Lux Research Shows New Oil and Gas Sources Require Innovation in Water
Report assesses companies and technologies for treatment of produced water
Along with the crude oil and natural gas that fuels modern civilization, the energy industry brings nearly 233 billion barrels of wastewater from beneath the earth’s surface every year. This so-called “produced water” can contain a variety of contaminants, from oil and grease to chemicals, microorganisms and radioactive elements. Oil and gas producers need to treat this water before disposal or reuse. In its latest report, Lux Research surveys the challenges and opportunities associated with treating produced water, and identifies which technologies and developers are best positioned to address the task.
The report, titled “Water Technology Unlocks Future Oil and Gas Reserves,” provides a comprehensive examination of the different contaminants, treatment technologies and costs associated with treating produced water, and ranks 33 companies across 15 criteria.
“On top of the large volumes of produced water generated from day to day, there is also a great deal of variety in the contaminants from site to site,” said Reka Sumangali, an analyst for Lux Research and the report’s lead author. “Because of that variation, no technology provides a silver bullet that can treat every contaminant or application. Plus, most regulatory drivers focus on single contaminants, so there is little push to develop a cure-all technology.”
In preparing its report, Lux Research interviewed dozens of technology developers and oil and gas companies in order to evaluate the available technologies for treating produced water. Based on these interviews and its extensive database of water industry players, Lux Research ranked and plotted technology developers on a grid measuring two axes: market value and technology value. It applied grids to four application areas: onshore conventional oil, onshore unconventional oil, onshore unconventional gas and offshore exploration. Among the report’s key findings:
Regulation drives technology deployment: Technology providers and energy companies interviewed by Lux Research all agreed that regulations drive the use of new solutions, but regulations requiring more than basic treatment have not yet been established. That situation, however, is changing as regulatory environments in the Middle East, North Sea and South America all are becoming stricter.
Accelerating membrane research is leading to new water treatment innovation: A wide range of technologies, including membranes, advanced oxidation, coagulants and UV disinfection can address the hydrocarbons, salts, solids and microbes in produced water. But many of these contaminants can reduce a particular technology’s ability to effectively treat other contaminants. One technology area that has seen notable research is ceramic membranes, which are more resilient to hydrocarbons, and easier to clean when fouling occurs.
Corporate partnerships provide the clearest growth opportunities: Partnering with a larger technology developer holds the most opportunity for smaller companies. Those that bring an established technology or market value to the table can enable a larger technology provider to extend its treatment train–merging, for example, a membrane company, an ion exchange company and an absorbant company.