“In the near future – and sooner than most anticipate – there will be a significant reallocation of capital.” – Larry Fink, CEO of BlackRock
Why should anyone care about oilfield “alternative water sourcing”?
As an innovative company, Connate Water Solutions stays at the forefront of frac water management and alternative water sourcing in Alberta, Texas and New Mexico. The replacement alternative water sources are likely to be a combination of saline groundwater, recycled produced water, flow-back and industrial wastewater.
Figure 1: Alternative Water Sourcing Analysis – Environmental, Social & Governance (ESG) Rating
Alternative water sourcing is also very appealing from an Environmental, Social and Governance (ESG) perspective. We present a high-level alternative water sourcing analysis in Figure 1 with specific attention to common ESG ratings.
Within Alberta, the Mine & Minerals Act was created to allocate the production of petroleum hydrocarbons and water within the Crown’s subsurface pore space. As frac-water intensity increases, we are predicting that the value proposition of saline groundwater sourcing may compete with uneconomic petroleum production (ex. Belly River Group). In the near future, we believe Crown petroleum & natural gas mineral rights that coincide with high yielding saline aquifers (greater than 4,000 mg/L TDS) will increase in value. In addition, potential trespass issues are mitigated with the ownership of shallow Crown mineral rights.
Don’t just take it from us – an excerpt from Crescent Point’s Latest 2020 ESG Report:
“Alternative water sources are presently harder to come by than traditional fresh water sources which poses a challenge in shifting to non-fresh sources of water. However, we’ve had previous success in sourcing non-fresh water from the Belly River formation and continue to look for similar opportunities across our operations”.
Connate Water Regulatory Tip of the Month: The Alberta Energy Regulator (AER) has incentivized alternative water sourcing by not requiring formal Water Act licensing regarding saline groundwater diversions (greater than 4,000 mg/L TDS).
Get ahead of the Alternative Water Sourcing Curve and Contact Us Today!
Geoff Kovacik M.Sc. P.Geo.
Owner and Principal Hydrogeologist
Connate Water Solutions Inc. | 204-1001 1st St SE | Calgary, AB T2G 5G3
Connate Water Solutions LLC. | 18911 Hardy Oak Blvd | San Antonio, TX USA 78258
