The study revealed that there are only three water districts in Kern County that support produced water programs. In the current model, the oil and gas companies (the larger established ones) treat the produced water generated at the site and sell it to their respective water district. The district facility blends the produced water with fresh water and puts the blend into the canal from where the farmers tap their requirements. The usage of produced water depends on drought conditions. E.g., in a wet year like 2017, there was little requirement for the farmers to use OPW as freshwater was readily and cheaply available. This ecosystem for using produced water to use in irrigation exists only on the east side of Kern County, where the quality of produced water is good, to begin with, regards to the salt content such that its treatment at the oil site is not prohibitive. In contrast, the produced water quality on the West side of Kern is not good.
6.1 Barriers to widespread adoption of OPW
To develop a circular framework involving wastewater use in practice, a full range of opportunities, drivers, and barriers can be identified. The following sections discuss and barriers to the successful implementation of oilfield water reuse and the possibilities for extending these techniques towards a circular economy.
6.1.1 Economic, Financial and Legal Drivers and Barriers
Kirchherr et al. (2018) highlight how technological feasibility can be a driver and prerequisite for transitioning the circular economy. Nevertheless, other factors, including economic and regulatory barriers, hampering circular economy transition. Economic barriers include long-term economic viability and short-term financial barriers (Ormazabal et al. 2018; Ranta et al. 2018). Upfront investment costs and capital-intensive infrastructure can deter potential first movers in wastewater use, especially when freshwater sources are cheaper than reusing wastewater. Therefore, in addition to financial viability, a successful transition towards the circular use of water needs to consider the long-term economic feasibility of deploying circular economy practices (Ruiz-Rosa, 2020).
Political and regulatory feasibility involving wastewater use can act as drivers and barriers to hampering circular water use. Small firms can be incentivized to enact circular activities in response to a favorable legal requirement (Ormazabal et al. 2018). In addition, well-designed regulations can be used as drivers to address environmental and social challenges that could arise from promoting wastewater reuse. However, the lack of supportive policy framework, over regulations, and poorly developed legal frameworks can impede the uptake of wastewater use Ranta et al. 2018).
6.1.2 Existing and Future Technologies
The main concerns that emerged across the stakeholder groups are: capital-intensive infrastructure (treatment plants, pipelines, storage etc.) required to treat especially desalinate produced water and then to distribute it, handling of the brine and wastes generated, high variations in produced water quality that demands differing technologies to be reasonably cost-effective, moratorium against oil drilling in Kern County such as to render produced water insignificant as an alternative water source (given that the available produced water could meet around 5% only of the farmers’ total water needs).
One manager of a prominent O&G company opined that one way to commoditize produced water is to have an aggregator to create scale for all oil companies to participate and ensure a large volume of produced water at a certain specification using a suitable technology. From this common source, put infrastructure in place to convey and distribute the treated waters. Another way is to install technology that is flexible which can handle smaller amounts of produced water as well as fluctuation of produced water quality. This could be done by selling the new technology to individual facilities. The new technology under development promises low maintenance costs which seem to be a favorable value proposition to few water professional interviewees. But, again the distribution from this point onwards needs to be figured out. Irrespective of the business model adopted, both the treatment especially desalination (effluent management) and distribution costs are exorbitantly high. Without public funding, it may not be feasible for oil companies to bear the costs and scale.
These limitations are associated with technology and infrastructure that involves questions pertaining to scalability of such a massive public-private venture, and safe disposal of the waste (mostly brine) generated.
6.1.3 Public Perception and Psychological barriers
Figure 3 highlighted four psychological barriers including, fear, disgust, safety concerns, trust about the use of produced water that is directly or indirectly consumed. The interviews revealed that there are surprisingly few psychological barriers to using produced water among the famers and regulators. Their main concern is the availability of suitably treated produced water that they could buy from the oil and gas companies at a reasonable cost. In contrast, the same is not true for the general public and other stakeholders who harbor an overall mistrust of the oil and gas companies. People increasingly see these oil and gas businesses as pursuing profits at the cost of social and environmental well-being (see Fig. 3). Few respondents opined that there needs to be greater trust and transparency amongst the various stakeholders such that the well-being of consumers, agricultural field workers, communities living in close proximity to oil production facilities, and the environment are all taken into consideration.
A respondent who is into certification of organic farming and one from an environmental group felt that the health risk is not limited to the end consumer who eats the produce grown with produced water. The risks are greater for the field/farm workers and communities living in close proximity to wherever the produced water is handled, stored, treated or transported. For instance, the agricultural field workers might potentially be exposed through dermal contact and/or inhalation of volatile compounds present in the OPW that can pose both short- and long-term health risk depending on the exposure to known and unknown contaminants present in produced water. One of the experts also commented:
"the pre-treatment of the produced water has to be adequate. Merely mixing one part of produced water to three parts of freshwater (as is currently being done in some water districts of California) is not sufficient."
This expert said that during the drought years from 2011 to 2016, there were rumors that this ratio was not maintained owing to lack of fresh water supply. In addition, the participant felt that the pre-treatment, especially of hydrocarbons by running the wastewater over crushed walnut shells to skim it off, is probably not sufficient.
