Today most produced water moves off the lease in trucks, although producers are now increasing their investment in produced water-gathering and transportation systems to move the barrels to centralized facilities and disposal wells. But here’s the bottom line: it costs just about as much to move a barrel of water as it costs to move a barrel of oil.
And there is a lot more water than oil coming from a given well. The implication is that the largest single cost of operating a well — sometimes more than half of total operating cost — is produced-water disposal. That is a number that can impact producer economics and thus capex investment plans, drilling activity and production growth.
Worse yet, there is concern in some quarters that the sheer volume of produced water may eventually overwhelm the ability of the network of facilities and disposal wells to keep up with crude oil production, resulting in a constraint on growth in the Permian. In the next blog in this series we will examine the costs of produced water disposal and how those costs may affect Permian crude oil development over the next few years.Active rigs: