The conversation around produced water is reaching a fever pitch — but not because the challenge is new. It’s because the conditions for real change are finally coming together. In this episode of The Water Exchange, Rick McCurdy and Nate Banda unpack the growing convergence of infrastructure, chemistry, costs, and regulation that’s making beneficial reuse a real possibility at scale.
From the logistical hurdles of hauling water across basins to the rise of pilot programs and AI-driven treatment, this episode dives into what’s pushing the industry forward.
Whether you’re leading operations or exploring what’s next in water strategy, this is your insider’s guide to the future of produced water.
Full Transcript
Good day, everyone. Welcome to the water exchange podcast, which is hosted by Select Water Solutions.
I’m Rick McCurdy. I’m vice president of innovation and sustainability here at Select.
And I’m Nate Banda. I’m VP of technology here at Select.
We’ve dealt with produced water our whole career working in the oil and gas space, and and, obviously, produced water has always been something we’re interested in. How do we get rid of it? How do we best handle it? How do we do it environmentally? It seems here lately that we’ve gotten into a crescendo. It’s reached a fever pitch to where there’s a lot of interest in produced water in a lot of different areas.
We work in every major basin in the United States and all those basins have very different needs, very different situations altogether. I think where you and I have been working the most recently, where the problem is arguably the most acute would be in the Permian Basin. Their volumes of water there are enormous and the water quality as far as the dissolved solid content is also very high relative to many other places.
So it poses a greater challenge. Also, area is quite large. So the logistics around moving that water around are are complex and expensive.
Focus on the Permian Basin
So Absolutely. And I and I couldn’t agree with you more on that point. And and that’s something we’ll kind of be touching on several times today as we talk about some of the innovative technology for potentially beneficial recovery of fresh water out of produced water, and that’s that total dissolved solids, that TDS content you talk about. The salinity drives efficiency of return and what kind of technology we’re gonna look at. Mhmm. And you talked about the Permian, and we will probably have a strong Permian focus today since there is such a interest in the Permian Basin. But then you move to other areas like South Texas, for example.
The don’t have quite the volumes down there that we deal with in the Permian, plus it’s a lower total dissolved solids. Typically, it’s it’s probably among that oh, what I say, it’s probably it’s roughly about one third of what the Permian is. So it’s a little bit easier to deal with much like Colorado. Colorado is the same way. We’re very active up in the DJ Basin. They’re in Colorado, and that tends to be a lower TDS fluid as well.
Yep. That makes the problem a little bit easier to solve when it comes to beneficial reuse because removing the water from the salt, as they say, is a little bit easier to do when there’s not as much salt. Yep. So but I think that’s why the that’s once again one of the reasons why the industry has been focusing more on higher tedious regions where it’s where it become where it’s more complicated.
It’s more difficult to do. I know you mentioned the three base basins that we we were kind of previously were talking about, but then also you’ve got some activity in the the Marcellus as well. And you’ve got relatively high TDS water. What are you?
Around a hundred thousand TDS on average, I guess.
It will depend. So it’s of course, the Marcellus play is huge. If you’re up in the Northeastern Marcellus That’s true. Northeastern Pennsylvania, it’s gonna be up closer to the two forty thousand range.
Now you move to the southwestern side, the TDS gets a little better, but you get more volume. Right. Less volume, higher TDS up in the northeastern Right. Part of the Commonwealth and higher.
And then, of course, compounding that is the fact that the overall geology for disposal in the Commonwealth of Pennsylvania is terrible.
Yeah. It’s not good.
So I I lost count. Last count, there was, like, nine active disposal wells within the And so if you’re an operator up in the Northeastern Marcellus, generally, you have two options.
You try to find a way to reuse what produce water you have it out of there. Or you truck it all the way to Ohio for disposal. Louisiana, to some degree is very similar in some ways. Very few disposal wells.
Yep.
Your options are basically trucking it or treating it.
Absolutely. Absolutely. So you end we end up and we participate in that. We see a lot of the produced water in in Louisiana moved over to the eastern Texas side where the geology is better and and it is more conducive to disposal. Yeah. So we’ve kinda covered on all those basins. Well, don’t wanna leave out the Powder River up in Wyoming, which Powder River is much like the DJ Basin.
Lot of lot of the same producing zones Yeah. Low TDS, by and large Lower volumes.
Historical Context of Produced Water Disposal
Lower volumes. So, much easier to deal with. So that kind of brings us to where we are today or at least that we produce water and what we’re dealing with. Mhmm. So now let’s tag on to that a little bit with some of the externalities that that we know we’re dealing with. Historically, disposal of produced water has been the simplest thing to do.
We are running up against the capacity of our existing SWD infrastructure, and I think the industry knows that everywhere, and they’re interested in finding ways to dispose of less. Yep. Yeah. And I think and I think that’s gonna be true.
Obviously, it’s it’s a serious problem in the Permian Basin and probably where it’s the most acute, like I said. But you’re going to run into that as we develop out all the shale that’s available for us to develop in many locations. And so I think the industry as a whole in all the different regions that we work has a keen interest in how this plays out. And I think the best place to, you know, really put it to the fire and see if it’s gonna work is gonna be in the Permian because it’s hard to do there.
Right? But I think the the lessons that we learned there and the solutions that we find will end up being applicable in many other locations just because whether or not those locations are experiencing it today as we continue to develop the resource, you’re gonna run into disposal issues. And and and some places already have disposal. Yep.
