“We are at about 15% capacity, and we have about a year left in our lake,” says Lance Howardson.
He’s the City Manager for Mineral Wells in Gordon, Texas, and he’s talking about Lake Palo Pinto just west of Dallas.
Other than a brief rainy spell in 2012, Texas has been in a state of severe drought since October 2010. Most of its stores of water are either dry or running low.
Many towns, like Gordon, have been drawing from lakes and treating the water at plants in town. But after four years of drought, there isn’t much left there, either.
Most of the Southwest feels the brunt of severe heat, and Texas has been guzzling water at an astounding rate in order to fracture oil and gas wells in the Barnett, Permian, and Eagle Ford.
The typical tight oil well can consume about 4.4 million gallons of water. That’s enough to fill six Olympic-sized swimming pools.
It’s also enough to satisfy 11,000 families a day.
And as water in states from Texas to California dries up, the competition between drillers and residents for the resource is at an all-time high.
But there is a new technology currently in development that could change all of this…
End Bans, Save Water, Make Money
The fact that hydraulic fracturing consumes vast amounts of water is nothing new…
For years, environmental activists from the Food and Water Watch, the Sierra Club, and NextGen Climate Action have been rallying against hydraulic fracturing and its water-intensive process.
As such, water use is one of the many reasons that there are over 435 pending ballot measures across the U.S. that could spell doom for hydraulic fracturing.
Colorado, home of the Niobrara Shale, has been on the front lines of this battleground for years…
The state’s mix of economically driven citizens in rural areas and environmentally active young folks in urban centers has created a tight political contest over the controversial process.
Five bans remain in place in key areas of the Niobrara.
Meanwhile, the production method I mentioned earlier is being studied nearby in Golden, Colorado.
The new process could change the way we harvest oil and gas for the next decade… not to mention give your portfolio a hefty boost.
Cryogenic Fracturing
In Golden, at the Colorado School of Mines, researchers have been testing a new way to open oil and gas deposits tightly locked in shale rock without using a single gallon of water.
Industry insiders have taken to calling it cryogenic fracturing, and it works like this…
Liquid nitrogen or carbon dioxide, at temperatures below negative 321 degrees Fahrenheit, is pumped underground at high pressure.
Once the freezing cold liquid hits the heated, pressurized rocks, the reaction causes the shale to crack open and the oil to gush out.
In theory, the below-freezing liquid should actually allow more oil and gas to flow from the rocks than water does currently.
You see, when water is injected into a well, it stays there and hogs space that would normally allow oil to flow.
But with cryogenic fracturing, the chemicals pumped underground open larger gashes in the rock and evaporate on contact with the shale, meaning the oil has more space to gush out.
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Ride the Atmosphere’s Most Abundant Element to Pay Dirt?
Just to recap, this technology has the ability to calm environmental concerns, increase oil and gas production, and end the pinch on water resources in Texas, Colorado, and California.
And as you know, any technology or new practice that can do these things will set drillers who use it apart from their competitors… not to mention send their share prices through the roof.
Unfortunately for us, the new technology isn’t quite ready yet. But tests are set to take place in Colorado in the coming months.
Critics are concerned that nitrogen’s low viscosity will make it harder to carry proppant and that the fluid, although abundant, can be costly to maintain in liquid form.
But if the tech proves effective, companies who supply the nitrogen and use the technology to drill will skyrocket…
There are rumors that Pioneer Natural Resources (NYSE: PXD) will be the first company to get a crack at the new technology. If it works, this could certainly help boost the stock.
Of course, only time will tell if this method is a pipe dream or the future of oil and gas extraction in the U.S.
Until next time,
Keith Kohl
Check us out on YouTube!A true insider in the technology and energy markets, Keith’s research has helped everyday investors capitalize from the rapid adoption of new technology trends and energy transitions. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital, as well as the investment director of Angel Publishing’s Energy Investor and Technology and Opportunity.
For nearly two decades, Keith has been providing in-depth coverage of the hottest investment trends before they go mainstream — from the shale oil and gas boom in the United States to the red-hot EV revolution currently underway. Keith and his readers have banked hundreds of winning trades on the 5G rollout and on key advancements in robotics and AI technology.
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