Tuesday, August 14, 2012

Oil companies desperately seek water amid Kansas drought

@CNNMoney August 10, 2012: 10:27 AM ET
Oil companies in southern Kansas desperate for water for fracking are resorting to extreme measures like digging their own ponds and water wells.
NEW YORK (CNNMoney) -- Oil companies drilling in the drought-ridden fields of southern Kansas are taking desperate measures to get the water they need to tap into the state's oil reserves.
Huge amounts of water are required to extract oil, especially when companies use hydraulic fracturing, or fracking, which requires millions of gallons of water to crack the shale rock and bring oil to the surface. But now that the entire state is in emergency drought status, with only 1.19 inches of rainfall last month -- the 10th driest July on record -- unprecedented water shortages are making it difficult for drillers to get the water they need.Some companies are paying farmers for any remaining water they have left in their ponds, drilling their own water wells, digging ponds next to streams or trucking in water from as far away as Pennsylvania -- all of which is costing them a handsome sum of money and time.
"This has been the most unique challenge I've run into in a while," said Ruben Alba, partner at Petro River Oil, one of the smaller oil companies that has entered the oil play in Kansas over the past year.
Desperate for water: Petro River Oil had plans to frack and drill its first oil well last month, but much of the water supply the company intended to use was cut off when the state limited access to certain streams this summer due to the drought.
Alba's company drilled its own water well, but it wasn't pumping enough water, so he hired a company to truck water in, delaying the job by about six weeks. By the time drilling was complete, the company had paid nearly triple the amount it originally budgeted.
To avoid running into this problem again, Alba turned to local farmers and ranchers, asking them to sell his company water from their existing ponds or let him drill water wells on their land. But the whole process was taking up so much time that he hired a company called Select Energy to do the legwork for him.