据估计，二叠纪盆地的采出水量超过2000万桶/天。这一产量巨大，七年内增长了一倍多，而且看不到尽头。

一场比喻性的采出水海啸会带来各种地震、外带、成本和监管方面的担忧。但也有潜在的解决方案，包括长距离管道、回收利用、关键矿物开采、农作物的有益再利用等等。

Aris Water Solutions已发展成为二叠纪盆地顶级的水资源解决方案提供商。公司总裁兼首席执行官 Amanda Brock 正在就日益严峻的水资源挑战发出警告，但她也确保解决方案是切实可行的，且成本可控。

布罗克与《石油和天然气投资者》特约编辑乔丹布鲁姆讨论了二叠纪水资源问题和答案。

Jordan Blum：从个人和职业角度来看，我很好奇是什么促使您进入能源行业的水务领域？您觉得在这个日益重要的业务领域担任领导怎么样？

阿曼达·布洛克：我猜我一直从事基础设施建设，但基础设施中的水资源元素一直被忽视。它毫无吸引力，甚至被认为是必要之恶或浪费。想想我们现在专注于减少浪费的程度，无论是由于气候影响，还是仅仅因为资源有限，你就会发现水资源短缺，人们开始更加关注水价不合理的问题。我认为这是一个非常具有挑战性但又令人兴奋的领域。

几年前，我受邀在阿布扎比国际天然气展览会（Gastech）担任创新演讲嘉宾，当时我觉得自己说了一句最棒的话：“如果没有石油和天然气，你才能创新。如果没有水，你就会灭亡。” 事实就是如此残酷。在当前的工业环境中，在水的定价、输送和再利用方面发挥重要作用，是一个绝佳的机会，可以带来改变。

JB：正如您所说，水资源正变得越来越重要，人们也越来越理解其中的挑战。但是，截至目前，尤其是在二叠纪盆地，您如何看待仍有多少水资源挑战被忽视？水资源是否是产量增长的最大障碍之一？

AB：有一个不争的事实——二叠纪盆地干旱，基本上就是一片沙漠。二叠纪的含水层没有补给，也没有大片地表水。然而，这个行业，尤其​​是随着水力压裂技术的出现，消耗了大量的水，但它也拥有产水量大的优势。采出的水，并非二叠纪盆地独有，而是所有盆地都有，被视为浪费。“谁来把它运走吧。我只想要安全的外卖。”

在二叠纪盆地，情况因几件事而加剧。首先，直到最近二叠纪盆地开始进入生产模式时，这里才有了基础设施。其次，在生产模式下，处理这种浪费变得更具挑战性。需要抽取和处理的水量非常大，而且需要大量的水才能继续运营。

对于像我们这样的人来说，我们会说：“我们将为您提供一个全面的解决方案，就是尽可能多地回收利用您的水，以便您在完井作业中真正利用行业产生的水。” 一开始，这正是我们想要做的。刚开始的时候，这仍然被视为一种浪费：“如果它不影响我的水力压裂化学反应，也不妨碍我的时间安排，那么我就使用我的水。”

再来说说我们目前的处境，运营商要求尽可能多地使用再生水，因为我们已经证明再生水是安全的。再生水可以按照他们所需的数量和质量输送到他们想要的地点。所以，我认为业内人士对水的重要性有了更深的认识，因为如果没有安全的外送水源，如果没有完井用水，就会影响自身的开采能力以及继续开采和利用矿产的能力。

JB：我知道情况每天都在变化，但生产商是否仍然不愿意为基础设施和再生水能力支付额外的费用？

AB：问题不在于再生水，因为如果你想想他们平时会用什么水，就会发现他们用的是咸水或淡水，而且根据他们所在位置，需要通过管道输送相当长的距离。所以，我们可以非常经济高效地为他们提供再生水。更大的问题是处理，处理这堵水墙所需的基础设施数量以及这些基础设施的成本正在增加。一开始是“请把我的废水处理掉”。到去年为止，这些废水现在大约是每天2100万桶。二叠纪盆地每天都有2100万桶的采出水需要排放，这是一个惊人的数字。到2030年，估计这个数字将达到每天3000万桶。用水强度正在增加。这些水要流向哪里？谁来把它们处理掉？谁对此负责？它不能被压缩。它不能像天然气一样燃烧。