Both the respondents also reminded the potential risk to the environment centered around produced water. On one hand, augmentation of fresh water sources by alternative sources such as produced water looks desirable while on the other, they felt that the flow of produced waters should be seen as declining as oil drilling in the state slows down and the state eventually get out of oil and gas production. They opined that given the extreme climate changes and the risks posed by fossil fuel production to the safety of the environment, the future of long-term benefits of using produced water seems bleak and may not deserve much attention.
With regards to the end consumer, the interviews revealed that the general public’s psychological barrier might be the biggest hurdle to widespread adoption of PW for farming. Few interviewees commented on the attention span of people today: one of the water district managers who use produced water mentions that the attention span of the general public has reduced to a three- or five-second sound bites. While referring to oilfield produced water, if they hear the environmental groups lobbying against “toxic frack water,” they stop listening further and form an opinion or judgement. Another water district manager, who uses produced water and is a big believer of the PW as an alternate water resource, mentioned the news made by one of the prominent oil companies in LA Times (2015) when the said oil company started treating their produced waters and selling the treated produced water to farmers. There was a huge backlash and generated questions about food safety and risk for the produce that was irrigated and grown using produced water.
Several participants felt that consumers are generally unaware about how the foods that they consume were grown, especially those imported from other countries. Their attention is caught only when there is news on the media or when environmentalist groups voice out safety and risk concerns about using reclaimed waters for food production. The respondents opined that as long as water requirements meet the standards for crop irrigation, there is not a need to announce the source of water. However, transparency needs to be maintained among the various stakeholder groups in the produced water about monitoring plans, test results, blending procedures during drought and wet years and so forth and readiness to make these public if required.
Another trait that was revealed is trust (or lack of) of the general consumer that seem to be broken by the oil companies: two interviewees commented that people normally do not trust the oil companies and they feel that they are a lot of secrecy, say, about the chemicals the oil companies use to handle and treat the produced water despite extensive testing for contaminants.
6.2 How could these barriers be overcome?
The following sections discuss this study's findings regarding ways to overcome potential barriers to the successful implementation of water reuse and the possibilities for extending these techniques towards a circular economy.
6.2.1 Psychological barriers
The main question that arises is how much do the public need to know about the water sources used to grow their foods? Is it required? If yes, is it through public awareness and education rather than through media and/or environmental groups? (Fig. 4) The main users of oilfield produced water, namely, food producers are adequately informed about the subject and can dictate the exact water requirements and specifications to their respective water districts. However, as already discussed, the same is not true for the common people or consumers. One of the Water District Manager said:
"The same is not true for the general public who tend to go by short sound bites. Further, the consumers (who consume the produce or products grown using produced water) need not know the source of water once the water has met the standard requirements of the Central Valley Water Quality Board. However, when there is a media report or an environmentalist group takes up the issue, the general public gets easily swayed by the negative publicity about consuming products grown using oilfield water".
Research and scientific studies conducted by the water districts, oil companies, and independent assessors in the last several years show no red flags when it comes to the safety risk of consuming food products grown using suitably treated produced water. For instance, the Cawelo water district has been providing blended water to ~ 150 farmers since 1995. The monitoring and testing standards are stringent to ensure that water meets the quality requirements for irrigating the specific crops. Despite all of these, the media, environmentalists, and the general public are not convinced about the safe use of oilfield produced water. The need is to prevent sensationalism by the media by creating a unified voice about produced water usage. Given the long-standing nature of Kern’s existing produced water programs, there needs to be tighter integration and collaboration among the water districts and other players: oil and gas producers, farmers, local community representatives, environmental group representatives, public health experts, and academics. This is already initiated by bringing together all stakeholders under the auspices of a food and safety risk panel, like the one organized by the Central Valley Regional Water Quality Control Board. The findings revealed that the various stakeholders are both recipients and co-creators of value in a joint value creation process that supports a business model for sustainability.
Further awareness could be created through, say, town hall meetings in farming communities in the Central Valley. On the consumer side, launch a transparency initiative and publish the testing results after the produced water has gone through the suitable treatment processes. An interviewee associated with organic farming certification commented that although there seems to be a collective agreement by the oil and gas producers, the ag industry, and the water board on the best practices on producing clean produced water, there still seems to be a shroud of mystery when it comes to getting straight forward and a unified message from these stakeholders about produced water and its suitability for farming and other beneficial uses. This has resulted in general distrust amongst individuals when it comes to the question of putting more amounts of treated produced water to beneficial uses. This closely ties in with the concern that after decades of research and monitoring on oilfield produced water, we still lack solid and standardized remedial protocols.
