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Oil & Gas

North American produced water treatment equipment market to reach $1.2B in 2017

October 09, 2012
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DALLAS -- The North American market for produced water treatment equipment was valued at $760 million in 2011 and should reach $825 million in 2012, according to a market research report, “The North American Market for Produced Water Treatment Equipment,” available from Total market value is expected to reach nearly $1.2 billion in 2017 after increasing at a five-year compound annual growth rate (CAGR) of 7.7%. Oil field-produced water is expected to increase from $627 million in 2012 to $929 million in 2017, a CAGR of 8.2%. Gas field-produced water is expected to increase from $198 million in 2012 to $267 million in 2017, a CAGR of 6.2%.

Until renewable, sustainable sources are fully developed, the demand for fossil fuels will continue to grow. According to the International Energy Agency''s (IEA) most recent World Energy Outlook, the production of conventional crude oil, the largest single component of the global oil supply, will remain at current levels before declining slightly, to 68 million barrels per day, by 2035. To offset declining production at existing fields, 47 million barrels per day of additional gross capacity are required. This volume is twice the current total oil production of all Organization of Petroleum Exporting Countries (OPEC) in the Middle East. A growing share of this output (10 million barrels per day) will come from unconventional sources.

The IEA forecasts a bright future, even a golden age, for natural gas, especially for so-called unconventional gas, such as shale gas and coal bed methane. Unconventional gas now accounts for 50% of the estimated natural gas resource base. By 2035, unconventional gas is predicted to rises to 20% of total gas production, although the pace of development will vary considerably by region. The growth in output also will depend on the gas industry dealing successfully with the environmental challenges. "A golden age of gas," says the IEA, "will require golden standards for production."

The demand for carbon-based energy is a major market driver for products and services used to treat the water produced during oil and gas exploration and production (E&P). Produced water, the effluent that rises to the surface during E&P, includes naturally occurring water in energy deposits and water injected into formations during drilling processes.

Produced water comprises approximately 98% of the total waste volume generated by the industry. Current global E&P companies and their activities generate more than 115 billion bbl per year (bbl/y) of produced water. For every barrel of oil, an average of three barrels of water is produced. In the U.S., the water-to-oil ratio (WOR) averages eight barrels of water to one of oil. On average, for every barrel of oil currently recovered, eight barrels of wastewater are also generated. During the next 15 years, the water-to-oil ratio is forecast to increase from 8:1 to 12:1. In the worst cases, the WOR reaches 50:1. To dispose of produced water, energy companies pay from $3 per barrel to as much as $12 per barrel. With the need to manage such large water volumes, the oil and gas production industry has become as much about water as it is about energy.

In addition to large water volumes and high disposal costs, energy developers using traditionally produced water practices are facing increased opposition from environmental activists, local and state governments, and the public. These groups are concerned that the water is leaking from traditional containment pits and entering groundwater and surface water bodies. Historically, produced water has been contained temporarily in pits, and then either transported to treatment plants or evaporated.

During a producing oil well''s life cycle, it initially produces oil along with a small amount of water; but, over time, the percentage of water increases. Throughout the well''s service life, the produced water must be separated from the oil it contains. Following treatment, the water may be handled via one of three methods: safely discharged (used mainly in offshore applications), reinjected into the hydrocarbon formation (used in onshore, coastal or environmentally sensitive areas) or reused (either to maintain reservoir pressure and enhance heavy oil production or in other beneficial applications). In most world regions and for all of the end uses/disposal options, treated water quality must meet certain standards, including low toxicity, high biodegradability and low potential for bioaccumulation in the food chain.

A number of water treatment technologies and equipment types are commercially available for use at oil or gas production sites. These processes can reduce the cost, inefficiency and risks associated with treatment pits and the transport of toxic water. The treatment technologies include methods for de-oiling, de-sanding, desalinating and disinfecting produced water. Numerous systems types are on the market; separators, hydrocyclones and distillation-, ion exchange-, adsorbent- and membrane-based units, as well as proprietary equipment and combinations of equipment are among the choices.

Some of these products and technologies enable the treatment of produced water to a quality suitable for beneficial reuse. Presently, most of the water reused is employed for reinjection in enhanced oil recovery operations. However, there is also future potential for recycling the water in agriculture or a new source of municipal or industrial water supply, especially where water scarcity is an issue.

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