Water is a critical but contentious resource for the fracking industry, which is booming in the US and poised to take off globally. Despite vast media coverage on the topic, many issues remain poorly understood by policymakers, the business community and other stakeholders who stand to be affected by the industry's widening presence.

As countries in Africa, Asia, Europe and the Middle East explore whether their shale energy resources are commercially viable, water sourcing and pollution risks are – and will continue to be – deep concerns that could threaten not only the environment but also the industry's viability. In the world's top 10 countries with the largest shale oil and gas reserves, including China and South Africa, more than 60% of those reserves are located in regions with medium to extremely high competition for water resources, according to consultants Wood Mackenzie

While the physical, regulatory and economic drivers of water use vary widely from country to country, there are many lessons and insights that oil and gas companies, regulators and NGOs can learn from the US shale energy experience.

Two issues are particularly pertinent. One, use of limited water resources for the fracturing process (which entails injecting millions of gallons of freshwater, along with sand and chemicals, into each well) and, two, the potential risks for surface and groundwater contamination from surface accidents, spills and poor wastewater management. The relative importance of these issues varies considerably by location, depending on the sources and competing uses for water.

In the US, the speed and scale of development has left policymakers and the scientific community playing catch-up in terms of understanding and mitigating wide-ranging cumulative impacts from shale gas and oil development. Even as stronger state regulations take hold, water use impacts are a major concern, especially in fracking hot spots such as Texas and Colorado, states that are marked by aridness, droughts and fast-growing populations competing for limited water.

In water scarce locations such as China, Algeria and South Africa, many of these same issues are in play. South Africa, in particular, is moving quickly to finalise regulations and issue licences to develop the Karoo Basin, a desert region with limited groundwater.

Policymakers in all of these countries should be asking these key questions of the industry. How much water will be needed? Where will it come from? How much can potentially be recycled? What alternative water sources are available? How will the industry's water use impact local hydrology and other competing water users?

Companies and regulators that cannot answer these questions up front may hit the same roadblocks that oil and gas companies are now facing in the US – tighter water use restrictions and, even worse, outright bans or moratoriums on hydraulic fracturing.

Recent work by Ceres on water risks in the US shale energy industry pinpoints many of the challenges and hurdles that regulators and stakeholders in other countries can learn from.

Disposal is one major issue. Fracking and subsequent oil and gas extraction produces a large volume of contaminated wastewater. In the US, most of the wastewater returning to the surface from wells is released into streams after treatment, injected into federally regulated disposal wells or recycled. The disposal wells, a legacy of the country's long history of dealing with wastewater from the coal, oil and gas industries, have been hugely popular because of their low cost. But this option may soon be facing tighter restrictions, due primarily to studies linking injection wells to earthquakes.

In the UK and Europe, the industry is likely to face more disposal challenges. The combination of existing EU directives (such as the groundwater directive) and the possibility of an "unconventional fuels directive" may well preclude low cost and speedy disposal of large quantities of oil and gas wastewater. Countries with a history of dealing with produced water from the oil and gas industry (such as Colombia or Brazil) may face fewer costs and challenges.

While much of the adverse publicity about fracking has focused on the risks of groundwater contamination, another challenge is the loss of groundwater resources. Worldwide, groundwater resources have been overexploited and often poorly measured and managed. Numerous studies showing that groundwater levels in many parts of the world are falling and that recharging those aquifers can take years, decades, even centuries.

Fracking could accelerate these pressures, as we're already seeing in the US. A recent Ceres report showed that 36% of fracking production in the US occurs in regions with significant declining groundwater levels after decades of over-exploitation – key among those southern California, which is in the midst of a historic drought, and Texas. Both states have weak groundwater laws, especially Texas.

Localised impacts are another concern. Despite the sense that shale energy production is a US-wide phenomenon, the actual extraction is highly localised. The Ceres report showed that fracking-related water use was highly concentrated in a just a small number of counties, sometimes exceeding the water used by all county residents. Any planning for fracking-related water use needs to recognise this. Decisions need to be made based on local considerations, not on state- or country-wide water use.

Ultimately, no matter the continent or country being scrutinised for fracturing production, regulators and shale producers should follow the same key fundamentals when it comes to the water impacts.

First, industry disclosure and engagement with local stakeholders on present and future water needs is critical, and it's encouraging that more of this is happening in the US. More proactive regional planning between industry players, co-operation to scale and increase regional recycling operations and using non-potable water resources are also hugely important.

Second, management makes a difference. Notwithstanding all the differences in site geology and hydrology, it is essential that water stewardship be imbedded throughout planning, production and across the supply chain. This is especially important given the industry's diffuse nature and reliance on subcontracted site operators.

As the new kid on the block in many parts of the world, shale energy developers and regulators that steward local water resources need to tread carefully as the industry expands its global presence. After all, no matter the location, water is a precious and finite commodity for everyone.

Monika Freyman is a senior manager in Ceres' water program and author of a new report, Hydraulic Fracturing and Water Stress: Water Demand by the Numbers. David Hampton is the managing partner of Irbaris, a specialist strategy and sustainability consulting firm and co-author of the Ceres Aqua Gauge.

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