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As the summer of 2013 threatens to bring an intensifying drought, Texas legislators are looking for ways to conserve water.
One such proposal, HB 379, set to be debated in the House Energy Resources Committee on Wednesday, would impose a 1 cent-per-barrel fee on oil and gas wastewater disposed of in wells.
Injection of wastewater underground is drawing scrutiny as lawmakers consider water recycling and other options that could reduce the amount of fresh water used in hydraulic fracturing, often called fracking, and other oil and gas extraction processes.
The bill introduced by Rep. Lon Burnam, D-Fort Worth, would dedicate the proceeds from the injection well fees to an oil and gas regulation and cleanup fund.
"This penny-a-gallon fee is not enough to cover the difference between recycling and not recycling from fracking, but it does put a thumb slightly on the scale," said Conor Kenny, chief of staff for Burnam. "Every time someone writes this check, it forces them to think about how they could have used a less water-intensive method of fracking or how they could have recycled it and used it again."
Owners charge for the use of their wells, but the state charges no per-barrel fees for companies' discharges into the more than 50,000 injection wells in Texas, according to the Texas Railroad Commission, which regulates oil and gas operations.
"The best way to encourage water recycling is to make waste injection more expensive," said Luke Metzger, founder and director of Environment Texas. "It is far cheaper to inject waste underground than to recycle it. In Pennsylvania, it is more expensive. They have to ship it to Ohio. As a result, the economics are more favorable to recycling than shipping it out of state."
The Railroad Commission recently updated its rules to encourage more water recycling but stopped short of requiring operators to recycle water used in oil and gas drilling.
Commissioner David Porter declined to comment specifically on Burnam's bill.
But he said in an interview that he would rather see the cost of water recycling reduced by market competition than by regulations.
"In a certain geographic area, you might have a lot of recyclers, and recycling could be done at a reasonable cost," Porter said. "In other areas, it would be absolutely cost prohibitive to mandate recycling."
But it is the higher disposal costs in Pennsylvania that make recycling a more desirable option for many operators, said Judith Herschell, CEO of Pittsburgh-based Herschell Environmental, a water and wastewater engineering firm.
Herschell said she has heard Texas operators estimate that it costs as little as 25 cents a barrel to dispose of wastewater using an injection well, making the case for recycling much more difficult.
"It's so cheap to dispose of water in wells, how can you blame them?" Herschell said.
Brent Halldorson, chairman of the Texas Water Recycling Association, noted, however, that recycling reduces the need to purchase water. And because the recycling processes occur at or near the well, transportation costs are lower.
"Transporting the new water and then getting it to the disposal well costs you more money," Halldorson said. "If we can reduce the transportation costs, even though water disposal is cheap, recycling can be more cost effective."