I mean, like we said, Louisiana and Pennsylvania, you’re not disposing anything there as it is. It’s very costly. You’re trucking it, you know, hours. So I definitely think the the interest the the the problem is real and the interest is keen.
Economic Factors Influencing Water Treatment
Yep. You’re talking about these externalities, and that’s what I’ve often said as a visual throughout my career when I’m talking about this potential option to beneficially recover fresh water. The it’s always been a cost issue. The cost of disposal was typically here, and the cost to treat and recover this water was somewhere way north of there. Right. And so what’s happening now is with the externalities, we’re seeing two things. We’re seeing technology is springing this cost down.
Mhmm.
We’re seeing these externalities are driving this cost to disposal up. And as those two lines get closer and closer to converging, then this becomes a very realistic thing. Yeah. Now it’s happened before.
It’s it’s up until recently, there was a facility up in Northeastern PA Mhmm. That was treating that Marcellus brine, taking it all the way down to where they were recovering salt out of it in They’re going into the Ohio River.
Correct?
Going into the Susquehanna.
Going into the Susquehanna.
In the Ohio basin?
Yeah. And and so it could be done. It was expensive, but not as expensive as trucking water all the way to Ohio. Yeah.
So it made sense for that to work. In the mid two thousands, there was an operator in the Barnett. Mhmm. That in those days, we believe the only water that we could use in completions had to be fresh.
Mhmm. North Texas was in a severe drought, so there was not an abundance of groundwater available or surface water available. So they started using what’s referred to as a mechanical vapor recompression to treat their produced water, to recover a distillate out of it that they could in turn use in ongoing completions.
Select was in Select was involved in that very early on. I was it was one of the first, actually, that was the first beneficial reuse. We didn’t call it that at the time That’s course. That’s more of a newly coined term, but that was the first such project I was involved in.
Technological Innovations in Water Treatment
We’ve kinda talked about all the externalities and some of the things we’re dealing with. And I and I think what our audience would really like to start hearing about now is some of the technologies and some of the success we’ve had to date and and how we participate in some piloting this technology and doing all that. So why don’t we start out with kind of a high level overview of some of the stuff that we’ve looked at since we started down this path?
Well, since we started down the path, we’ve looked at nearly everything. There’s been there’s been a lot of effort and a lot of money and a lot of time put into this, and we’ve we’ve had a real commitment to it from a very early stage. So I believe our well, I mentioned before, early two thousands, we were involved in some of the very first beneficial reuse. Like I said, they didn’t call it that back then, but desal for, you know, more general term.
And then recently, over the past three or four years, we’ve done several different pilots. And what we’re going across in our in our r and d efforts, we’re looking across all the different technologies. Yep. We are trying to remain technology agnostic and just find out what works and what doesn’t and what everything costs and what the challenges are because there’s going to be a different solution in different locations.
Pilot Projects and Research Initiatives
Right? Yep. You mentioned the DJ Basin. We had a great conversation about that. I learned some things because that’s not something I’ve not an area I’ve worked in as much.
The DJ Basin has low TDS water. Yep. Right? Yep. And they also have, in general, relatively cleaner water than other locations.
As far as the species that are there, there’s fewer of them and they’re less problematic. So you are able to do different things as a solution in the DJ than you are could even consider doing in the Permian. Right?
Absolutely.
And so or in other locations. So we’ve we’ve had a very open mind and we have tried to run pilots with everything that we can run pilots with so that we are equipped with the knowledge and the skills and the the operational know how to be able to be effective and, you know, be there for our customers, be there for the industry when that call comes.
So, yeah, it’s it’s it’s a big question to talk about the different technologies. I think we’ve we’ve looked at all of them. We’ve looked at traditional thermal. We’ve looked at we’re running membrane distillation.
We’ve actually run other we’ve last year, we ran a membrane distillation trial. We’re running another one this year. And we’ve also looked at traditional reverse osmosis. Yep.
And in some locations, reverse osmosis, which is a, you know, more of a commodity currently employed large scale process will be available to us to use which is great. But when the, you know, when your total dissolved solids climb too high, it’s no longer an option. So we need something we need something else.
So we’re looking at many other things.
Yeah. You make a valid point because RO has been used in one form or another to treat a lot of different brackish waters All over the world. Lower PDS, you know. Even seawater. Seawater, you see a lot of seawater RO desalinization plants.
And and the key to the reverse osmosis membranes are particularly those seawater RO and traditional RO is you’ve got And side equation the and pushing the costs down.
Yep. So when we first looked at this, you were maxed out on TDS for RO at forty five to fifty thousand. And now there are companies in the market claiming a scoche over seventy thousand capability for membranes that are not, you know, priced as if they’re gold plated. Right? They’re they’re they’re it’s an actual attainable thing, which is remarkable because it hasn’t been that much time.
Well, and actually, there is now there is a process referred to in different ways.
Some people call it cascade flow, some counter flow Cross flow.
Cross flow RO. Mhmm. And it’s using ultra high pressure membranes. Mhmm. And they they tend to get up somewhere in the neighborhood. They max out about a hundred and eighty thousand milligrams per liter, but it it has to go through several Yeah. Different steps to in order to do that.
And I would say in in our looking into that, they are not as well proven widely used as the traditional RO. The traditional RO, you’ve got I mean, you and I could travel to, you know, several states in this country and dozens of countries around the world and see seawater RO, even high TDS seawater RO because seawater doesn’t have the same, you know, it doesn’t have one TDS. If you’re out in the Middle East and you’re on the Persian Gulf or the Red Sea, especially the Red Sea Yep. You have much higher TDS than the Atlantic Ocean or the Gulf Coast or the Pacific Ocean.
