In 1913, a Toronto lawyer named David Fasken bought 220,000 acres of ranchland in west Texas, sight unseen. He intended to subdivide the land, on the arid Llano Estacado, into farm plots. But he abandoned that idea once he saw how little water there was. Things worked out, however: The family went into the oil business, and now, 101 years later, Fasken Oil and Ranch is one of the oldest privately owned oil companies in the Permian Basin, a fossil fuel-rich field that underlies west Texas and southeastern New Mexico.
Eventually, though, the climate caught up with Fasken – as it has with many other oil companies both in the Permian Basin and beyond. Now, faced with drought and increased competition, Fasken is trying to stop using fresh water for fracking, the injection of pressurized liquids to break underground formations, and for drilling. The company is both a model for other operations and an example of how hard it is to cut back.
According to Ceres, a nonprofit focused on sustainable business practices, Permian Basin oil companies use an average of 1.1 million gallons of water to frack each well – not bad when compared to the 4.4 million gallon average in Pennsylvania's Marcellus Shale. But nearly all Permian Basin wells are in water-stressed areas, and there's more being drilled daily. Ceres predicts water use for fracking here will double by 2020.
For most of the last century, Fasken got its water from the southern end of the Ogallala Aquifer, large areas of which are being drained by agriculture faster than they can be recharged. The ranch's wells were never prolific, says Jimmy Davis, the company's director of oil and gas operations, and drought has made them even worse.
Three years ago was especially bad – only three inches of rain fell near the ranch in 2011, compared to 15 on average. Meteorologists called it the worst one-year drought on record in Texas. Davis and others began to worry about how much of the Ogallala they were pumping from Fasken wells.
"We were just looking at the ranch and realizing we don't have much water, and we're concerned about the family and the future generations," he says. "It just made sense to try to do something different."
So Fasken drilled three new wells and converted five existing wells to reach the Santa Rosa Formation, a source of brackish water deep beneath the aquifer, water that couldn't be used for drinking or irrigation without being desalinated.
Fasken treats the sulfates out of the Santa Rosa water and uses it for fracking and drilling wells. It also recycles water produced during drilling and has pipelines to carry the water to a central recycling station, where it is treated and reused. Recycled water now satisfies 41 percent of Fasken's total needs. Santa Rosa water covers the remaining 59 percent.
The Santa Rosa water costs about 50 cents a barrel to treat. The recycled water costs about $1.50 per barrel. Fresh water from its own land would cost the company almost nothing, but Davis says the costs of conservation are worth it.
Now a growing number of oil companies around the Permian have followed suit. "We realized it was a bad idea, in a business sense, to need a scarce resource whose availability and price might become issues in the future," says Cal Cooper, director of special projects at Apache Corp., one of the largest operators in the basin.
If scarcity is one reason to move away from fresh water, public relations is another. The oil and gas industry uses just 2 percent of the state's water, compared to agriculture's 56 percent. Nevertheless, oil companies are seen as water hogs. "In this time of drought, what people see is trucks carrying (fresh) water to pump it down a hole," says Danny Reible, a professor of environmental engineering at Texas Tech University. "That's a pretty negative image."
Still, only 2 percent of the water used by the oil and gas industry here is recycled. The rest is pumped back into disposal wells. Fasken, a family-owned business drilling its own land, had it relatively easy. It's harder for most other companies, which need permits to build pipelines across private ranches, have wells that are far apart or are obligated to buy freshwater from landowners as part of their leases.
But water conservation is likely to become more popular, as farmers and city officials, spooked by drought, either jack up prices for water or stop leasing it entirely. Texas could double its population over the next 50 years, and that will take a lot of water, Reible says. "To make that happen it's going to require a lot of conservation," from oil companies, farmers and everyone else.