The state of Texas could face a 2.7 trillion gallon water shortfall by 2060, according to a recent report by Texas A&M University’s Bush School of Government and Public Service.

To address this potential shortfall, the state should offer tax incentives to oil and gas companies to substitute brackish groundwater for fresh water, according to the report “Water Use for Hydraulic Fracturing: A Texas Sized Problem?” The report research was compiled by students with the Mosbacher Institute for Trade, Economics and Public Policy, which is part of The Bush School.

The use of hydraulic fracturing in shale exploration in the United States has allowed the nation to become the world’s largest producer of oil and gas. However, the process has been heavily scrutinized due to the amount of water used for production, especially in Texas, which has large demands placed on its limited water supply. According to the report, hydraulically fractured wells typically need approximately 5 million gallons of water per well.

“Unfortunately, no one but the companies themselves has good information about which companies do and do not use brackish water,” Dr. Lori Taylor, director of the Mosbacher Institute, told Rigzone in an email statement.

As a result, the students recommended that reporting of all water uses be mandatory. Press reports do indicate that Apache Corp. is no longer using fresh water in its Wolfcamp field, and that Pioneer Natural Resources uses wastewater from Odessa, Texas in at least some of its drilling operations, Taylor noted.

In Texas, hydraulic fracturing and horizontal drilling have resulted in exponential production growth from the Eagle Ford shale play. Thanks to these technologies, over 200 operators have been able to tap previously inaccessible shale resources and produce abundant amounts of oil and gas. This surge in production has been so great that, in November, the Eagle Ford produced its 1 billionth barrel of oil.

However, the growth in hydraulic fracturing and state population growth from 2000 to 2010 has exacerbated existing pressures on the state’s water supply. This population growth rate – which occurred at a rate faster than any other U.S. state – is expected to continue “with no end in sight”. By 2060, the state’s population is expected to reach 25.1 million residents in 2000 to 46.3 million, or 82 percent.