6.2.2 Shared Value in a Circular Economy
Companies in both the two major industries involved, namely, the oil and gas industry, and the agriculture industry must revisit their ‘shared value’ mission which is about solving societal problems in order to create economic value (Porter & Kramer, 2019. The diminished trust in business might lead to policies that are unfavorable to the business’s profitability and competitiveness, thereby, resulting in a vicious circle (Porter & Kramer, 2019). Few glaring examples are depletion of natural resources, water shortages, customers well-being, and so forth (Long, Blok & Coninx, 2019). The business has to act in a way that can take societal issues to a strategic level to create economic value, which underlies the concept of shared value popularized by Michael Porter, a world-renowned business strategist (Porter & Kramer, 2006, 2011). Many oil companies are already doing it and might require leaders and managers to acquire new skills and knowledge to engage in these activities in collaboration with profit/non-profit boundaries and a unified message to the general public, media, and environmentalists.
The concept of a circular economy business model needs to be accepted where the focus is on two important issues. One is the collection and treatment of the oilfield produced water for distribution to food producers; the other being recovering valuable resources such as critical materials and rare earths from the produced water. This would provide a new way of looking at the different stakeholders while minimizing the amount of virgin resources (freshwater) that are extracted or imported at high prices from abroad (rare earths and critical materials).
6.2.3 Economic Barriers-Costs Versus Benefits
As already discussed, the amount of produced water generated versus the farm irrigation requirement is minimal, about 5%. However, an entrepreneur in the energy sector emphasized that after crunching all the numbers, there remains a big difference between the costs of treating the water and what a farmer could afford to pay for the water.
In addition, the Westside would require massive capital investments and public-private partnerships if regular treatment and distribution of produced water is to see the light of the day. A topwater professional voiced the opinion in our seaway. He believes currently, water is affordable, and the percentage of available produced water compared to the water needs of the farmers is relatively small. Very few customers’ (e.g., farmers) willing to buy produced water for irrigating their crops unless the economics of water change or until we get to the point where water is consistent $1300/acre-foot. He further added, “There is still a lot of applicability for process plants and process facilities, and a lot of applications for high recovery technology in those types of operations, but we just didn't get to the point where we can have enough meaningful solutions to provide customers with the decision that gave the customers the willingness to buy it.”
Another participant in the ag fresh produce industry voiced the same opinions and questioned the value proposition for farmers in using treated produced water if it could not be provided at a reasonable cost. Within the Central Valley, there are still areas where fresh water is available for $27/ acre foot of water, while in other regions the cost varies between $60–200 / acre foot of water. However, with the existing treatment technology for produced water, the costs are anywhere between $900–1200/acre foot of water in addition the other hassles of dealing with reclaimed waters. The participant opined that unless the cost and dynamics of water availability changes drastically, food producers would be unwilling to use treated produced water for irrigating their crops.
The opinions of both the above participants reveal that produced water treatment to make the water suitable for irrigation purposes is very expensive, and there needs to be supplementary beneficial uses (such as extraction of critical materials and rare earths form the OPW so as to make the final recycled product mor cost-effective to the farmers.
As Fig. 5 shows, capital costs primarily include the cost of infrastructure needed that currently does not exist, such as pipelines and treatment plants, that would need to exist for commoditization of produced water for irrigation and /or municipal purposes across Kern County. A manager working in a prominent oil and gas company commented on the infrastructure as:
"Using produced water for irrigation is not always a simple thing of, hey, I have this extra water. You want to put it in your pistachio trees. The infrastructure piece behind it is massive. I mean, the water flows through an eight-mile 42-inch diameter pipeline, reaches to fairly large retention basins that is then sent into an extensive canal system to get to the end crop users."
An expert in oil and water separation echoed the above by saying that for treating, say, 5000 barrels/day of OPW, the cost could range between $1 Million to $5 Million.
Benefits of using produced water for irrigation does have a positive impact on the environment as a supplement to freshwater sources, and to charge the ground water through irrigation of the agricultural fields. As one participant puts this together as:
"Kern County is a significant breadbasket of agricultural productivity and the other alternatives of bringing water into the region are substantially more expensive and provide no significant benefit. I would focus on the low hanging fruit and technology that is readily available to do every form of contaminant removal.
A reasonably priced technology could certainly be a business opportunity to water professionals who could collaborate with the oil & gas (O&G) companies and the Water Districts to treat and distribute produced water to farmers. One caveat is that the treatment costs depend on the location and subsequent quality of the produced water. For example, East Kern produces high quality produced water and 300,000-800,000 barrels of such high quality OPW could be easily treated very cheaply, say, for 5 cents a barrel. This would not be true, however, for West Kern where the quality of OPW is bad and larger R.O water treatment facilities would be required to make the economics work.
Another model suggested by an energy entrepreneur is to install pipelines to transport the poor quality OPW of West Kern to East Kern and use this in the oilfields for water flood and stea flood. Similarly, transport high quality produced water from the Eastern side and use it for beneficial reuse such as crop irrigation after minimal treatment. This model might be more cost-effective than trying to make potable water out of the high-saline OPW on the West side of the Valley. This would also mitigate another significant concern of treating and disposing off the wastes (mainly brine and/or oil and grease) generated. An O&G business owner who has treated produced water at site and is in favor of more extensive produced water programs said that already small– and medium-size enterprises in the oil sector are already incurring high utility costs to handle the produced water. However, as this respondent and several others pointed out, the major cost to any new technology would be the brine management.