Fracking Boom Drives Increase in Wastewater Treatment

Hydraulic fracturing (commonly referred to as fracking) has been around for many decades, but only recently has it been at the forefront of oil & gas exploration in the United States. Even with the recent downturn in natural gas prices, producers are continuing to frack. According to Scientific American, hydraulic fracturing consumes up to 9.6 million gallons of water per well, and many wells are located in arid regions like Texas.

There are a number of opinions about the process, both favorable and unfavorable. But one thing is for certain: hydraulic fracturing consumes a large amount of water and produces a great quantity of wastewater. This wastewater can be in the form of flowback (fracturing fluid that flows back to the surface of the well after injection) or produced water (water that was already in the aquifer). These present different challenges to treatment and disposal, as flowback water contains components which make it viscous, and produced water tends to have very high levels of dissolved salts. Treatment of this water is usually overlooked in favor of injecting it deep underground in Class II injection wells. However, with increasing public awareness of fracking and advancing treatment technologies for complex contaminants in water, treatment and recycle of wastewater is becoming more viable.

Increasing Regulations

The United States and Canada are the major players in the fracking waste treatment business today. Despite rumors of the lack of regulation, hydraulic fracturing is heavily regulated, and more stringent regulations are being passed at local, state, and federal levels. Along with heavy regulation on the practice itself comes heavy regulation on the disposal and treatment of associated wastewater. For example, in Pennsylvania, the U.S. Environmental Protection Agency regulates the permitting of Class II underground disposal wells. In many other states, these are the main sink for produced and flowback water. In Pennsylvania, there are only seven active disposal wells for oil & gas use; increasing regulation, as well as changes in the economic conditions, are causing the market for water treatment to expand rapidly.

Guidehouse Insights’ recently published Wastewater Treatment Technologies in Natural Gas Hydraulic Fracturing report analyzes the wastewater treatment market between 2016 and 2025. According to the report, revenue from treating water is expected to surpass revenue from deep well injection of produced water in 2018 and is expected to continue to grow from there. This represents a great opportunity for many of the small companies entering this market. Currently, advanced oxidation, membrane filtration, and reverse osmosis are popular treatment options for flowback and produced water streams. With the rapidly growing available revenue in fracking waste treatment, it will be interesting to see which other treatment technologies are adapted.

Revenue from Hydraulic Fracturing Wastewater Treatment by Disposal Type, United States: 2016-2025

(Source: Guidehouse Insights)