American Oil and Gas Reporter - July 2021 - 61

SpecialReport: Cloud Computing
Commoditizing Produced Water
Produced water traditionally has been seen as a waste
byproduct of oil and gas production, leading the industry to
seek cost-effective ways of disposing of it. Ultimately, however,
the goal is to improve the balance sheet, which can be achieved
through both cost efficiency and revenue generating potential.
One way produced water has been monetized traditionally is
by skimming off and marketing oil that accumulates on the
surface of the water in storage tanks. Producers and midstream
water companies also are recycling flowback and produced
water. Once treated, produced water is returned to the producer
for fracturing operations, creating a closed loop where revenue
opportunities exist for disposing of and treating produced water
as well as reselling water as a commodity in an arid region
where freshwater is ironically scarce.
While potable water supplies continue to dwindle worldwide,
the bigger opportunity for the industry, markets and the public
is to reset mindsets and begin seeing oil and gas companies as a
potential new source of water. Like the myth of peak oil, peak
water supply is academic. When the need and economics are
right, innovators will find economic ways of transforming
saltwater or wastewater into drinkable or agricultural water
sources, similar to the way desalination plants in the Middle
East supply drinking water to cities hundreds of miles away or
consistent with the current " toilet-to-tap " treatment systems
provided in the sewage wastewater industry where sewage is
processed and returned to lakes and re-enters the water supply.
As the oil and gas industry navigates the current push for
energy transition, the calculus of what qualifies as green energy
is complex. Solar panels, to cite an example, are largely made
in China, and generally rely on coal-burning power generation
to meet the extensive electrical requirements of glass production
and panel assembly. Should our country and the energy industry
continue investing in renewable energy sources at the expense
of emissions and the environment? Instead, there is an opportunity
to invest more in natural gas as the power source of the future
and begin investing in produced water as a water source of the
future. To achieve the latter will require massive investment
into infrastructure and methods of automating water management,
from the wellhead to city gates.
Digital Analytics and logistics management technology
will continue to play a vital role in solving the produced water
management challenges of today and tomorrow, driving down
costs and break-even levels as well as creating new revenue
generating opportunities as produced water increasingly is
viewed as a commodity.
At the same time, technology and analytics-optimized water
transportation and carrier operations are lowering oil field
emissions, a " win " for both the bottom line and the environment.
The oil field of the future might be one where we reverse the flow
of injectors and transform them into producing water wells. West
Texas and the desert Southwest may look greener one day. ❒
JEFF
O'BLOCK
Jeff O'Block is founder of Chorus Logistics, a W Energy Software Company. With an
extensive background in energy accounting and transportation, he co-founded Confirmation
Corporation, a developer of software that provides confirmation services to subscribed trading
companies, and Texas Cedar Clearing, which specializes in seismic line and pipeline construction
rights-of-way work. O'Block was also the co-founder of PSC Energy, the original developer of
the GMS energy trading platform. He holds a B.S. in chemical engineering from Grove City
College and an M.S. in computer science from Youngstown State University.
FRANK
OLMSTED
Frank Olmsted is chief financial officer at H2O Midstream. With 30 years of accounting
and finance experience in the midstream, upstream and retail energy sectors, he joined H2O
Midstream in 2019. He previously served as chief accounting officer at Spark Energy, and
prior to that, spent 20 years in varying roles at El Paso Corp. and its subsidiary, EP Energy
Corp., including vice president and chief accounting officer. Olmsted began his career with
PricewaterhouseCoopers. He holds a B.B.A. in accounting from Texas A&M University.
JULY 2021 61

American Oil and Gas Reporter - July 2021

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