So they’re already deploying, you know, the the original high TDS seawater RO systems have been out there for a while. So we can go out and see these things. They’re done at scale. There’s experts.
There’s vendors. Whereas, we have we have explored some of the more exotic, I guess you would say Yep. Membrane solutions or osmotic solutions, but they are just that. They’re currently more exotic, not as well understood or proven.
Thermal Processes in High TDS Areas
So to case in point, because we talk about some of the TDS limitations, particularly of RO systems. Mhmm. But we couldn’t do that in the Permian because the the Permian TDS is way too high for those those kind of deals. So we have to look at other options in the Permian, such as thermal processes.
Yeah. And we’ve our largest pilot project to date has been a thermal process in the Permian Basin, just north of Midland. It was a successful pilot. We’re looking now at scaling that up.
Yep. We’ve had we had a very good and committed partner with an operator that worked with us hand in hand to get that done. And it’s been it’s been over two and a half year process to get that done, but we’re we’re very excited about that. And the thermal the thermal processes, you know, they’re they’re not a they’re not gonna be a panacea.
Yep. You’re gonna they’re gonna be applicable in some locations and they’re not gonna be applicable in others. They are gonna use more energy than RO, but they’re gonna be much more resilient and robust as far as their resistance to scaling and other things like that and their ability to handle you know, theoretically, you can use thermal processes to extract water out of any level of TDS.
Absolutely. Yeah. Absolutely. And and one thing that I think we wanna really mention here because a lot of times, particularly when I’m talking to academics about doing this and the option of doing this, one of the first things they always ask me is what are we going to do with all the salt?
Addressing Salt and Waste Management
Because in their mind, we’re literally gonna take all the water out and leave the salt and minerals behind.
I have had those conversations as well, Rick. That is a that is a and and you recall early on in this, you know, the industry marching through this the all this work, there were there were attempts to try to go to ZLD, zero Yep. Zero liquid discharge.
That is not really a feasible option. No. The scale of produced water in every basin, I I would argue it’s not it’s not a feasible option anywhere. At the scale that we produce these fluids, the amount of salt that would be remaining is unimaginable. It’s it’s enormous. You’d have literal mountains of salt left over. So our goal here is to extract as much useful resource as we can out of the produced water, provide that for beneficial reuse, and then to dispose of less.
I I agree. Yeah.
And and that that’s been my philosophy all along is all we wanna do is pull a certain volume Right.
Of a beneficial water out and concentrate up that brine.
That’s right.
Continue to use your conventional class two UIC wells for disposal of that waste because just traditionally, that’s what class two wells are. Therefore, produced water is considered a waste. Mhmm. It’s not considered a resource.
We’re currently looking at it about the potential to be a resource. Mhmm. And most recently in Texas, the Texas Supreme Court conferred that, yes, produced water is a waste product of the oil and gas production process. Right.
So we’ve dealt with that.
The Future of Produced Water as a Resource
So we’re A waste product with potential, Rick.
With potential. And you you know very well, Nate, that I’m very passionate about membrane distillation. That’s something I’m very passionate about.
And we’re in the process of doing some work in that area as well. Now Yeah. I’ve said it many times, membrane distillation is great. The reason I like it so well is because the membranes are more robust than we see with RO, so they don’t foul as easy.
As easy. Yeah.
You don’t need the thermal energy that you need for the bigger thermal systems like we just piloted, but they have an Achilles heel.
An Achilles heel is basically twofold.
Hydrocarbons cannot touch the membrane. If they do, they’re gonna change the wet ability. Mhmm. And you can’t let a mineral scale build up.
I would add one more, surfactants.
Surfactants. Surfactants, we also know surfactants can be a problem because again, with wetability issues. Right? If they hit it in a sufficient concentration.
So I think you’ve came up with a unique plan to kinda investigate some of this stuff, and you wanna talk a little bit about what we’re gonna do through our r and d function and to look at that.
So we’ve act we actually just kicked that project off last week in earnest. We’ve been working on building the physical system for a few months. That’s been fully incorporated and programmed and set up on our network so it can be remotely monitored. And we have moved the system into our chemistry department’s headquarters in on the west side of Houston. K. We have a we have a full laboratory there, actually multiple laboratories. This is sitting in one of them.
And we are gonna work with our chemistry team who has vast experience amongst the many of them Yep.
Building chemical packages that will allow these membranes for membrane distillation to survive. So they so we will not see the scaling that has been one of the primary reasons you don’t see them in wide scale use now. Yep. And so we have built a multi path system.
So it is it’s not a system that was pulled from the market or that we’re modifying. It is a from scratch system designed specifically to test chemical packages rapidly in parallel. So we’ll be able to test, you know, several chemical packages at the same time and do so iteratively and quickly without, you know, having to bring in equipment, without having to spend significant time to swap the membranes, without even having to have a person there to operate it. Yep.
Advantages of Low-Temperature Membrane Systems
And so that is we’re very excited about that. We’re very excited about the potential of developing the chemical packages that will allow that to become a reality because in addition to some of the benefits that you mentioned, I would state that its largest benefit is that it is a low temperature, low pressure process. And so many of the components, if not most of the components in a realized system, do not have to be made of metal. They can be made of polymers, which allows such a system to be capital less capital intensive than a traditional thermal system.
It is a thermal system. Yep. I I think there’s some confusion there a lot of times when I speak to folks. It is it is not membrane in the same sense as RO or cross flow RO or any of that.