所以，任何限制完井取水或重新输送水量的措施都在考虑之中。但你们是在LOE上竞争，对吧？每个人都想尽可能地降低成本，但越来越多的人意识到，尤其是在处理这堵水墙所带来的挑战下，费率必须上涨。归根结底，如果没有这些水利基础设施来支持他们的运营，他们的运营将受到严重的负面影响。

JB：您能否更详细地描述一下所需基础设施的规模以及 Aris 为填补这一空白制定的计划？

AB：从一开始，我们就始终致力于提供全面的水务解决方案。我们把水运走，再把水运回来。有些公司只负责运走，还有一些公司负责完井。我们相信，如果一个公司拥有一套能够将大量水运走的系统，那么它也能将水输送到需要的地方进行回收利用，并可以选择在其他时间将其返还给其他可能需要水的运营商。这样，你就能管理峰值，提高利用率，最终为像我们的客户这样的公司提供更全面的服务。我们最大的客户是雪佛龙和康菲石油公司——康菲石油公司恰好也是我们最大的股东。我们可以采用一种行之有效的方法，从而获得更广泛的应用。

我们目前的系统有超过800英里的管道。我们的回收能力为150万桶/天，处置能力为180万桶/天。这就是我们目前的水平。我刚才告诉过你，我们的处置能力是2100万桶/天。在我们的地理区域内，我们的处置能力还不错，但地理区域要大得多。一个名为B3 [Insight]的实体预测，未来处置能力将出现短缺。有远见的公司开始说：“如果我要实现我向股东提出的预测，就必须确保处理渠道并确保我有足够的水用于完工。”因此，需要进行更多的库存规划和基础设施规划，因为目前没有足够的基础设施来支持即将到来的水量增长。

JB：您能否描述一下米德兰与特拉华所面临的挑战以及它们之间的区别？

AB：一些差异体现在监管方面，例如特拉华州北部与新墨西哥州接壤，两州之间的监管环境差异相当显著。我认为，重要的是要认识到，新墨西哥州和特拉华州北部的土地所有权和水资源所有权是不同的。土地所有权由土地管理局（BLM）管辖，水权也由州政府管辖。水权是一种经过裁定的水权。因此，仅仅因为你的土地下有水，并不意味着你可以把它卖给石油和天然气公司。事实上，除非分配给工业用水，否则你不能卖给石油和天然气公司，而工业用水目前受到限制。

在德克萨斯州，你拥有土地，并且有“夺取”规则，这意味着在我拥有的土地之下，如果我有水，我可以任意取水并卖给你。土地所有者希望你，操作员先生，将别人的水引入他的土地的可能性很低，尤其是在他没有矿产权益的情况下。每个人都想最大化自己的资产，因此你建设大型系统的能力受到了阻碍，就像我们在特拉华州北部和新墨西哥州所做的那样。正如你所说，这是一个更古老的流域。它更加分散，不仅是因为土地所有权，还因为矿产所有权和创建系统的能力，这些系统有助于提高效率。

JB：显然，地震事件会对水的处理造成影响，您能否谈谈地震如何导致注入深度更浅，并带来更多挑战？您能否详细解释一下孔隙空间不足的原因？

AB：业界已采取行动应对地震活动。我们主要关注德克萨斯州。随着地震活动的增加和审查的加强，尤其是在米德兰市发生地震并引起人们震动时，德克萨斯州铁路委员会一直非常务实地与业界合作，制定由业界主导的解决方案。他们设法继续从矿产中获得特许权收益，这显然有助于德克萨斯州的教育和其他福利。在新墨西哥州，它支持着大规模的项目。因此，业界已转向更浅的注入方式。

他们也限制了某些地震活动频繁地区的活动。但是，通过与监管机构合作，更多地转向浅层作业，我们已经看到，我们一直关注的一些地区的地震强度和数量都得到了积极的影响。最重要的是，例如卡尔伯森（德克萨斯州县），如果你观察一下地震活动，就会发现随着作业公司转向浅井，地震活动有所减少。因此，深层注水似乎对这些地区的地震活动加剧做出了更大的贡献。

