Projects to reduce pollution in the Permian Basin are on the rise, as is demand for oil

As oil and gas markets continued to grow alongside operations in the Permian Basin earlier this year, efforts to mitigate the industry’s environmental impacts also increased.

The expansion of industry wastewater management and air pollution mitigation in the basin was expected to increase as production increased to meet increased demand during the global recovery from the coronavirus pandemic. COVID-19.

NGL Energy Partners announced a partnership with XRI Holdings to increase produced water management throughout the Western Delaware Basin, which covers New Mexico’s southeast portion of the Permian.

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The project would see a combination of NGL’s pipeline network of 1.8 million barrels per day capacity and XRI’s recycling capacity of approximately 1.2 million barrels per day at 30 recycling facilities around the Permian basin.

Produced water is a combination of flowback from hydraulic fracturing operations and formation water brought to the surface along with oil and natural gas. It is rich in brine and toxic chemicals and is either disposed of by underground injection or recycled and reused in subsequent drilling.

Recently, companies have started to prioritize water recycling and reuse as the traditional use of disposal wells was opposed for fear of environmental contamination and induced seismicity.

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Company officials said the joint venture between NGL and XRI would allow both companies to capitalize on increased demand for new water management and recycling practices.

“NGL remains true to its commitment to providing lifecycle water management to its customers while remaining focused on the environment and sustainability of our operations,” said Doug White, executive vice president of NGL. “We have created a set of capabilities unmatched in the industry.

“As a leader in produced water management, we believe this approach will be the best way for us to continue to provide safe, efficient, reliable and environmentally friendly solutions to our customers.”

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Companies in the region have also responded to the demand for better carbon capture operations by reducing the amount of air pollutants released from oil and gas operations.

Lucid Energy announced that it has received approval from the United States Environmental Protection Agency to sequester carbon dioxide (CO2) emissions at its Red Hills natural gas processing plant in Lea County.

The EPA has approved the Monitoring, Reporting, and Verification (MRV) plan submitted by Lucid as to how the company will remove CO2 by underground injection.

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The plan documented how Lucid will permanently capture and store CO2 that is removed from natural gas during processing, which aims to provide Lucid customers with more “sustainable” production, company officials said.

“Since entering the Delaware Basin five years ago, Lucid has targeted investments in large-scale gas processing assets, which enable our customers to develop highly cost-effective drilling sites with associated off-spec gas. “said Mike Latchem, CEO of Lucid.

“This strategy has proven to be beneficial for all stakeholders, as Lucid currently removes more CO2 from Permian Basin shale production than any other mid-tier operator.”

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Oil prices may continue to rise, but as production rises, so does supply, meaning energy prices could begin to fall and stabilize this year, read a recent report from energy industry analyst firm Enverus.

When COVID-19 hit the United States in March 2020, travel and business restrictions caused demand for fuel and petroleum to drop to historic lows, driving down production.

When COVID-19 vaccinations were lifted, demand picked up and quickly outstripped fuel supplies as companies struggled to restart production.

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The price of domestic oil Monday morning was around $93 a barrel, well above pre-pandemic levels in the low to mid $60s.

Meanwhile, Baker Hughes reported that the Permian Basin added seven rigs last week on Friday, while New Mexico held steady at 92 rigs and Texas added 13 for a total of 300 rigs. -forms.

Enverus predicted that U.S. oil and gas production could reach over 900,000 barrels per day in 2022, but then decline in 2023 to 300,000 barrels per day as demand is met.

This year, the supply is expected to increase, but will also depend on geopolitical events and extreme weather events, said Farzin Mou, vice president of Enverus.

“Growth in U.S. supply is expected to weigh on commodity prices through 2022, but the timing of that correction depends on oil geopolitics and natural gas weather,” Mou said. “The additional supply will allow for global stock building in the first half of the year.”

Adrian Hedden can be reached at 575-618-7631, or @AdrianHedden on Twitter.

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Felix J. Dixon