It is a thermal system. Yep. It is a thermal system that uses a membrane, but it’s a very different membrane. Yep.
That membrane is relatively robust compared to osmotic membranes, but still is, you know, susceptible to scale.
We think we can solve that scaling problem with the correct chemical packages. And once that is done, then we can build these things largely out of plastic, which is not prone to be corroded. We have a much longer life cycle than any of the steel piping, which in the thermal systems is gonna require to be, you know, more expensive alloy steel to be able to survive contact with heated produced water, which is in a, you know, relatively aggressive substance if you’re a piece of metal. So we’re excited about it.
It it is certainly an r and d project. We don’t we don’t have any assurances for the outcome. Yep. That’s something that I’m very proud that Select is doing that we’re investing in something that we don’t know the outcome a hundred percent, but we know the we know that the work is worth it, so we’re doing it.
Absolutely. And I’m looking forward to it. And I’m once and and I agree with you. I realize we don’t have any formal plan set in stone yet, but once we do find these chemical packages that can potentially protect these membranes Mhmm.
Looking forward to us moving to a large scale pilot with a Absolutely.
Membrane. Because as you mentioned, it is a thermal process. The great advantage of it is you don’t have to get up to near boiling No. To get a water. Generally, all you need is about a fifty, sixty degree difference between the hot side and the cool side, and that’s Fahrenheit, by the way, on this to get some sort of water vapor to transfer across and pick it up. So that that’s benefits, which that also helps you stay away from some of the extremely expensive rare metals.
You’re high you’re high nickel alloys and very expensive alloys. I agree. I’m there is great potential there, I’m very glad we’re exploring it.
The Complexity of Pilot Projects
So let’s let’s talk about just briefly at a high level, let’s talk about what goes into a pilot. Because we talk a lot about we’re doing some pilots, we’re doing all this, and folks may get the ideas, wow. You just go out and set up a couple pieces of equipment, and you run it for a month or two, and everything is great, and everything work hunky dory.
That is definitely not the case.
Our larger pilots are multiyear projects. Mhmm. They are millions of dollars. They are thousands of hours of time.
Yeah. So when we talk about setting up a pilot, you you need partners. So we are a competent engineering and service company. We can help folks imagine these things more realistically, manifest those into physical things on the ground, but we really need to be working with operating partners that can bring in bring in the water.
First off, we you know, Select is not a well operator. Bring in the water, bring in some of their know how because I would I would say that our operating partners tend to have more of an academic, I guess, presence within their companies than we do.
We are much more focused on, you know, get making things actually happen, getting things done, turning the screws, building the things, operating the things, which we have great expertise at. The operators have less expertise there.
But we need their academic, you know, wherewithal. And and and they that’s been that’s been kind of the way that we have done it thus far is they’ve been providing tremendous support on the theoretical engineering side for some of these things, and then we have been providing the support for the practical applied engineering for this stuff.
The Importance of Flexibility in Pilot Execution
I I agree. And that’s one of the things is that these pilots people need to understand that the the people that are gonna come together to help organize and run the pilot need to be very nimble, very quick thinkers Mhmm. Because very seldom do does you you plan a pilot and it’s gonna go one, three, then it goes one, two, three.
That’s right.
And when that doesn’t happen and you need to pivot and do something else, it can’t be we’re gonna shut the pilot down and No. Week or ten days from now, we’re gonna decide what we’re gonna do. It’s we need to decide on the spot. Mhmm. Here are other options. Let’s evaluate those quickly, see which one we like the best, and then move in that direction.
You gotta roll to punches.
Absolutely.
Abs that that is that is the name of the game for sure, Rick. It is a it can be daunting some sometimes, and it’s honestly with my team.
It is a it’s something I wake up thinking about, which is how am I going to maintain everyone’s motivation and maintain morale through some of these things because I could tell you it is a fight for a lot of these these systems. Like, you’re starting off with essentially something it’s not essentially. It is a science project. It has not been built before in many cases.
And you are going to learn a lot and you’re gonna learn it the hard way. Yep. And you’ve got to have a team that is able to be flexible enough to do that and do it effectively. And I think that’s one of the things that we bring to the table and that my team brings to the table is being able to do it the hard way and and make things work and be successful doing it.
You you talked about the quality operators that we’re working with on some of these pilots. Mhmm. And I believe there’s a lot of operators out there that have an interest and and they they have a strong internal interest within their company at evaluating some of these technologies.
Mhmm.
How best would it be for them to approach Select to discuss these opportunities?
There’s a number of ways you could approach us and I’ll get into that in a second, but I think I would say there’s also a few things that should be considered. Right? As I mentioned, these are large scale commitments from both the technical partner such as Select as well as the operating partner. And so I think that operators need to understand that before they consider whether or not they wanna get involved one with one of these pilots, you know, at that particular juncture.
They you would we would require a commitment of personnel, a commitment of a location so that we would have you know, because we we we would need a physical place to set this thing, and you’re gonna need some personnel from the operator side, some of their high level technical folks. So you’re more your physicists, your top level engineers.
Yep.
We’re gonna have it require a long term major time commitment from some of those people. So I think the first question you would wanna say is you wanna ask yourself if you’re an operator is, do I have the location? Do I have the people? And then do we have the time?
Because realistically, for a large scale, you mentioned that four to six hundred barrels a day, those are relatively large facilities still. And so even a time to build, you’re talking about twelve months realistically. Yep. Maybe a little bit longer.
