In California, Big Oil Finds Water Is Its Most Prized Commodity



In central California’s San Joaquin Valley, Chevron piped almost 8 billion gallons of treated wastewater to almond and pistachio farmers last year. California Resources Corp., the state’s biggest oil producer, plans to quadruple the water it sells to growers, Chief Executive Officer Todd Stevens told investors at an April conference.

An environmental group, Water Defense, questioned whether Chevron’s sales to farmers created the risk of industrial chemicals contaminating the food chain. The local water-quality control board ordered the company to conduct tests and Chevron says it has met all the pollution standards in its permit.

Water Flow

One of the industry’s biggest headaches is what to do with the torrents of naturally occurring “produced water” that come out of wells along with oil and gas. Members of the Western States Petroleum Association, a group of major drillers including Chevron and CRC, will unearth more than 92 billion gallons of wastewater this year, based on a May survey by the association.

The water’s typically too salty to be potable, although in parts of the state it can be treated enough for use by farmers. The vast majority of the waste is either reused for drilling or injected into disposal wells.

That may change thanks to businesses such as OriginClear Inc., a Los Angeles-based licensor of technology that purifies wastewater by zapping it with electric pulses. OriginClear has run pilot projects for both CRC and natural-gas producer Aera Energy LLC, William Charneski, OriginClear’s senior vice president, said in a Dallas interview.

Other companies are using technologies developed to treat petroleum-contaminated land to better cleanse their wastewater, said Barnes, the Bloomberg Intelligence analyst.

More Recycling

If California eventually mandates re-use of water at the well, it could energize recycling across the oil industry with other state legislatures following suit, said Chris Robart, a managing director at market-research company IHS Inc. of Englewood, Colorado.


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