JB：但是也只能容纳这么多浅注入，对吗？

AB：确实有，尤其是在有这么多水的情况下。当然，你提到了孔隙空间这个词。大家都在关注孔隙空间是否足够。你关注的是地下地质情况，以及所有这些水都需要被储存在某个地方，以及这将产生什么样的长期影响和效果？监管机构也在关注这个问题。人们正在做的是提前规划。如果孔隙空间实际上变得更加受限，或者注入水会产生局部影响，你还能去哪里呢？

这对我们这样的人很有帮助。我们拥有完善的系统和广阔的地理覆盖范围，所以运营商乐意与我们这样的公司合作，因为我们可以将污水输送到大片区域。这对我们来说是一大利好。但从长远来看，人们正在考虑在产水区之外是否还有其他地方可以将污水输送到更远的地方。

这涉及到长距离输油管道的问题。人们在考虑长距离输油管道吗？答案是肯定的。他们正在购买土地；他们正在审批通行权。他们正在与大型油气公司和其他着眼长远的企业合作，以确保未来有合适的输油管道。

JB：您能举个例子说明一下现在水可以扩散到多远吗？

AB：当你拥有一个大型系统或长管道时，一旦水进入管道，就会混合。这是一个分配函数，但答案是，有些水会流经20英里或更远，而在长距离管道中，可能会流经50英里或更远。

JB：我能否进一步了解一下您希望在监管方面看到哪些变化？

阿特：我们希望监管具有确定性。我们希望监管能够跟上变革的步伐，我们希望监管机构务实且富有协作精神。在很多领域，监管机构确实做到了这一点，但此次水资源挑战如此严峻，监管机构担心其可能带来的长期影响和后果。当我们致力于诸如有益再利用之类的工作时，这是工具箱中的工具之一。如果你拥有所有这些可以处理的水，那么你是否也可以净化这些水并将其用于其他用途？

嗯，污水的清洁、使用以及使用方式都必须获得许可。持续跟进我们的工作，确保我们能够排放这些污水，并且一旦清洁完毕，这些污水将被处理为清洁水，而不是继续按照不同的规则被当作废物处理。我们期待在这些方面获得确定性，并期待与监管机构合作，加快行业所需的响应速度，从而能够应对这些挑战。

JB：我认为这和你们正在开展的一些技术联盟工作很契合。能谈谈你们的合作伙伴吗？以及你们目前的重点是什么？

阿奇：我们最初与雪佛龙、康菲和埃克森美孚组成了一个联合行业联盟，后来科特拉能源公司也加入了进来。在第二阶段，为了与其他公司合作，我们带领该联盟开展了一项非常大规模的试点项目，采用了不同的技术。有些技术可以将水净化到饮用水的水平。世界上任何水都可以净化成饮用水。这只是成本问题。我们已经测试了不同的技术。现在，我们正将某些技术推向更大规模。我们知道，将水处理用于农业、含水层恢复以及在不影响河流环境的情况下将其排入河流需要花费多少成本。技术已经存在。我们已经取得了长足的进步。我们将继续与合作伙伴密切合作。我们也在关注矿产开采。我们也在研究水资源抵免额度和其他补偿措施，这些措施实际上可以帮助我们支付处理这些水资源而非仅仅排放产生的额外成本。我们对目前的情况感到非常鼓舞，如果法规支持将有益的再利用作为减少排放的工具，我们将迅速采取行动。

JB：您提到了矿物开采。您能详细谈谈二叠纪的一些矿物吗？尤其是在这个国家，这是一个如此热门的话题。

阿瑟：是的。部分原因是我们拥有这些水资源，但却浪费了它们。好吧，我想把它变成一种资产。这些水中哪些成分可以提取出来，从而带来益处呢？因为从水中提取碘不需要许可证。例如，你看到我们讨论过碘，我们正在建设一些碘生产设施。通过与碘矿开采商和制造商合作，我们将在年底前在二叠纪盆地建立碘生产设施。大约7%的碘是在美国生产的，其余的则主要来自日本和智利。如果我们继续谈论独立，继续谈论如何利用我们现有的资源，那么我们就可以生产大量的碘，从而让我们更加独立。

我们也知道水中含有氨。氨有很多好处。它含有镁和锂。水中确实含有锂。还有溴，以及所有氯化物和盐。水中含有很多元素。例如，沙特阿拉伯使用海水，并从中提取矿物质。二叠纪盆地某些地方的水比沙特开采的水含盐量高四五倍，或者含有更多矿物质。这是一个开采矿物质的真正机会，如果能够以经济高效的方式进行，也就是目前的重点，那么这将是一笔巨大的生意。