You you include engineering in that. You’re probably closer to twenty four months. Yep. To engineer, build, and realize the operation of something like this is a twenty four month process.
A few minutes ago, you were talking about, particularly when we’re partnering with operators and stuff like that, the the personnel commitment, right, that we needed people available, people that were very experienced in dealing with these kind of projects that we could lead on when we needed the decisions made and stuff like that. But it but at the end of the day, as we move to a commercial scale with a lot of this stuff, that’s one of the things that we’re probably gonna really try to steer clear of is a large personnel commitment to running them because, obviously, that is a large cost aspect when you Oh, yeah. Put a commitment.
The Role of Automation in Operations
So how do you think automation is gonna play into this to where we can operate these things efficiently and safely with less people on board?
It is going to be absolutely critical. We have incorporated automation into all of our operations for the exact same reasons. We’ve got to it’s not only cost, which it certainly is a big component of it, but it’s also safety. Your exposure to a probability just increases your the likelihood that something bad is gonna happen.
Right? Yep. So we try as much as possible to allow our, you know, our humans to not have to be on-site next to risk. And so that’s gonna that’s gonna continue to be true with these facilities.
It’s been true with our disposal operations, our treatment operations, our transfer operations. It’s going to be true with our desal operations. And we are already I mentioned it earlier. We’ve already incorporated automation very heavily into these pilots.
It would likely be uneconomical to do what we’ve done thus far without the significant amount of automation that we have developed and deployed into even these pilots. Yep. So we ran we’ve run a few thermal pilots. The thermal pilots all have automated control valves, automated data capture, remote HMIs, so folks do not actually have to physically be there.
That’s especially critical for our operator partners because many of your high level your physicists, your high level engineers, your PhDs, they travel around a lot within those companies to be on hand for multiple different issues and things that they’re working on. We need to still allow them to be informed about what’s going on with these projects that are very important strategically to their companies and very important to them because they’re a big part of their work life. But, you know, we we we have I have an example. We have a the the project we did in West Texas, one of our key engineering partners on the operator side was frequently working in the Middle East and in the Caribbean on offshore platforms.
He needed we needed him to still be involved, So we gave him remote access, secure remote access, which actually involved us supplying him with some equipment for his office and and then giving him credentials that allow him to come in and observe, and that’s critical. So even though it’s a pilot, we still invest significantly in automation and controls for both safety and economics, like you mentioned.
Integrating AI and Machine Learning in Operations
And and so with that hand in hand with that and, you know, we talk about the buzzword nowadays being artificial intelligence. Do you anticipate in the future that that will somehow be involved perhaps with machine learn hand in hand with machine learning to help these facilities operate at their topmost efficiency?
I think so. So, you know, AI is bandied around a lot, and it’s sometimes confusing what that is actually, know, practically doesn’t mean.
I think for what we do, something that I can see immediately where, you know, what machine learning, that’s a hundred percent something that we’ll be dealing with.
Absolutely.
You’re talking the amount of data that you’re talking about from some of these is staggering. Yep. You’ve got hundreds of sensors. You’ve got hundreds of hours of run time with hundreds of sensors, and you have many different setup variables.
And you’re trying to control for different variables, understand how tweaking, you know, variable a affects variable b, those patterns can be sometimes hard to suss out of very very large datasets and the machine learning algorithms that are available and relatively inexpensive nowadays and easy you know, there’s a lot of folks with experience controlling them. Select has Select has invested in a data science and data engineering team Yep. That they’re distributed across the country. And those folks use a lot of machine learning and AI to help us suss out that data and make it digestible.
That’s especially true when it comes to communicating a lot of complicated data to management stakeholders because you you need to make that digestible and understandable and that’s one of the things we call it our our DEA apart department, our data engineering and analytics department. They have been instrumental in helping us kind of disseminate and digest that data.
You know, we’ve kinda taken taken a look at all that, taken a look at what we’re doing and very proud of the work that we’re doing in this area.
Future Directions for Desalination Systems
Where do you think ultimately all this is headed?
I mean, that is the multi billion dollar question, isn’t it, Rick? Yeah. I think but if I have to guess, if I have to, you know, throw something out there, I would I would bet that we will see these systems the first locations that you’re gonna see large scale commercial desal systems are gonna be there’s gonna be a few critical places that have all the right ingredients. Yep.
It’s all about location. You’re gonna find a location that is just perfect for it. And it it it’s begging for it and if once you find that location, that one’s kind of a slam dunk. Yep.
And it it’s almost you can almost look at it. I don’t wanna use this word, but you can almost look at it as a subsidized location. Right? Because the location you may have an immediate use without any without any type of regulatory help.
You’ll have an immediate use Yep. For the distillate. You’ll have access to disposal. You’ll have access to heat or energy of some kind that’s available to you to use now, so you’re not waiting years, in many cases, to get power to such a to a location.
Yep. And you’re also gonna have access to a network that can bring you large amounts of water reliably. Absolutely. And I I think I I guess I missed one.
You also have need to have access to pretreatment. Every single one of the technologies that we’ve looked at and everything that we’ve talked about today requires a significant pretreatment step before it can go to desal. And that is something else that Select has, really invested in is why we have over twenty permanent treatment facilities and those treatment facilities are going to be a necessity. And whether that’s with us or anyone else in the industry, you’re going to have a treatment facility, you’re going have pipelines, you’re going to have disposal, and you’re gonna have to have energy.
There’s gonna be a few spots where that just exists already. It’s just there. And that those are the low hanging fruit and I think you will start to see commercial units going into those locations within the next twenty four months, realistically. Yep.
