America’s oil industry faces a number of challenges, including low oil prices, the rise of electric vehicles and proposals to limit fracking. But one of its biggest problems: The industry is running out of water.
The US oil boom is being driven mostly by the growth of fracking — injecting water into shale formations to free up deposits of oil and natural gas that were never economically accessible before.
But much of that oil and natural gas is found in the most arid parts of the country, where water is scarce.
“We’re in the middle of desert,” said Jerry Morales, mayor of Midland, Texas, ground zero for the fracking boom. “And two years ago we came out of a seven-year drought.”
But water use by the oil and gas industry in the Permian Basin, an area of West Texas and New Mexico that is at the center of the fracking boom, has shot up from only 1 billion gallons in 2011 to 84 billion gallons last year, according to data from University of Texas senior research scientist Bridget Scanlon.
The growth of fracking has also caused a massive jump in population, putting a strain on water resources in the region. That has left the oil companies scrambling to find the water they need.
The towns of Midland and neighboring Odessa, Texas, are now selling most of their municipal waste water to oil companies for use in their injection wells. Pioneer Natural Resources (PXD), one of the leaders in the field, agreed to spend $130 million to upgrade the waste water treatment facility of Midland, Texas, in return for the right to buy its waste water for up to 40 years. The company is using about 5 million gallons a day of municipal waste water to help it reach the up to 21 million gallons of water it uses every day.
Read more from Chris with Isidore with CNN Business here.