JB：您刚才简单提到了农业再利用。您能谈谈这方面的一些长期潜力吗？

阿瑟：我们与德克萨斯农工大学（Texas A&M University）合作，并且获得了美国能源部（DOE）的资助。因此，我们将扩大棉花和牧草种植的规模，顺便说一句，牧草可以吸收大量的碳。我们现在确信，我们可以处理水，并成功种植非消耗性作物。现在，这取决于经济效益。想想我们在德克萨斯州种植的棉花数量，想想当缺雨导致作物减产时需要支付的保险金额，你就会开始想，如果我们能够用稳定的水源种植棉花会怎么样？而这些水恰好是经过处理的生产水。我们如何才能实现这些经济效益？

JB：显然，你们在二叠纪盆地拥有巨大的增长潜力。华尔街似乎也意识到了这一点。但你们会把目光投向二叠纪盆地以外吗？还是说你们目前还想继续留在西德克萨斯州和特拉华州北部？

AB：就岩石质量、库存量和低盈亏平衡点而言，二叠纪盆地是一个非常高产的地区。它是美国最好的盆地，也是世界上最好的盆地之一。因此，如果我们要离开这个盆地，转而进入另一个盆地，就必须考虑一些外部因素。第一，我们收购的被收购公司是否拥有其他盆地的库存？第二，我们是否有客户希望我们进入另一个盆地，并且经济效益如何？

就华尔街对此的认识而言，投资者注意到水资源正变得越来越重要，并被视为该行业的关键商品。他们看到了我们签订长期合同的客户、客户的质量、我们掌控销量和收入的能力以及对这方面的透明度。我们大幅降低了成本，实现了自由现金流的拐点，并且正在产生可观的现金流，因此能够为投资者带来价值回报。这一点无疑得到了认可。你希望能够继续让所有人满意，但我们对目前的状况、我们的业务、我们的跑道以及顺风顺水感到非常满意。

JB：唯一的另一个问题是说服运营商付款？

AB：运营商愿意为这项服务付费吗？答案是否定的。他们希望尽可能少付钱，并侥幸逃脱惩罚。但是，越来越多的人意识到，他们必须提高费率，以支持所需的基础设施建设，并体现取水和完井的重要性，确保自身不会受到负面影响。但这种紧张关系始终存在。我们签订的是长期合同。但我认为，随着新合同、新区域、新基层、新挑战的出现，费率也会上涨。

The Permian Basin churns out more than 20 MMbbl/d of produced water, according to some estimates. It’s a massive volume that has more than doubled in seven years with no end in sight.

There are all kinds of seismicity, takeaway, cost and regulatory concerns associated with a metaphorical, produced water tsunami. But there also are potential solutions, including long-haul pipelines, recycling, critical minerals extraction, beneficial reuse for agricultural crops and more.

Aris Water Solutions has grown into a top water solutions player in the Permian. President and CEO Amanda Brock is ringing the alarm bells about the rising water challenges, but she’s also ensuring the answers are attainable—at a cost.

Brock discussed the Permian’s water questions and answers with Oil and Gas Investor contributing editor Jordan Blum.

Jordan Blum: On a personal and professional basis, I was curious on what led you to the water niche of the energy sector? And how are you enjoying taking the lead in this increasingly important part of the business?

Amanda Brock: I guess I’ve always been in infrastructure, but the water element of infrastructure has always been ignored. It’s been unsexy. It’s been a necessary evil or a waste. As you think about where we are in focusing on the minimization of waste, whether it’s because of climatic impacts, whether it’s because of just limited resources, then you look at water scarcity and people beginning to take more note of the fact that water is not priced appropriately. I think it’s just an incredibly challenging, yet exciting area to be.

Years ago, I was invited to be the innovation speaker at Gastech in Abu Dhabi, and I thought I just had the best thing to say, which was, “If you have no oil and gas, you’re going to innovate. If you have no water, you’re going to die.” It’s as stark as that. Playing a meaningful role in the pricing, delivery and reuse of water in our current industrial environment is a wonderful opportunity to make a difference.

JB: Water is becoming less unsexy, as you said, and people are understanding the challenges more. But, as of today, how would you describe, especially in the Permian Basin, how much water challenges are still being overlooked? And is water one of the biggest hindrances to production growth?