And then whenever you get past that, doing that, we’re all gonna learn a lot. Industry is gonna learn a whole bunch of what we don’t know currently by doing that. And those are the places to learn because they’re gonna be the lowest risk to your capital because they have everything already there. Those you’re gonna you’re gonna find locate you’re gonna need to find locations where all the components are there for their own causes and their own purposes so that you’re not having to invest capital to build all of those components just for the beneficial reuse.
If you if it’s all there already, then you can add beneficial reuse for relative to the cost of everything I just mentioned, a relatively low cost. I mean, it’s not gonna be cheap. Yep. But relative to the pipelines, the treatment facility, you know, the disposal, you’ve got lots of money in that.
And so adding your your beneficial reuse component will be relatively inexpensive and it’s just gonna be the place where you do it. And we know you and I are a part of conversations and aware of others where this is happening. Like, these facilities are gonna be going in and I think we’ll then we’ll learn.
Yep.
And as we learn, we’ll make we’ll be we’ll make those facilities more efficient and we will make them less costly to build and then that opens up the doors to place them in even more locations. Yep. Right? Because as they become cheaper and as they become cheaper to build on the capital on a capital basis and then have a lower opex, then it just opens more doors.
I would also say the industry, not just Select, is moving forward to developing more and more treatment facilities. Yep. And those treatment facilities are necessary to this. And the more of those that are around, the more likely it is that you’re gonna be able to successfully do desal because because those treatment facilities by themselves are expensive, complex Yep.
And large endeavors.
So getting more of those built just opens up more doors. So I think we’re we you can see the light on this. Right? Many people are building treatment facilities.
Many people are building distribution pipelines including Select. We’re building hundreds of miles of produced water distribution pipelines. That is the necessary infrastructure to even really begin having a legitimate conversation about beneficial reuse at scale. And that infrastructure is going in today.
So we’re we’re pushing towards the world where we will be able to successfully do these things and I think it’s gonna be exciting. I think it’ll be good for the oil field and it’ll it’ll be good for society in general. It will create a a new source of water, which it just, you know, that doesn’t happen very much.
The Role of Data Centers in Water Demand
Absolutely. And I agree with you completely that we’re definitely moving in this direction. We’ve already talked about the fact that the states realize that they’re gonna have a a lack of fresh water in the coming fifty years for their citizens. But and that’s without we haven’t even touched on new avenues where water could be used, the such as in data centers. Right. You know, that’s the hot topic of the day is we’re talking about AI. We’re talking about the data centers that are gonna be needed to feed these AI monsters.
They need a lot of cooling.
And you gotta cool them. You gotta cool if you put in a a combined combined cycle natural gas power plant in order to feed electricity to the data center, it’s gotta have cooling.
Gotta have cooling.
The data center itself’s gotta have cooling. And these are not small scale. These average size data centers are gonna use somewhere in the neighborhood or require somewhere in the neighborhood of sixty to a hundred thousand barrels of water a day for their cooling. And, well, that’s why, typically, you see the data centers we have now tend to be put in place in areas generally where they have access to a river to where they can pull water out of a river, large river. So they end up be up in the northwest even though we are seeing some, but there’s a tremendous amount of interest right now in West Texas because natural gas is so cheap.
Electricity is cheap.
Electricity is cheap out there. Yep.
And so that’s another big thing that you need is lots relatively cheap out there.
That’s right. But they don’t have the water. They don’t have the fresh water. Produced water could fit that need Mhmm.
At scale, and it produced water is gonna be out there as long as we’re producing oil and gas. They’re gonna have it available. So that that could be a potential. So I I agree with you completely.
I think probably in the next twenty four months, we’re gonna start to see some systems go in at least what we would call a commercial scale. When we talk commercial, typically, the pilots we’ve seen so far and the pilot we ran ran are somewhere in the neighborhood of four hundred to six hundred barrels of distillate or permeate a day. Mhmm.
Coming out, as we move to these commercial systems, I expect the larger ones at first are probably gonna be somewhere in the ten to twenty thousand barrel a day permeate or distillate Right.
Range coming out. And then ultimately, what you will most likely see if you want more volume than that is you’ll just see them kind of domino together.
Yeah. You’ll see more locations. I don’t think and I think that depends, obviously, the size, the the techno economic analysis that’s gonna determine what a reasonable size is is gonna vary by region. Yep. Right?
In regions where it requires more energy, you’re gonna be energy constrained on how big you can make these things. And so at least in any one location. Across the entirety of the Permian Basin, there’s a tremendous amount of energy available. But in any one location, you may not have you’re gonna have a limit on how much energy you can practically bring to that spot.
Absolutely. When you start talking about running RO, you know, that’s much less energy intensive. Yep. And you we have precedent for massive RO systems all over the world.
So you you could start to make those as, you know, that starts to get as big as you wanna dream it and how much and as big as the water you have available, I think. But for thermal systems, I think you’re right. You’re gonna it’s gonna be you’re you’re gonna be joining up smaller plants, basically. They’re gonna rely heavily on those pipeline networks.
They’re gonna be distributed. Your water even though we have a pipeline network, moving water across that pipeline is not free. Right? It it requires energy to move water across the pipeline.
So you’re not gonna want to move water more than you need to. You’re gonna wanna move water, move it as few times and as short a distance as possible and use the energy that you have available without having to make major capital investment into energy infrastructure. And so I think you’re gonna see I I agree with you. I think you’re gonna see that ten to twenty thousand maybe in, you know, somewhere in that range.
