12/30/2023 0 Comments Jason downie tailwater email![]() “I’d put water right at the top of that list,” he said. 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. 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. Overall, the region will pull up enough water this year alone to cover all of Rhode Island nearly a foot deep. With as many as four barrels of water produced for every barrel of oil, it’s a disposal nightmare that could add as much as $6 a barrel to company break-evens by 2025, according to a recent Wood Mackenzie study. As oil is pumped up, so is the water, combined with salt-laden water from underground reservoirs to create a toxic mix that would devastate farmland if released on the surface. With fracking, explorers blast water, sand and chemicals down wells to crack open the oil-bearing shale below. But the sheer volume of what’s now being produced has created an opportunity for specialized water companies to step in.” “It used to be that each operator handled water themselves. ‘‘If we don’t have a water solution we can’t produce the well, it’s as simple as that,” Hickey said. It’s making a hole to dispose of the vast amount of water generated from local wells. But this one, operated by WaterBridge Resources, isn’t seeking oil. Just a half-mile away, another rig is equally hard at work. Standing on a 26-foot high rig platform in Texas’ Reeves County, Hickey watches as contractors maneuver drilling pipe almost 10,000 feet underground in search of oil. ![]() Just ask Will Hickey, the 31-year-old chief executive officer of Colgate Energy. In the dry, dusty plains of West Texas, home to America’s most prolific oil play, the problem isn’t too little water, it’s too much of it. Workers connect drill bits and collars used to extract petroleum on a drilling rig in the Permian Basin outside of Midland, Texas.
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