(John Kemp is a Reuters market analyst. The views expressed are
By John Kemp
LONDON Feb 6 For 25 years, U.S. specialists in
international relations have been predicting water shortages
will become a source of conflict.
But the real water wars are brewing at home, where farmers,
environmentalists and the oil and gas industry are falling out
over water supplies in the drought-stricken Southwest.
Hydraulic fracturing uses enormous quantities of water to
shatter shale and other tight rock formations by pumping
millions of gallons of water deep underground under intense
Most of the water employed in America's energy revolution is
fresh water taken from the same aquifers used by farmers and
homeowners to irrigate their fields and lawns, as well as for
drinking and washing.
And many wells are being drilled in parts of the United
States such as Texas and Colorado that are suffering from a
prolonged drought, where the water table has been falling
because water withdrawals have been exceeding the rate at which
aquifers are recharged by rainfall.
"Hydraulic fracturing is largely taking place in regions
already experiencing high competition for water," according to
Ceres, an influential non-profit organisation focused on
climate, water and sustainability issues that advises major
"Policymakers are increasingly recognising that regional
economic reliance on groundwater in many regions may not be
sustainable and that groundwater withdrawals by all users must
be carefully balanced," Ceres wrote in a report on "Hydraulic
fracturing and water stress" published on Wednesday.
Between January 2011 and May 2013, almost 100 billion
gallons of water were used to fracture 39,000 oil and gas wells,
according to an analysis by Ceres of well records submitted to
the industry's FracFocus registry.
On average, each well used 2.5 million gallons of fresh
water. The total consumption was equivalent to the annual water
needs of 55 small cities with an average population of 50,000.
The problem with using fresh water for fracking is that it
becomes contaminated with oil, salt and chemicals and must then
be injected into disposal wells so deep that it never returns to
the fresh water supply.
Ceres argues that the best way to understand the scale on
which water competition and risks are occurring is local, which
makes some sense because water supplies are usually managed at
the state and county level, and it is normally uneconomic to
transport water over long distances.
Based on frack registry data, Ceres has identified 32
counties in which more than 1 billion gallons of water have been
used for fracking. A billion gallons is roughly equivalent to
the daily water use of the 8 million residents of New York City.
Ceres highlights several areas where water competition has
become intense. In Colorado's Weld County, for example, the 1.3
billion gallons of water used for fracking in 2012 was
equivalent to 15 percent of the amount used in the county for
But the biggest problems are in sparsely settled rural
counties with small populations that were already suffering from
water shortages before the sudden increase in demand from oil
and gas producers.
Ceres spotlights DeWitt County (population 20,000) and
Karnes County (population 15,000) at the heart of the Eagle Ford
shale play in Texas, where the amount of water being employed
for fracking is equal to or exceeds the amount being used by
residential users and which are experiencing high levels of
FARMERS VERSUS FRACKERS
The major flaw with the Ceres report is that it fails to put
the amount of water used by frackers in proper perspective.
The amount of water used in fracking sounds like a lot until
compared with total water use in the United States.
The United States used 349 billion gallons of freshwater
every day in 2005, the latest year for which comprehensive data
is available, according to the U.S. Geological Survey (USGS)
("Estimated use of water in the United States in 2005" published
The biggest users of freshwater were coal, gas and nuclear
power plants, which use prodigious volumes for once-through
But nearly all of their needs are satisfied by withdrawals
from surface sources such as rivers and lakes. While the water
is technically "withdrawn" from the source, most of it will be
returned in a similar (though slightly warmer) state, so it is
not really "consumed."
After power plants, the biggest single use of water is for
irrigation, which includes crops as well as golf courses. In
2005, irrigation used 144 billion gallons of fresh water every
day, of which 75 billion came from surface sources and 54
billion were pumped from underground aquifers.
In other words, frackers used the same amount of water in
2011-2013 that U.S. farmers typically withdraw from underground
aquifers every two days.
The real competition is not between frackers and households,
but between oil and gas producers and farmers.
In comparison, the daily consumption of fresh water by
industry (17 billion gallons), mining (2.3 billion gallons) and
homes and offices (48 billion gallons) is modest.
TARGET PROFLIGATE USERS
By comparing fracking with the residential water supply, the
Ceres study makes the frackers' share look larger than it is and
ignores the real problem, which is overconsumption of
groundwater supplies by the farming industry.
Giant aquifers such as the Central Valley aquifer in
California and the Ogallala beneath Texas and the other Plains
states have fallen, in some cases by 100 feet or more, over
several decades. The drop in the water table started long before
the fracking revolution.
By focusing on just a tiny handful of the more than 3,000
counties in the United States that happen to have large numbers
of oil wells, small populations, lots of farming, and droughts,
the report makes fracking look like the culprit.
At the margin, fracking may make the existing water stress
situations worse, but it does not cause them. The solution is
not to regulate fracking on its own but to pursue a
comprehensive reform of water allocation. The number one target
has to be cutting wasteful water use by farmers.
Other sources of water stress come from the massive
expansion of metropolitan areas in the arid of Southwest, which
have seen the most rapid population growth of any cities in the
country, in a region already severely short of water.
PRICING SCARCE RESOURCES
In its report, Ceres makes a string of recommendations to
fracking firms and their investors to conserve water. But the
real challenge is to force everyone (farmers, urban developers,
homeowners and golf course owners as well as frackers) to think
more carefully about water use.
At a regional level, water consumption is far too high
across much of the Great Plains and Southwest. Low prices and
poor regulation have encouraged over-consumption.
The solution is a better specification of water rights,
higher water prices and a more market-oriented approach that
allocates water to the customers who value it most and are able
to pay the highest prices for it.
At the county level, the problem is excess consumption
coupled with the lack of transport infrastructure in small rural
counties. Again the solution is to improve regulation and raise
prices to ration the available supply and encourage frackers,
farmers or local water companies to bring in more water from
outside the county.
Ceres spotlights the experience of Kern County, California,
the country's largest producer of almonds, pistachios and
citrus, where the oil industry and farming have coexisted for
decades. Many farmers receive royalties for oil wells on their
land among their groves.
"Although the oil and agricultural industries have coexisted
for many years in Kern County, elevated water use for hydraulic
fracturing in the context of massive drought could alter this
course," it warned. "There are growing concerns that the
agriculture sector will find it more lucrative to sell their
water for oil exploration than growing crops."
But that is surely the point: in a market economy, clear
property rights coupled with price signals channel scarce
resources such as water to those who value them and can pay the
most. If farmers can make more money selling water to fracking
firms than by irrigating their fields, they should be allowed to
(editing by Jane Baird)