And then you’re going to see those placed around these networks to take the best advantage of available energy and water infrastructure.
Regulatory Challenges in Produced Water Management
I agree. Let’s talk about some of the regulatory challenges that are associated with produced water.
So the industry pressure Mhmm.
To find other more useful and socially beneficial ways to deal with produced water has basically finally got to the legislative side of the world. And I think it’s a good thing. It’s it it has really been surprisingly more of a conversation.
I know you’ve dealt with the regulatory side Yep.
A lot more than I have. In my previous career, I was a scientist, so I didn’t and I didn’t really stay in the, you know, the regulatory pool very much. I’ve been pleasantly surprised that how much of a conversation it’s been. It’s a conversation with the industry. I mean, I I think you should I guess it’s a good time to talk about the con the consortium And I think the whole concept of it is actually kinda neat. It’s the concept of merging academia, business, and the state to have a conversation, to vet ideas, and see what’s gonna be, you know, the best benefit to society. Right?
Absolutely. And that and I’m glad you brought that up because that I want to point out the fact that industry has been actively looking at this and challenging ourselves over this topic for years now. I remember I mentioned North Texas earlier. So we had the Barnett Shale Water Management Council, which was operators in the Barnett focused on produced water and and how best to handle completions and all that. After that, we had the Permian Basin Water Management Council, which has been an active function for about fourteen years now, and and that was also a group of operators and suppliers and midstream working to figure out how best to use produced water predominantly to offset freshwater use.
And they’ve done a phenomenal job. And then more recently, we’ve seen the states really start to take a look at their fifty year water plans and realize that ultimately, they’re not gonna have the freshwater they need for their citizens based on their usage now and their expected growth and what they plan to do. So hand in hand with that, the states have started taking a look at this produced water because there’s there’s very little instances of new water available. Yeah.
It’s unaccounted for water, and it’s probably some of the only unaccounted for water that’s gonna be brought up to the surface. I mean, because I guess, theoretically, you know, you can there is a possibility of going in and bringing up brine or saline water independently. But those wells are deep and that is very expensive. And so it’s likely not a viable economically viable solution.
Right? Yep. But since the industry is already bringing it up, that is water coming to the surface incidentally that is unaccounted for water. It’s not it’s it hasn’t been claimed, which in this day and age, especially in the drier parts of this country, is very rare.
Formation of Water Research Consortiums
Yeah. Yeah. Absolutely. And so kudos to New Mexico. They were the first. In twenty nineteen, they decided to stand up and create the New Mexico produced water research consortium Mhmm. Which it officially kicked off right at the start of twenty twenty just about a month before COVID hit.
And then shortly thereafter, a year or two later, Texas stood up, the Texas produced water consortium, and now Colorado has stood up, the Colorado produced water consortium. And I’m very happy to say that I represent Select and serve on all three of those consortiums. I try to be a very active member. I try to help drive the conversation and get us in the direction. It’s very beneficial to to industry as a whole to be part of that conversation, beneficial to us to take a look at different technologies that are being piloted.
I genuinely think I think it’s sometimes hard to find examples like this in in society, but I think it’s beneficial to all the parties involved. The conversation needs to be had. I don’t think you could get good regulatory action unilaterally. I I think it would be blind to the realities of industry.
And I don’t think that the industry is going to be able to do I just don’t think we’re equipped to to the academic challenges, some of the research that’s gonna be necessary. And so the inclusion of the academic side of society is also really good. Yep. On some of the projects we’ve been working on, we’ve been working with, you know, various universities and it’s been very constructive.
I’ve worked some with New Mexico. I’ve worked some with in Texas. What what’s going on in Colorado?
So let me say this about the Colorado consortium. And then this is the other two consortiums are just basically a if you have a entity, whether it’s a company or an environmental NGO or some other university or regulator, you just pay a fee and you get to be a member and participate. Colorado was a little different. Their legislature set it up as a set body that it was intentionally intended to be a group of stakeholders that would cover all the voices that should be at the table.
So there’s there’s academics on that consortium. There’s a certain number of seats for academics. There’s a certain number of seats for state or federal regulators, certain number of seats for industry participants, certain number of seats for someone like me who’s considered someone with experience and expertise in produced water. And so but it’s it’s interesting.
I’ve been a part of that. It’s been up and running for a little over about a year, going on a year and a half now.
Interesting conversations.
We’ve been able to and not only did the the state legislator set it up that way, but then they said, oh, by the way, here’s nine deliverables that you would do back to us by certain such date, and each one had its own date. And I’m very proud to say that this group of folks have gotten together and met regularly on a basis, and we completed all those deliverables. Just turned in the ninth deliverable here a couple weeks ago to the legislature. So in Colorado, particularly in the DJ Basin. Now Colorado’s got several different producing basins. Right?
If you go over to the western side of the state to the Piance, they’ve been reusing produced water up there for a number of years because they had a lack of water, and it was also difficult to find disposal and and move it in that area.
There’s not a lot of infrastructure in that area.
No. Yeah. No. Now you come into the DJ Basin, very little reuse. Yeah. Because, again, it’s some of the regulations dealing with how you can store water and how you can move water and do all that.
But the state’s really interested in looking at how I’m reducing freshwater use in the DJ Basin.
So that’s kind of what this Colorado consortium is really focused on now is how do we help I would think that in Colorado, the DJ is definitely the big prize.
Absolutely. Like, you’ve got the infrastructure. You got the most activity. Yep. Yeah. So you can have the largest volumes of water.
