Despite a precipitous decline in hydraulic fracturing activity following the dramatic decline in global oil prices, the market for frac water management is still estimated to be worth $1.9 billion, not including water transportation and disposal, according to Lux Research in its July 7 report titled “Surviving the Shakeout in Frac Water Treatment Technologies.”
Even though a dramatic decline in global oil prices has led to a fall in hydraulic fracturing activity, water reuse in areas like the Marcellus shale play is still in demand, says Lux Research.
While hydraulic fracturing operations have fallen from about 2,300 in October 2014 to 1,350 in February 2015, the water treatment market remains strong for companies that know how to play the opportunity. As oil and gas companies cut spending, operators are tapping new technologies to tighten up water management strategies and to lower costs. In addition, new regulatory momentum in the US could usher in stricter oversight of water transportation and disposal and facilitate more extensive water recycling.
“No single technology or water management approach will win in the frac water treatment space,” said Brent Giles, Lux Research director and one of the authors of the report. “Rather, companies will employ a mixture of water disposal, centralized treatment, and onsite treatment, using physical, thermal, and electrochemical methods. Companies, like Saltworks Technologies, have found ways to incrementally improve established technologies to address pain points in a given geography – while new players, like BitPetroClean, see an opportunity in niche markets.”
Lux Research analysts evaluated water management opportunities in the changed landscape for hydraulic fracturing, and rated 19 water treatment companies on the Lux Innovation Grid. Among their findings:
- Saltworks and Memsys lead in thermal treatment. Saltworks and Memsys placed in the “dominant” quadrant on the Lux Innovation Grid. Both are exploring combined thermal and membrane systems to alleviate corrosion issues caused by high temperatures and treat wastewater.
- WaterTectonics, which gained notoriety through an exclusive partnership with Halliburton, is the sole “dominant” company among electrocoagulation providers. The company is actively exploring related markets, such as offshore water treatment.
- In the absence of a “dominant” player, BioPetroClean is the highest-rated company among oil recovery and removal companies. Rated “high potential,” BioPetroClean focuses on degrading the last traces of oil that are not currently economical to recover.
The report is part of Lux Research’s Water Intelligence service and its Exploration and Production Intelligence service.