AB: There is one indisputable fact—the Permian is arid and basically a desert. The aquifers in the Permian do not recharge. There are no large bodies of surface water. Yet this industry, particularly with the advent of hydraulic fracturing, uses large quantities of water, but then it has the benefit of also producing large quantities of water. The produced water, not specific to the Permian, but to all basins, was viewed as a waste. “Somebody, come and take it away. All I want is secure takeaway.”

In the Permian, it’s exacerbated by a couple of things. One, there was no infrastructure until more recently when the Permian began to go into manufacturing mode. Two, in manufacturing mode, the concept of this waste became more challenging. There was so much water to take away and to dispose of, and there was so much water needed to continue to operate.

For somebody like us coming in and saying, “We are going to deliver a comprehensive solution to you, which is to take your water and to recycle as much of it as we can so that you can actually use in your completions the water that is being produced by the industry.” When we started, that’s exactly what we wanted to do. When we began, it was still sort of viewed as a waste: “If it doesn’t impact my fracking chemistry and it doesn’t hinder my timing, then I’ll use my water.”

And then to where we are today, which is the demand from the operators to use as much recycled water as they can because we have proven that it is safe. It can be delivered to where they want it in the quantity and quality they need it. So, I think there is a much greater appreciation in the industry of the importance of water because, if you have no secure takeaway and if you don’t have water for completions, it’s impacting your own extraction and ability to continue to grow and exploit your minerals.

JB: I know it’s changing every day, but how reluctant still are the producers to pay the extra bucks for the infrastructure and the recycled water capacity?

AB: It is not so much the recycled water because, if you think about what water they would use otherwise, it would be brackish or freshwater that would have to be piped to them over fairly long distances depending on where they are. So, we can very cost-effectively provide them with recycled water. The bigger issue is disposal, the amount of infrastructure that is needed to address this wall of water and the cost of that infrastructure is increasing. It started with, “Please, take my waste away.” Well, that waste, finishing up last year, is now approximately 21 MMbbl/d. There’s 21 MMbbl/d of produced water in the Permian that has to go away every single day, and that is an astonishing number. By 2030, the estimate is that’s going to be 30 MMbbl/d. Water intensity is increasing. Where’s it going to go? Who’s going to take it away? Who’s responsible for it? It can’t be compressed. It can’t be flared like gas.

So, anything that constrains that takeaway or redelivery of water for completions is now being looked at. But you’re competing on LOE, right? Everybody wants to do it as cheaply as possible, but there is a growing realization, particularly with the challenges that are arising from the handling of this wall of water, that rates are going to have to go up. The bottom line is, without this water infrastructure to support their operations, their operations will be significantly impacted in a negative way.

JB: Can you describe a bit more just the scale of the infrastructure that is needed and what Aris’ plans are to fill the gap?

AB: From the beginning, we’ve always approached this as delivering comprehensive water solutions. We’ll take water away; we’ll bring water back. There are companies out there that just deal with takeaway, and somebody else comes to deal with completions. We believe that somebody who had a system that could take all this water away across a large geography could also then move water to where it was needed for recycling with the optionality to give it back to other operators who might need it at a different time. You were able to manage peaks, you were able to increase utilization and, basically, deliver a more holistic service to the companies like our customers. Our largest customers are Chevron and ConocoPhillips—Conoco also happens to be our largest shareholder. We could do that in a way that was proven so there would be greater adoption.

In our system today, we have over 800 miles of pipe. We have 1.5 MMbbl/d of recycling capacity, and we have 1.8 MMbbl/d of disposal capacity. That’s us. I’ve just told you that there’s 21 MMbbl/d. In our geographic area, we are fine, but there’s a much larger geographic area. There’s an entity called B3 [Insight] that’s predicting there will be a shortfall of disposal capacity going into the future. Companies who look ahead are beginning to say, “I have to secure avenues for disposal and to ensure that I’ve got water for completions if I am going to meet my projections that I’m telling my shareholders.” So, there’s a lot more inventory planning and infrastructure planning because there’s not enough infrastructure today to support the growth of water that is coming.

JB: Can I get you to describe the Midland versus Delaware challenges and how they vary?