It’s also as far as beneficial reuse, it’s also closest to the potential reusers. Right? It’s the your population center there on the front range is closer to the DJ than pretty much any other anywhere else.
And as far as hydraulically, it definitely is because you’re not having to go up and over or down large mountain passes to get to them.
Absolutely. Yeah. So so one of the things that the consortium has done so far is they’ve been able to get everybody to come to agreement on having targeted goals for reuse increase up in the DJ Basin over the next decade or so. Industry has agreed to to meet those targets or go after those targets, which will help offset freshwater use. Mhmm. So we’re in West Texas, New Mexico, we do a tremendous amount of reuse and and offset a tremendous amount of fresh water.
Mhmm.
That is the goal now to move into Colorado and kinda do that.
Challenges in Implementing Beneficial Reuse
What are the things that you see that are challenges with the states that are currently considering or allowing beneficial reuse. So you mentioned Texas, New Mexico, and Colorado. And I know that you’ve got the consortiums there, you’ve got legislation there.
What are the challenges? What are some of the things that you think they may have missed or that are going to pose a challenge for entities trying to actually make these projects real?
Obviously, in Texas, we’ve seen a some tremendous steps forward through probably beginning in the twenty thirteen, twenty fifteen legislative cycle moving with helping to recycle produced water and reuse it. So they the regulatory body in Texas, Texas Railroad Commission, they started adopting rules to help with larger storage and larger movement of water, which allowed us to significantly offset freshwater usage, particularly on on hydraulic fracturing completions.
And right now, I guess you’re speaking about the more traditional and entrenched reuse for oilfield exclusively.
Exclusively for oilfield.
You’re talking about cleaning up our brines.
That’s right. Cleaning up our produced water as you mentioned in our treatment centers That’s right. To where now we can get it of a quality, it can be reused in a completion and used in place of fresh water if necessary. Yes, And and we’ve done that. We do that a lot of times.
We provide a hundred percent produced water That’s right.
For frac.
New Mexico has moved heavily in that direction as well through their produced water act that came into place here a few years back and and not only encouraged but potentially penalized using fresh water Mhmm.
In completion. So it really encouraged industry to try to use produced water as much. So we also see a lot of treatment of produced water up there for reuse and completions. Now when we go to Colorado, I mentioned earlier that the on the western slope, the Peyonce Basin, we’ve seen reuse up there for decades now, but there’s also not a lot of disposal infrastructure in place. We move into the DJ Basin, and we haven’t seen a tremendous amount of produce reuse.
Because as you mentioned, we have a much denser population over in that area.
And because of that, the state is taking efforts to More cautious approach.
More cautious approach. Right? So, open air impoundments for storage of a treated produced water are not allowed in the DJ. Well, the problem there is when you’ve got a completion that’s taking on average seventy, eighty thousand barrels of water a day, if you wanna make a significant dent into how much of that freight is fresh water You’ve got be able store it. Feed that water to them.
As I mentioned before, these systems function successfully through a combination of large scale treatment facilities Yep. Pipelines, and a part of that is storage. You’ve got to have large scale storage because the the supply and the demand very seldom link up in time exactly.
And then there’s also a time delay from the time that the water is produced. It has to be it has to be transmitted from wherever it was produced to a location for it to be treated. And then from the location for it the treatment location, it needs to be then transmitted to its re reuse location and that is whether or not we’re talking about desal or just reuse of treated produced brine. And I think it will that will be a difficulty in Colorado because as I mentioned, the the pathway to getting to beneficial reuse includes storage pipelines and large scale treatment. And so if if you’re going to have rules that make it more difficult to have those things, it is going to be much more difficult to realize any kind of large scale beneficial reuse.
Example of Water Treatment Facility Operations
I agree.
You know, if we if we use just an example, say we’ve got a facility up there and now that’s treating produced water, well, facility takes in about ten thousand barrels of water a day and cleans it up.
Mhmm.
In a perfect ideal world, if we were using a hundred percent of that water for our completion, an average completion, we could offset about one eighth of the current water usage on a day to day basis because that’s all we we treat. Hundred we treat ten thousand, we could send out ten thousand.
But if you want us to be able treat upgraded that facility to fifteen thousand.
There you go.
Well, if you wanna treat twenty, thirty, forty, fifty percent, offset fifty percent Yeah.
Of the freshwater use, that’s why we have to have those large storage impoundments.
It’s gonna be necessary. The timing of all the different components is just rarely gonna match up perfectly so that it could flow through in one pass. You’re gonna you’re you’re you’re gonna have multiple steps. You’re gonna have to store between those steps, and you’re gonna have to store for the demand afterwards for whatever you for the products that you create for sure.
Thanks everyone for joining us today at the Water Exchange podcast for this in-depth dive into produced water and the potential future that it holds for us. Feel free to go to our website at select water dot com and check out other podcasts that are available there as well. Thank you.
To our podcast audience, these presentations hosted by Select Water Solutions, Inc., referred to as “Select” or the “Company,” including any associated discussions, documents, or materials are presented for informational purposes only and does not constitute professional advice or consulting services. The opinions expressed during the podcast reflect those of the individual presenters and do not necessarily align with the views of Select or any affiliated oil and gas entities. To the fullest extent permitted by law, Select, its agents, and experts disclaim liability for any damages, losses, costs, or expenses—whether direct, indirect, or consequential—arising from your engagement with the podcast or related materials, even if due to negligence. By accessing this content, you acknowledge that it may contain inaccuracies, is subject to change without notice, and is intended solely for your general use.