Monday, March 21, 2016

21,840,000 gallons of water from El Paso to frackers per well per year

Water hauling is a legitimate and necessary business. More than just the colonias which need water, the construction, quarrying and other businesses need water to keep dust down. But how much water should go to Torchlight Energy Resources which is fracking just ten miles from El Paso on the Diablo Plateau, the same geographical area as the Otero Mesa depending on whether you are in New Mexico or Texas.

According to the Hudspeth County Journal, Torchlight's first test well required 80,000 gallons of water per day purchased from the City of El Paso. It turns out that the City (El Paso Water Utilities) did not sell water to Torchlight nor has a metered pipe running to the well. The Journal has yet to edit their online story to reflect this fact. Yet, where did the water come from? Water haulers purchase the water from EPWU and re-sell it to their customers. (This does not include water purchased by CEMEX or TxDOT or such.) There are three TCEQ licensed water haulers in El Paso County.

Hudspeth County Journal did do a follow-up story. The drill site superintendent, Jesus Garcia, was quoted as saying that 84,000 gallons of water a day was needed. Rancher John Turner had been supplying some of the water but his well couldn't pump enough water fast enough for the operation and he had to cap sales in order to meet the needs of nearby Deer Mountain Estates. Jobe Materials also could not supply water as needed.

If 84,000 gallons of water is correct, then, in the course of a year, each well being fracked just outside of El Paso will need almost 22 million gallons of water per year and that's just one well. (52 weeks X 5 business days per week X 84,000) Remember that Torchlight could eventually have 2500 wells. That's 55 billion gallons of water each year! And that is the amount of water necessary just for test drilling not for the actual extraction of gas and oil by fracking.

There would be no record of EPWU selling to Torchlight because Torchlight is getting its water from intermediaries - the water haulers. For a city that needs to protect its scarce resource of water, 22 million gallons of water per year per one fracking well is just too much not to mention 55 billion gallons per year if all 2500 test wells are drilled. 

Do not expect Torchlight Energy Resources to go away. According to a recent Market Wired report, Torchlight has maximized its liquidity and limited its exposure to debt. This capital structure has insulated them from the recent price fluctuations in oil and gas. In addition, they have a farm-in agreement with Founders Oil and Gas regarding their fracking in Hudspeth known as the Orogrande Project. "Torchlight will receive payment of $500,000 per well for each of the next 8 wells and through the Farm In agreement the Orogrande project is fully capitalized for development over the next two years."

Expect Torchlight to drill 8 more test wells in 2016.

Shouldn't the PSB consider capping how much water the water hauling intermediaries can purchase over a period of time?

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