WSJ: Water Shortages Will Cut Energy Options November 8, 2013

As I’ve posted here many times, there are some real hard limits approaching for the business as usual approach to energy production. Water is one of them – conventional sources of energy, like coal and nuclear electricity – depend on access to large volumes of water.

Much hyped new technologies of fracking for natural gas and shale oil also assume massive quantities of water are available – even though the areas where these resources lie are often water-poor.

That’s why I’ll say it again. Just because the Exxon or the EIA projects something is going to happen, don’t automatically assume it is so. The next 20 years will not look like that last 20.

Wall Street Journal:

Water shortages are threatening energy output and increasing costs in some of the world’s most prolific sectors including shale gas in the U.S., crude oil in the Middle East and coal in China, and the situation is set to worsen, Wood Mackenzie said Thursday. The energy sector is already the world’s largest consumer of water for industrial purposes, using over 15% of global supply, and this is rising, the consulting firm said in a report, noting huge quantities are needed to increase pressure at oil fields, in technologies like hydraulic fracturing and to upgrade coal quality. Growing water needs will pit energy companies against other users, and increase production costs significantly, it said. Water is already a major cost factor for companies involved in shale developments in the U.S., including Antero Resources Inc., AR -1.47% an energy company backed by New York private-equity firms, which in August said it planned to spend more than half a billion dollars building an 80-mile pipeline from the Ohio River to fracking sites in West Virginia and Ohio. More than half of shale- and tight-gas areas in the U.S. and the top-10 other countries by shale reserve volume “are located in medium to extremely high baseline water stress areas where competition is high with other local water users and concerns over water quality exist,” Wood Mackenzie said. Shale gas is natural gas produced by injecting large quantities of water and chemicals into shale rock formations.

The article goes on to note that water scarcity is already preventing some of the biggest oil field sin Iraq from producing hundreds of thousands of barrels a day, and 70 percent of China’s coal production is located in areas of water stress.