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Fracking water treatment sector in need of fresh ideas, expert claims

December 03, 2013
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<photocredit>Jim Parkin/Hemera/Thinkstock</photocredit>

Bearing in mind that fracking has brought about nothing short of a revolution in the North American oil and gas industry over the past few years, it would be reasonable to expect the rapid growth of a related sector -- wastewater treatment. Wastewater is one of the major byproducts of fracking, a process that is estimated to churn out 21 billion barrels of wastewater per year in the United States. So how come investors are still wary of betting on wastewater treatment providers?

According to Judson Hill, fund manager at NGP Energy Capital Management, treating and recycling fracking wastewater has proved to be more difficult than many had expected. There are many variables, ranging from water chemistry to geology, making it practically impossible to find a universal, commercially viable solution. A highly individualized approach is needed for each oilfield, meaning that the costs are high. On top of this, the market is too fragmented, explained Hill.

RELATED: Texas oil company develops fracking method using no freshwater

Hill told Bloomberg that his company has been looking for the right wastewater treatment provider for the past two years but the sector has just proved to be very different from shale gas extraction itself. The fact that NGP has so far refrained from investment can partly be attributed to the losses wastewater management companies have been reporting. Solutions that are typically offered by such companies include transporting wastewater away from drilling sites and injecting it in deep underground wells created specifically for this purpose, as well as distillation and evaporation, but all these methods are costly.

There remains a huge market in wastewater treatment but it will take innovation and creativity to help it take off, Hill concluded.

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