(John Kemp is a Reuters market analyst. The views expressed are his own)

By John Kemp

LONDON, Jan 16 (Reuters) - The biggest output of the U.S. oil and gas industry is not oil or gas but dirty water.

Every day, U.S. oil and gas producers bring to the surface 60 million barrels of waste water, with a salt content up to 20 times higher than sea water and laced with hazardous chemicals.

For the most part, they dispose of it safely, as required by federal and state laws.

Most of it is re-injected into oil and gas bearing formations to maintain pressure, or into disposal formations far below the freshwater aquifers.

Safe disposal of so much hazardous water should put into perspective some of the recent concerns about water management raised by opponents of hydraulic fracturing.

60 MILLION BARRELS

Environmentalists and policymakers have raised concerns about the massive amount of water used fracturing oil and gas wells, and the resulting strain on local water supplies, as well as the safe disposal of fracking fluids and briny salt water brought to the surface from fracked wells.

Risks to freshwater aquifers are often cited as a key reason to restrict fracking or subject it to strict new federal regulations.

But the challenges of disposing of waste water contaminated with hazardous chemicals are not unique to fracked wells, and there is already a comprehensive framework of federal and state rules governing safe disposal designed to protect drinking water supplies.

Environmentalists have zeroed in on the huge amount of water injected into oil and gas wells to fracture rock formations, and the exotic chemicals added to help carry the frack sand into the cracks, reduce corrosion and remove excess drilling mud.

Fracturing a multi-stage well can involve injecting millions of gallons of water under intense pressure, with 3-12 chemicals typically added to reduce friction and address site specific problems, according to the U.S. Department of Energy ("Modern Shale Gas Development in the United States," Apr 2009).

But the problem of disposing of fracking fluids pales beside the challenge of disposing of all the briny water produced alongside the oil and gas, from conventional wells as much as fracked ones.

The average oil well produces 7.6 barrels of water for every barrel of crude. The water/oil ratio can rise to as much as 24:1 or even 42:1 in states like Florida and Illinois. On average, 88 percent of the material brought to the surface from an oil well is water, rising to 98 percent for wells nearing the end of their productive lives.

For gas wells, 260 barrels of water are produced for every million cubic feet of natural gas.

In 2007, the daily output of the U.S. oil and gas industry was 4.8 million barrels of crude, 66 billion cubic feet of natural gas, and 58 million barrels of waste water, according to a study by the Argonne National Laboratory's Environmental Science Division ("Produced Water Volumes and Management Practices in the United States", Sep 2009).

"Produced water is the largest volume by-product or waste stream associated with oil and gas exploration and production," according to the Argonne study. "The cost of managing such a large volume of water is a key consideration to oil and gas producers."

150,000 DISPOSAL WELLS

Produced water occurs alongside oil and gas in the same underground formations and brought to the surface with them. The salt content of produced water can be 20 times higher than sea water, and it contains traces of the hydrocarbons that it was found alongside, including chemicals harmful to human health such as benzene.

Safe disposal of so much briny and contaminated water presents an enormous challenge and is already strictly regulated.

Of the 58 million barrels of waste water produced every day, roughly half (29 million barrels) is re-injected into oil and gas bearing formations to help maintain pressure and enhance ultimate oil recovery. Another 20 million barrels are injected into non-hydrocarbon formations for disposal.

Less than 2 million barrels per day are discharged on the surface, and almost all of those are in offshore fields. Only 380,000 barrels are discharged onshore.

Disposal through re-injection of into non-oil bearing formations is already subject to the Safe Drinking Water Act (SDWA) and other federal regulations.

The act prohibits injection which endangers an underground source of drinking water (USDW). The Environmental Protection Agency (EPA) has established minimum standards for Underground Injection Control (UIC). But states are free to establish and enforce their own standards provided they are certified as at least as stringent, and most have now done so.

In 2002, EPA estimated there were 147,000 wells licensed for the disposal of wastes associated with the production of oil and gas (so-called Class II waste disposal wells).

To prevent waste migrating into freshwater aquifers, EPA regulations require Class II disposal wells to be appropriately sited; cased and cemented, particularly in the sections crossing freshwater-bearing layers; and the wells must be periodically monitored to ensure the containment remains effective ("Protecting Drinking Water Through Underground Injection Control," Jan 2002).

None of this is meant to imply fracking does not pose challenges. However, the industry is already handling more than 60 million barrels per day of waste water contaminated with high-levels of salt and cancer-causing chemicals, most of that from wells that would be considered "conventional" rather than fracked.

The oil and gas industry's use of water to fracture wells needs to be carefully regulated to ensure it is not diverting freshwater from competing uses without proper compensation. And waste disposal must continue to be stringently regulated. But the water management problems posed by fracking are no different from those which have long been associated with conventional wells.

References: (1) "Produced Water Volumes and Management Practices in the United States" (2009): http://www.ead.anl.gov/pub/doc/ANL_EVS__R09_produced_water_volume_report_2437.pdf (2) "Modern Shale Gas Development in the United States" (2009): http://www.netl.doe.gov/technologies/oil-gas/publications/EPreports/Shale_Gas_Primer_2009.pdf

(3) "Protecting Drinking Water Through Underground Injection Control" (2002): http://www.gwpc.org/e-library/documents/general/Protecting%20Drinking%20Water%20Through%20Underground%20injection%20Control-%20Drinking%20Water%20Pocket%20Guide%202.pdf