TULSA, Okla. – Although Oklahomans this weekend endured a wintry mix of snow and ice that closed schools and shut down roads Monday, there is, in fact, a drought in the Sooner State. The drought, which also covers much of the U.S. and is projected to be the worst in almost 500 years, coincides with the oil and gas industry’s growing demand for water, which is used in hydraulic fracturing.

“There are certain areas for sure where we’re really starting to compete against the municipalities and agriculture” for water, Rob Johnston, executive vice president, Central Region at Apache Corp., said. Johnston spoke about problems the industry is currently experiencing regarding water use and recycling in the fracing process at Hart Energy’s DUG Midcontinent conference on Monday.

“Thousands of producers across this country have done such a great job of fracing and increasing our production that we’re really starting to stress our system,” he said.

Horizontal wells typically use about seven times as much water as conventional vertical wells. And while that water only represents a fraction of water use in the United States, Johnston noted that frac water, unlike water in wind turbines, crop irrigation, lawn upkeep and even leaky pipes won’t find its way back into the ecosystem.

“The easiest thing we can do is float it in frac tanks, truck it away, and deep-dispose of it,” he said. “There was a time when we were fracing vertically and you’d have a frac pond and the majority of it would evaporate. There’s way too much water now to do that with. All we end up doing is deep-disposing it, and now we wind up lubricating faults and having potential earthquakes here and there. It’s a big issue.”

Apache has had some success using brackish water (instead of fresh water) in the Permian Basin, where 95% of water used in fracing is recycled.

“We find that using produced water is no worse, and in many cases better than using fresh water,” he said.

But in Oklahoma, where brackish water is less abundant, it isn’t as easy. The company has opened a 10 million gallon recycling operation just across the border in Wheeler County, Texas. Even though the company has “almost” the economy to scale and access to produce water, it costs $2 more per barrel to use produced water than to use fresh water.

Johnston did say that the company has entered discussions with service companies to figure out a way to “team up” in the area, through a joint venture, a co-op or a utility, to make produced-water operations in Oklahoma economic. He also suggested using gelled propane fracs, but those have limitations, notably cost and size. The company has also re-evaluated its fracs over the past year, resulting in a 27% reduction in water use.

“We never contemplated we’d be knocking wells off half a mile away,” he said. “But we are, so we’re trying to fatten up our fracs.”

The regulatory environment for access to water rights could potentially stretch as far up the chain as the Environmental Protection Agency. Johnston suggested “hammering out” a compromise with the EPA similar to the way the industry dealt with state fish and wildlife departments to find a solution to the problems of the prairie chicken and dune lizard. He also said he’d like to see a tax incentive for using recycled water in stressed areas.

“It’s a different business that we have now,” he said. “It’s essentially a manufacturing business and the company that can keep its costs down is the company that’s going to flourish.”