Next week we are announcing our first Permian Basin project at the Produced Water Society’s conference in Midland. Our partner in this project is Cody Wilson, a fourth generation farmer who is a leader in innovation and processes to make American’s farms continue to supply the world’s food.
Cody is our guest blogger to talk about the project and his rationale of it:
Much like all difficult-to-solve problems, I believe there are many ways to look at the reusability of by-product/produced water. Because there exists technology to clean and reuse this water, the problem cannot be accurately described as a technologicalproblem. Numerous companies possess the ability to clean produced water to all but potable water standards. That’s not our problem.
You see, if we have access to the technology and have the desire to reuse this resource, why has re-purposing not been more widely adopted? There must be another reason and that reason is money.
Because reclaimed water and fresh water are economic substitutes, the demand for one will be affected by the price of the other. Even though fresh water is quite scarce in west Texas, everyone possesses the right of capture and can elect to sell fresh water for whatever price they can negotiate. Currently in my area in Midkiff, that is somewhere between $0.27/ barrel to $0.50 / barrel. So, any substitute for fresh water must compete at that same price or its demand will decrease.
That, then, makes us ask: what can we do with re-purposed water so it can compete with fresh water sales?
There are several solutions that the market might accept.
One would be to use our fresh water until it is scarce enough that the price increases. As a farmer and citizen of west Texas, I would advocate against this solution.
The second solution would be to wait until new technologies are discovered to allow the price of produced/by-product water to compete with fresh water sales directly. But who knows how long that will take?
Finally, the third and more workable solution would be to put this produced/by-product water to work for us.
What we are advocating is to use produced/by-product water to create electricity.
Through the use of Concentrated Solar Power – where a large area of sunlight is focused onto a smaller area -- we can use the sun’s energy to create steam from a waste stream of produced/by-product water.
Then, by using the steam to turn a turbine, we can create another product to sell, electricity.
Finally, this steam is condensed back down to distilled water which we can then sell or use for irrigation. While the distillation process is old technology, it will still qualify for the Solar Tax Credit which is currently at 30% for 2019. According to my research, the 30% tax credit is in addition to depreciation and can be carried forward. It’s almost like having a government subsidized disposal.
In summary, if you want to really start re-purposing produced /by-product water, then let’s put it to work for us.
Imagine being able to charge normal disposal fees, sell electricity to the grid, sell distilled water, and still receive a 30% tax credit (in addition to depreciation) on the cost of the equipment including labor.
Combining this with Encore Green Environmental’s Conservation By-Design™ method, this water not only creates electricity, it waters the ground as well.
Now that's a new solution for the Permian!