Evaluation of produced waters in
the Permian Basin for economic
development
Team Members: Oluwaseye Owoseni, Sam Simon, Stephanie Ray
Presented at Texas Energy Innovation Challenge
1 May 2015
Proposed Approach
• Reusable water and selective mineral
commodity recovery
• Commercially successful– since 1891
• Economically viable approach
Why?
• Minerals from produced waters -- an
underutilized resource
• Recycle water to reduce freshwater needs
Permian Basin
Geology
• Shales,
sandstones,
carbonates,
evaporites
Water
• Bulk geochemistry of shale
formations is similar to those for
adjacent non-shale reservoirs
Pic Source: University of Texas at Permian Basin, Section courtesy of R. F. Lindsay
Geochemistry characteristics: Engle and Rowan, 2014
Geochemistry of the Permian Basin
Boron, bromine, iodine, lithium, and magnesium
B
1st Qrtl
Br
Median
I
3rd Qrtl
Li
Max
Mg
SO4
Sr
1
10
100
1000
10000
100000
Concentration (mg/L)
• Elements found in high concentrations
• Source: USGS Geochemical database (n=7206 samples)
Ca & Sr
SULFATE
Mg HARDNESS
REMOVAL HARDNESS REMOVAL/MINING
REMOVAL
FLOW
OIL WATER
SrCl2
SEPARATION EQUALIZATION
Na2CO3
NaOH
PRODUCED
WATER
SOLIDS HANDLING
PRODUCT
HANDLING
DISTRIBUTION
Reuse
BROMINE
MINING
Project Technology
BORON
MINING
Mineral
Mining
Methods
Mineral Mining Methods
Boron
Bromine
Lithium
Iodine
Magnesium
◦ Ion exchange resins removal
◦ Benefit: Interferes with gel additives
◦ Separation by differences in oxidationreduction of halides
◦ Challenge: Bromide separation from chloride
◦ Removal by chromatographic separation
◦Challenge: Lithium separation from sodium
◦ Ion exchange resins removal (as iodide)
◦ Removal by chemical precipitation
◦ Benefit: Contributes to total hardness
< 10 ppm OIL
ORGANICS
OIL/WATER
SEPARATION
FLOW
EQUALIZATION
SrCl2
1.21 lb/bbl
Na2CO3
22.06
lb/bbl
1 MGD Design
Template
GENTLE
MIXING
SULFATE
REMOVAL
CALCIUM &
STRONTIUM
REMOVAL
WATER FOR
REUSE
BROMINE MINING
BORON MINING
MAGNESIUM
REMOVAL
0
5m
10m
NaOH
1.37
lb/bbl
Opportunity: Field Operators’ Costs
(Value reusing produced water)
• Estimated water cost of $3.00/bbl
(for hydraulic fracturing)
• Raw brine water: $2.00/barrel
(for post fracturing drillouts)
Primary Sources: Industrial water
vendors, drillers, industry experts
Assumptions
• Conservative approach used to
determine median commodity
values and operating costs
• Values obtained:
 USGS mineral commodities book of 2014
 Alibaba for industrial chemical costs
 Heavy equipment resale sources
Projected Capital Expenditures
Total = $1,380,000
Containers
4% 7%
Oil water separator
17%
46%
Mining Technologies
Installations
22%
4%
Water and Mining Rights
Miscellaneous
Potential Operating Costs
Logistics
Iodine
Lithium
Bromine Mining
Boron Removal
Mg Softening
Ca &Sr Softening
Sulfate Removal
0.00
0.20
0.40
0.60
$/bbl
0.80
1.00
1.20
1.40
Values for Permian Reservoirs
Histogram of Total Mineral
Commodities Value
Potential Economic Values
$/bbl
B, 0.00
Frequency
I, 0.06
Br, 0.13
Li, 0.11
Mg, 0.41
Total $/bbl B, Br, I, Li, Mg
Mineral commodity values
($ per barrel of produced water; 5 to 95 percentile)
Potential revenue
($ per barrel based upon median value
concentrations)
Costs, Potential Profit
Capital Expenditure
Containers
Oil water separator
Hardness Removal & mineral recovery
Installation
Water and Mining Rights
Miscellaneous
Desalination (TDS<10,000 mg/L)
Total
Potential sales ($/bbl)
Byproducts (SrSO4, CaCO3, SrCO3)
Magnesium Hydroxide
Mineral Commodities (B, Br, L, I)
Reusable water
Estimated operational costs ($/bbl)
Potential profit ($/bbl)
Payback (months)*
Option 1
All minerals/
No Desal
$640,000
$50,000
$300,000
$240,000
$50,000
$100,000
$0
$1,380,000
Option 1
0.255
1.880
0.256
2.000
4.391
3.874
0.517
8.4
Option 2
Option 3
Option 1 – Br, Option 1 – Br,
Li, I
Li, I and + Desal
$400,000
$400,000
$50,000
$50,000
$0
$1,750,000
$150,000
$150,000
$50,000
$50,000
$100,000
$100,000
$0
$3,750,000
$750,000
$6,250,000
Option 2
0.255
1.880
0.001
2.000
4.136
1.124
3.012
0.5
Option 3
0.255
1.880
0.001
3.00
5.136
3.87
1.262
0.8
Proposal Benefits
Our Project
Efficient Water Use
Water
Treatment
Environmental Impact
Job Growth
Diversified Economy
Mineral
Production
Generates Revenue
Job Growth
Factors to Consider
Foreign Regs &
Policy Changes
Regulation, Market
& Price of Supplies
Changes
Our
Project
INDIRECT
IMPACTS
DIRECT
IMPACTS
Texas Water Regulations
Water
Groundwater
Surface
Water
TCEQ
Landowners
Own Water
Beneath
Property
(36.002)
Common Law
Expectations
& GCD
Rule of
Capture
Necessary Permits
Governed by Railroad Commission
• Permit for Mobile, profit generating
venture under rule 8 (3.8)
• Hauler permits 1,2,3
Oil Conservation Division
• Legal to recycle produced water
(March 31st , 2015)
• C-147 form for registration (Rule 34)
• C-133 hauler permits needed
Business Model Overview
Value Proposition for 2 Customer Segments:
1. Reusable water to Oil & Gas Companies
2. Mineral Commodities to Chemical Refining
Companies
Customer Relationships: Partnerships with
potential Customers
Key Partners: Pioneer Natural Resources (Oil &
Gas, Water), Apache, Dow Chemical Co
Channels: Onsite mobile units to Mine at Pioneer,
deliver to Dow (by truck, rail, or piped)
Business Model Overview (cont’d)
Key activities going forward
• Develop further relationships
• Verify business model
• A pilot study (acquire funding, site
selection, production, sales)
Cost structure & revenue streams
- Further develop
Potential Funding Sources
Demand for:
Research in energy and resource management
In Summary
Delivering 2 products:
◦ Water and mineral commodities
Developed a customizable, modular & mobile unit
◦ Not Regionally Restricted
◦ Adaptable
◦ Improves local economies
◦ Can be applied to:
◦ Geothermal wells
◦ Desalination plants
◦ Other oil and gas provinces
Acknowledgments
Thank you to:
Faculty and staff
• Jennifer Clark, Associate Director, Office of Research, UTEP
• Dr. Mark Engle, Geologist with the U.S. Geological Survey
• Dr. Shane Walker, Assistant Professor of Civil Engineering, UTEP
Our Sponsor
• Michael Dunkel, Director of Sustainable Development,
Pioneer Natural Resources
Thank you!