Until renewable, sustainable sources are fully developed, the demand for fossil fuels will continue to grow. According to the International Energy Agency’s (IEA) most recent World Energy Outlook, the production of conventional crude oil, the largest single component of the global oil supply, will remain at current levels before declining slightly, to 68 million barrels per day, by 2035. To offset declining production at existing fields, 47 million barrels per day of additional gross capacity are required. This volume is twice the current total oil production of all Organization of Petroleum Exporting Countries (OPEC) in the Middle East. A growing share of this output (10 million barrels per day) will come from unconventional sources.
The IEA forecasts a bright future, even a golden age, for natural gas, especially for so-called unconventional gas, such as shale gas and coal bed methane. Unconventional gas now accounts for 50% of the estimated natural gas resource base. By 2035, unconventional gas is predicted to rises to 20% of total gas production, although the pace of development will vary considerably by region. The growth in output also will depend on the gas industry dealing successfully with the environmental challenges. “A golden age of gas,” says the IEA, “will require golden standards for production.”
The demand for carbon-based energy is a major market driver for products and services used to treat the water produced during oil and gas exploration and production (E&P). Produced water, the effluent that rises to the surface during E&P, includes naturally occurring water in energy deposits and water injected into formations during drilling processes.
Produced water comprises approximately 98% of the total waste volume generated by the industry. Current global E&P activities generate more than 115 billion bbl per year (bbl/y) of produced water. For every barrel of oil, an average of three barrels of water is produced. In the U.S., the water to oil ratio (WOR) averages eight barrels of water to one of oil. On average, for every barrel of oil currently recovered, eight barrels of wastewater are also generated. During the next 15 years, the water to oil ratio is forecast to increase from 8:1 to 12:1. In the worst cases, the WOR reaches 50:1. To dispose of produced water, energy companies pay from $3 per barrel to as much as $12 per barrel. With the need to manage such large water volumes, the oil and gas production industry has become as much about water as it is about energy.
In addition to large water volumes and high disposal costs, energy developers using traditional produced water practices are facing increased opposition from environmental activists, local and state governments, and the public. These groups are concerned that the water is leaking from traditional containment pits and entering groundwater and surface water bodies. Historically, produced water has been contained temporarily in pits, and then either transported to treatment plants or evaporated.
During a producing oil well’s life cycle, it initially produces oil along with a small amount of water; but, over time, the percentage of water increases. Throughout the well’s service life, the produced water must be separated from the oil it contains. Following treatment, the water may be handled via one of three methods: safely discharged (used mainly in offshore applications), reinjected into the hydrocarbon formation (used in onshore, coastal or environmentally sensitive areas) or reused (either to maintain reservoir pressure and enhance heavy oil production or in other beneficial applications). In most world regions and for all of the end uses/disposal options, treated water quality must meet certain standards, including low toxicity, high biodegradability and low potential for bioaccumulation in the food chain.
A number of water treatment technologies and equipment types are commercially available for use at oil or gas production sites. These processes can reduce the cost, inefficiency and risks associated with treatment pits and the transport of toxic water. The treatment technologies include methods for de-oiling, de-sanding, desalinating and disinfecting produced water. Numerous systems types are on the market. Separators; hydrocyclones; and distillation-, ion exchange-, adsorbent- and membrane-based units, as well as proprietary equipment and combinations of equipment are among the choices.
Some of these products and technologies enable the treatment of produced water to a quality suitable for beneficial reuse. Presently, most of the water reused is employed for reinjection in enhanced oil recovery operations. However, there is also future potential for recycling the water in agriculture or a new source of municipal or industrial water supply, especially where water scarcity is an issue.
This report is intended to provide an in-depth analysis of the market for produced water treatment equipment. The study examines market value by world region, equipment type and offshore versus onshore use. The world regions discussed are the Americas, North America (the U.S., Canada and Mexico), and Central and South America; Europe; the Asia-Pacific region; and the Middle East and Africa.
The market evaluation by equipment type looks at produced water treatment systems within three broad categories: primary and secondary treatment oil separation equipment (minimizes oil in water content to 25 parts per million [ppm] to 30 ppm), tertiary treatment equipment (further reduces oil in water to less than 10 ppm) and advanced treatment (processes for desalinating produced water and enabling zero liquid discharge).
In the market analysis by hydrocarbon resource, value and growth are evaluated for equipment used in treating produced water from conventional oil and gas production and the development of unconventional resources: tight oil, oil sands bitumen, shale gas and coal bed methane. (For the purposes of this report, tight gas, natural gas that is difficult to access because of the nature of the rock and sand surrounding the deposit, is included in conventional resources.)
Because regulations governing offshore versus onshore produced water discharge differ, the equipment market also is evaluated by that parameter. In addition, the two markets are growing at different rates and are propelled by somewhat different drivers.