no connection to this company.  Sharing for context only.

I enjoyed this long form sales pitch from the company.  Some excerpts:

Just in the past few years, the average frac has gone from needing about 4 million gallons of water (100,000 barrels) to needing 20 million gallons (500,000 barrels) or more – sometimes much more. And most operators now frac a bunch of wells at the same time for efficiency (called “pad drilling” or “zipper fracs”) so the amount of water they need in the span of just a few days could be millions of barrels, maybe even close to 100 million gallons – in just a few days.

In fact, water is in such high demand that oil and gas operators are buying water anywhere they can get it. For example, Pioneer Natural Resources, one of the top Permian operators, recently made a deal with the local cities of Odessa and Midland to buy and reuse their sewage water for fracking. Many operators are starting to recycle the water that comes out of the ground with the oil and gas they produce, taking that “produced water” and injecting it into the next frac to save on both freshwater needs and disposal costs.

Mineral rights are not usually owned by the person who owns the land. But under Texas law and in some other oil and gas states, surface landowners always own the water.  That means a lot of people who were always locked out of oil booms of the past because they didn’t own their mineral rights can finally get in on the action. Any landowner near an active oil or gas formation with water under their land is sitting on a gold mine. Not black gold. Clear gold. Liquid gold.

Sourcewater already has thousands of active users registered on its marketplace with more than 1 billion barrels of water listed for sale and over 100,000 water sources just in Texas. Energy companies and service companies search for water on Sourcewater.com every single day, looking for the water they need for their next frac site.  Ready to become a water millionaire? Create a free water listing on Sourcewatertoday.

 

Recycle That Water!

tpltblogger

UT News: Study Quantifies Potential for Water Reuse in Permian Basin Oil Production

The UT Bureau of Economic Geology led the study that highlights key differences in water use between conventional drill sites and sites that use hydraulic fracturing, which is rapidly expanding in the Permian. The study was published in Environmental Science & Technology on Sept. 6, with results indicating that recycling water produced during operations at other hydraulic fracturing sites could help reduce potential problems associated with the technology. These include the need for large upfront water use and potentially induced seismicity or earthquakes, triggered by injecting the water produced during operations back into the ground.

For conventional operations, the produced water is disposed of by injecting it into depleted conventional reservoirs, a process that maintains pressure in the reservoir and can help bring up additional oil through enhanced oil recovery. Unconventional wells generate only about a tenth of the water produced by conventional wells, but this “produced water” cannot be injected into the shales because of the low permeability of the shales. The study found that the produced water from unconventional wells is largely injected into non-oil-producing geologic formations—a practice that can increase pressure and could potentially result in induced seismicity or earthquakes.

The study points out that instead of injecting the produced water into these formations, operators could potentially reuse the water from unconventional wells to hydraulically fracture the next set of wells. Enough water is produced in the Midland and Delaware basins in the Permian to support hydraulic fracturing water use, and the water needs only minimal treatment (clean brine) to make it suitable for reuse.

Who’s got enough land to store and re-distribute vast quantities of water throughout the basin?

Below is a link to the study.  More to come from me after I dig in.

Study:  Water Issues Related to Transitioning from Conventional to Unconventional Oil Production in the Permian Basin

 

Love That Dirty Water

tpltblogger

Bloomberg: Drowning in Dirty Water, Permian Seeks $22 Billion Lifeline

Water is of critical importance in shale activities.  TPL happens to be sitting on ~900k acres of land from which water can be readily extracted and to which used water can be readily disposed.

Though the article doesn’t mention TPL’s newly (2017) formed water subsidiary, Texas Pacific Water Resources, my research indicates it is/will continue to be a player in the Texas/New Mexico water arena.

Not hard to envision a $300MM++ top line from TPWR one day soon.

I remind the reader that the above is conjecture.  Just personal estimates for me to get my thoughts together.  DYOR!

“Overall, the region will pull up enough water this year alone to cover all of Rhode Island nearly a foot deep. Wall Street is well aware of the threats posed by the Permian Basin’s pipeline and labor shortages, key side effects from the region’s rapid buildup. But investors “aren’t as well apprised of some of the other risks and challenges that could be just as material, if not more so,” said Gabriel Collins, a fellow in energy and the environment at Rice University

“I’d put water right at the top of that list,” he said.

How material? Spending on water management in the Permian Basin is likely to nearly double to more than $22 billion in just five years, according to industry consultant IHS Markit. The reason is twofold. The rig count is rising, and many of the “workhorse” disposal formations used for decades are starting to fill up, said Laura Capper, an industry consultant. That means explorers have to move water further to find a home for it.”