AB: Some of the differences are regulatory to the extent that the northern Delaware is in New Mexico, and the regulatory environment between the two states is fairly significant. I think it is important to realize that New Mexico, northern Delaware, your land ownership and your water ownership is different. You have fee land, you have the BLM (U.S. Bureau of Land Management), and you have state. Water is an adjudicated water right. So, just because you have water below your land, it doesn’t mean you can sell it to the oil and gas companies. In fact, you can’t unless it is allocated to industrial water, and that is being limited.

In Texas, you have fee land, and you have the rule of capture, which means below the land I own, if I have water, I can suck up as much as I want and sell it to you. The likelihood of the landowner wanting you, Mr. Operator, to bring somebody else’s water onto his land is low, particularly if he doesn’t have a mineral interest. Everybody wants to maximize their assets, and so your ability to build large systems, like we did in the northern Delaware and New Mexico, is hampered. It is also, as you said, an older basin. It’s much more fragmented, not only by the land ownership, but by virtue of the mineral ownership and the ability to create systems, which lend themselves to greater efficiency.

JB: Obviously, there’s the issues with seismic events for the disposal of water, but can you talk about how that’s leading to more shallow injections and creating additional challenges? And can you elaborate on the lack of pore space?

AB: The industry has taken actions to address the seismic activity. We’ll focus primarily here on Texas. With increased seismic activity and with increased scrutiny, particularly when the seismic activity occurs in the city of Midland and it shakes people up, the Railroad Commission [of Texas] has been very pragmatic in the ways they have worked with industry to have industry-led solutions. They’re able to manage wanting to continue to get the royalty stream from the minerals, which obviously supports education and other benefits in Texas. In New Mexico, it supports massive programs. So, the industry has moved to more shallow injection.

They’ve also constrained activity in certain areas of high seismic activity. But, by virtue of moving more to shallow, working with the regulators, you have seen a positive impact on both the severity and the number of seismic events in some of these areas that we’ve been focused on. The bottom line is Culberson [County, Texas], for example, if you look at the seismic activity, it has decreased as operators have moved to shallow wells. So, it appears that deep injection was contributing more to greater seismic activity in these areas.

JB: But there’s only room for so much shallow injection as well, right?

AB: There is, especially when you have got this much water. Of course, you raised the word pore space. Everybody is focused on whether there’s going to be enough pore space. What you are looking at is subsurface geology and all of this water that needs to be put somewhere, and what will that long-term impact and effect be? The regulators are looking at that, as well. What people are doing is planning ahead. If, in fact, your pore space becomes more constrained or there is a localized impact associated with injection, where else can you go?

That helps people like us. We have a system and a big geographic footprint, so operators like to work with someone like us where you can disperse this water over large areas of disposal. That is a tailwind for us. But, long term, people are looking at if there are other places outside of the productive basin where they can send water longer distances.

That goes to the question of the long-haul pipeline. Are people looking at long-haul pipelines? And the answer is absolutely yes. They are buying land; they are permitting rights of way. They are working with the majors and others who tend to think longer term to ensure that, in the future, they have future places to disperse.

JB: Can you give an example of how far away water is dispersed now?

AB: When you have a large system or you have long pipelines, once it hits the pipeline, it’s commingled. It is a function of disbursement, but the answer is some of this water is going 20 miles or more and, in the long-haul pipelines, it might go 50 miles or more.

JB: Can I get your take a bit more on what you’d like to see changed on a regulatory basis?

AB: We want regulatory certainty. We want regulations to keep up with the pace of change, and we want regulators to be pragmatic and collaborative. In many areas they are, but this water challenge is such that regulators are concerned about what the long-term impacts and effects may be. When we are working on things such as beneficial reuse, which is one of the tools in a toolbox, if you’ve got all this water you can dispose, can you also clean this water and use it for other ways?

Well, cleaning it and using it and how you use it has to be permitted. Keeping up with what we are doing so that we know that we will be able to discharge this water and, once cleaned, that this water will be treated as clean water rather than continue to be treated as a waste with different rules. These are the things that we look forward to having certainty on, and to working with the regulators to speed up what the industry needs to be responsive, and be able to deal with these challenges.

JB: I think this fits in with some of the technology consortium work you’re doing. Can you touch on your partners there, and what you’re focused on at the moment?

