INCLINE VILLAGE, Nev. -- Oklahoma's top energy and environment official is hoping to turn two of the state's biggest problems into one big solution.
The first challenge: the massive increase in earthquakes trembling the state, a phenomenon caused in large part by the oil and gas industry's disposal of wastewater into deep injection wells near critically stressed fault lines.
The state had about 20 earthquakes of 3.0 or greater in 2009, according to Oklahoma Geological Survey records. Just in the first six months of this year, the state has already had 470 quakes of that magnitude.
The second problem: water stress. Oklahoma was in the throes of a five-year drought until slow-moving storms dumped historic amounts of rain this spring. Although the state is now grappling with the opposite problem -- flooding -- Oklahoma Energy and Environment Secretary Michael Teague said he believes the drought will be back again next year.
But together the two problems could produce a solution, Teague argued to participants in the Western Governors' Association Drought Forum here last week.
To deal with what he called "a huge seismicity problem," Teague said the state has only a couple of options.
"You can either just stop injecting [the wastewater] -- and that's a huge piece of our economy -- or we're bringing this water to the surface. Do we have an opportunity here?" he said. "We think we do."
Teague said the state is just starting to look into what it would take to treat the produced water -- water that comes up with the oil, which has been locked underground in shale formations for thousands of years and is laced with brines and hundreds of toxic chemicals -- to make it safe enough to put to other uses.
Technologically, Teague said, he is optimistic.
GE's oil and gas technology center is based in Oklahoma City and is working on the issue.
"We have ongoing research programs to explore both ways to reduce the use of water in oil and gas production and to develop new treatment solutions for produced water for industrial reuse or other safe ways," said Todd Alhart, spokesman for GE Global Research. "These discussions and research activities are in the early stages but could represent more beneficial ways to deal with and make use of our water resources in the future."
The bigger challenge, experts argue, is the economics.
Kim Hatfield, regulatory chairman of the Oklahoma Independent Petroleum Association, says there are ways that the water that returns to the surface after hydraulically fracturing the well -- called flowback -- can be reused with some treatment.
But nearly all the water getting injected in Oklahoma's earthquake-prone areas is produced water, which is extremely salty -- sometimes five or six times more so than seawater.
Hatfield said drillers don't see treating it for any kind of reuse as feasible.
"We just flat out don't have the technology to do that economically," he said.
To that argument, Teague has this quip:
"Yeah, right up until you cause earthquakes and you get told you can't do that anymore, and then how economical is it going to be?"
Moreover, he argues that his plan could help solve the oil and gas industry's optics problem during times of painful drought.
Although the industry accounts for only about 2 percent of the state's water use, Teague said that it takes a beating in the public eye when communities and farmers watch the industry pumping water while they fear running dry.
Treating produced water enough to be able to offer it up for other uses, Teague argues, could deliver the industry a public relations win.
In Oklahoma, water stored so deeply underground is not owned by anyone, something that could make it more appealing to users scrambling for supplies during drought.
Teague said he sees opportunities for putting the water to use for agricultural irrigation and power plant cooling systems -- two uses that make up much larger shares of the state's water use, and might not require as thorough a treatment.
"You're the goat of the earthquake story; you guys could be the hero of the drought one," he tells industry.
Regulatory uncertainty around produced water
While Oklahoma is just beginning to bat around ideas for putting its produced water to beneficial use, some states already have programs underway.
New Mexico uses treated oil and gas wastewater to fight fires, Teague said.
And in California, Chevron has sent treated wastewater to Central Valley farm fields for two decades.
But that program has recently raised concerns among environmentalists and state lawmakers, who say the chemicals in the wastewater could be toxic for humans and who want stricter regulation.
Detangling just the federal laws that could apply to such programs is no small feat, and even experts say they don't fully grasp them.
Teague said that regulatory hurdles are one of his big focuses in the program, and that he is working with EPA regional officials on the issue.
The Clean Water Act considers water produced by the oil and gas industry to be a hazardous material and prohibits its discharge into waters covered by the law.
But there are two big exceptions to that prohibition. One, the law prevents only direct discharges, not indirect discharges, like ones from a treatment plant that has received produced water.
Secondly, in the West, it is possible to get a permit to discharge produced water directly if the water has been treated to a "good enough" standard for wildlife or agricultural uses. In many cases, the decision about what is "good enough" has been delegated by U.S. EPA to the states to make.
Regulators have limited scientific information to make that decision in the first place, though.
According to information self-reported by industry, there are hundreds of chemicals that can be present in wastewater. But EPA has drinking water standards for only 94 chemicals and standard test methods for only a few dozen more. For many of the chemicals that industry lists on its FracFocus database, there are no scientifically agreed-upon toxicity limits or even methods for testing.
Teague said that other laws, like the Resource Conservation and Recovery Act, which governs the disposal of hazardous waste, could also apply.
All these uncertainties also raise the concern among oil and gas companies that they could get sued someday if the water they provided from their production were to cause problems.
To be sure, Teague acknowledges that his program is just in its beginnings and doesn't promise any real solutions anytime soon.
"This is not a short-term solution," he said. "I think we're talking years."
But his efforts have intrigued a number of people, including some environmentalists.
"For a variety of reasons, there is increasing interest in treating produced water from oil and gas wells in order to use it for beneficial purposes," said Scott Anderson, a senior policy director for Environmental Defense Fund.
"The impulse is a good one, and the Oklahoma project is a creative effort that we applaud, but the devil's in the details," he said. "It's important to pay attention to the risks posed by produced water in order to make sure that the solution isn't worse than the problems that it's trying to solve."