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Water Scarcity & Drought are Consuming the Western U.S. – Your Produced Water Can Offer A Lifeline While Improving Your ESG Performance


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“Much of the U.S. West is facing the driest spring in seven years, setting up a climate disaster that could strangle agriculture, fuel deadly wildfires, and even hurt power production. […] Western cities will face tighter water-use restrictions, rekindling political battles over increasingly scarce resources.”

It is no secret that California and the word drought have become synonymous. With water scarcity plaguing the state for the last decade, conservation and subsequently Environmental, Social, and Corporate Governance (ESG), is becoming more critical across all industries. In September of 2020, the California pension funds and policymakers released a road map for integrating climate change risk and other ESG considerations into investment decisions. This roadmap was comprised of 40 recommendations broken out into seven categories to motivate investors and business owners to make a concerted effort to incorporate ESG goals into all practices.

Climate change projections for the southwest region from Texas to California present a stark water picture. The energy sector in these regions has the vast potential to be an essential contributor to promoting a circular economy and participate in cross-industry collaboration for the beneficial reuse of water.

Water Scarcity & Drought are Consuming the Western U.S. – Your Produced Water Can Offer A Lifeline While Improving Your ESG Performance

Where to start?

With the mounting pressure to develop ESG practices and the ongoing introduction of new ESG indexes, standards, frameworks, and funds, knowing where to start along the ESG journey can feel overwhelming. Integrated Sustainability can help you navigate through the uncertainty.

In the fall of 2020, the team at Integrated Sustainability began working with a prominent oil and gas producer in California to capitalize on the untapped value of their oilfield produced water. The client emphasized the importance of finding solutions that would maintain alignment with the standards and regulations set forth in the Sustainable Groundwater Management Act (SMGA) – an Act that has been motivating operators across California to dive into innovative and creative solutions surrounding their water use. By evaluating new and progressive ways of approaching water management along their supply chain, operators can uncover opportunities that improve their ESG performance and inadvertently that of multiple sectors simultaneously. Synergies between industries are becoming common, creating shared value for all parties involved.

Working closely with the client, Integrated Sustainability developed a solution that had tremendous operational value, essentially turning a liability into an asset, and provided multiple options to improve the operator’s overall ESG performance.

Environmental Benefits

  • Treated produced water can be returned to the environment or put to beneficial reuse in several industries, including agriculture, eliminating the need for additional freshwater use. With Integrated Sustainability’s support, the client gained a deeper understanding of the potential off-takers in the area and the beneficial reuse value of their produced water.
  • The client owns a sizeable area of undeveloped land. Integrated Sustainability recommended using this land for renewable energy generation, thereby creating a clean power source, maximizing the value of their land, and offsetting the greenhouse gas (GHG) emissions from their oil and gas production.

Social Benefits

  • Drought has devastating cascading effects and directly impacts agriculture, which could lead to depressed economies in farming communities as well as increased food costs and food shortages for society overall. By treating their produced water for agriculture beneficial reuse, the client can create strong and lasting relationships in the community and provide an alternative water source to farmers dealing with water scarcity during drought conditions.
  • Under SGMA, all counties in California are working to decrease their water use. By providing treated water to other users within the community, the client will benefit the end-user and be positively contributing to the goals of the entire county.

Corporate Governance

  • By treating its produced water, the client is provided with a breadth of valuable alternative options for their wastewater, which gives them the ability to:
    • Achieve operational efficiency through internal reuse or resale to the community.
    • Mitigate financial and regulatory risk by minimizing the dependency on costly and regulatory constrained disposal wells and create a new revenue stream through water resale and partnership agreements.
  • Decreasing or eliminating the need for disposal wells onsite reduces the client’s risk of running out of disposal capacity for their operations, creating more operational security.

Solutions to water scarcity in the western U.S. require an economy-wide approach, and the energy sector can be a key player in reducing the negative impacts. A more holistic approach to the energy-water nexus from both sides of the coin simply makes cost-effective sense, and for drought-stricken areas, conserving every last drop has never been more critical.

Progress is impossible without change. Let us help you unlock the value of your produced water and contribute to sustainable industry practices.

Contact us today for more information.

Oksana Kielbasinski, B.Comm
Director, ESG, Sustainability & Risk
[email protected]
1 (403) 681-1221
IntegratedSustainability.ca



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