AB: We did a joint industry consortium originally with Chevron, Conoco and Exxon, joined [later] by Coterra [Energy]. In phase two, to be joined by others, we have led that consortium to conduct a very large pilot with different technologies. There are technologies to clean this water to drinking water levels. Any water in the world can be cleaned to drinking water. It’s just a function of how much it is going to cost. We have tested different technologies. We are now going to larger scale with certain technologies. We know [about] what it’s going to cost us to treat water for agriculture, for aquifer recovery, for discharge environmentally into a river where it does not impact in any negative way the condition of that river. The technology is there. We’ve made great strides. We continue to work closely with our partners. We are also looking at mineral extraction. We are also looking at water credits and other ways that we can find offsets, which in fact will help pay for the extra cost of treating this water versus just disposing of it. We are very encouraged by what we have seen, and we are rapidly moving toward adding beneficial reuse if the regulations support it to be a tool in the toolbox to minimize disposal.

JB: You brought up mineral extraction. Can you elaborate on some of the minerals in the Permian, especially since it’s such a hot topic in this country?

AB: It is. Some of it is because you’ve got this water, and it’s a waste. OK, I want to make it an asset. What’s in this water that could be extracted that would be beneficial? Because, extracting it from the water, you don’t have to get a permit for that. For example, you’ve seen us talk about iodine, and we are siting some iodine facilities. Working with iodine miners, manufacturers, we will have iodine facilities in the Permian by year-end. About 7% of iodine is manufactured in the U.S. The rest comes in largely from Japan and Chile. If we keep talking about independence, and we keep talking about using what we’ve got, well, we can produce a lot of iodine that makes us more independent.

We also know there’s ammonia in the water. Well, there’s a lot of benefits for ammonia. There’s magnesium and lithium. There is indeed lithium in the water. There’s bromine, all of your chlorides, your salts. There is a lot in this water. Saudi Arabia, for example, uses seawater, and they’re extracting minerals from seawater. The water in the Permian in some places is four, five times saltier or contains more minerals than what Saudi is extracting from. There is a real opportunity to extract minerals and, if it can be done cost effectively, that’s where the focus is right now, then this will be a great business.

JB: You touched briefly on agricultural reuse. Do you want to discuss some of the longer-term potential there?

AB: We work with Texas A&M [University], and we have a DOE (U.S. Department of Energy) grant. So, we will be expanding what we’ve done to grow cotton and to grow range grass, which, by the way, sequesters a lot of carbon. We are at a point we now know with certainty that we can treat water and successfully grow non-consumptive crops. Now, it’s a function of where the economics make sense. If you think about the amount of cotton we grow in the state of Texas, and you think about the amount of insurance that is paid when it doesn’t rain and crops fail, then you begin to think, OK, what if we could grow cotton with a steady supply of water? It just happens to be treated, produced water. How do we make these economics work?

JB: Obviously, you have a lot of growth potential in the Permian. Wall Street seems to be recognizing that. But would you ever look outside the Permian? Or do you want to stick with West Texas, northern Delaware at this point?

AB: The Permian, in terms of the quality of the rock, the inventory and the low breakevens, make it a very productive place to be. It is the best basin in the country. It’s one of the best basins in the world. So, for us to leave this basin and to move into another basin, there would have to be some extraneous factors. One, did we make an acquisition that the acquired entity had other basins in their inventory? Two, do we have a customer who wants us to go to another basin and the economics work?

In terms of Wall Street recognizing this, investors are taking note that water is becoming more critical and is being viewed as a critical commodity for the industry. And they see our customers with long-term contracts, the quality of our customers, our ability to look at the volumes and the revenue and the visibility on that. We have lowered costs pretty dramatically, and we’ve hit free cash flow inflection, and we are generating substantial cash flow and, therefore, are able to return value to investors. That has certainly been recognized. You hope to be able to continue to please everybody, but we feel very good about where we are and our business and our runway and the tailwinds.

JB: The only other question is about convincing operators to pay up?

AB: Do operators want to pay for the service? The answer is no. They want to pay as little as possible and get away with it. But, there is a growing realization that they are going to have to increase rates to support the infrastructure that is needed, and to reflect the importance of water takeaway and completions to ensure that they are not negatively impacted. But there’s always going to be that tension. We have long-term contracts. But, I think with new contracts, new areas, new benches, new challenges, rates will rise.