Strategic Reporting and the Effects of Water Use in Hydraulic Fracturing on Local Groundwater Levels in Texas
Strategic Reporting and the Effects of Water Use in Hydraulic Fracturing on Local Groundwater Levels in Texas

Photo: Michael Ciaglo/Houston Chronicle via AP

December 19, 2019

Project Summary

High-volume hydraulic fracturing allows for the extraction of otherwise inaccessible natural resources but requires large amounts of water. As this process has become more widespread in the U.S., rapid increases in water use by oil and gas producers have raised concerns about the effect on the water supplies of surrounding communities.

In this paper, author Jesse Backstrom analyzes data from Texas to examine two specific issues related to the industry’s water use: the effect of hydraulic fracturing on local water availability, and the tendencies of producers when reporting details on their water use.

  1. The author provides evidence of a causal link between the volume of water used in hydraulic fracturing and declining local groundwater availability. He estimates that five new wells within a ten-mile radius lead to about a two-foot drop in the groundwater level, suggesting that transparency in reporting is essential for water management.
  2. The author shows that operators detail information on their water use differently based on whether a well is located in an area where groundwater availability is more of a concern. He finds that operators of wells located in a groundwater conservation district are 1.3 – 2.8 percentage points more likely to omit key details of their water use and report only the minimum requirements. Those operating wells outside of these districts often report more details that can help improve water management. Minimum reporting is especially prevalent for more water-intensive wells.

These findings provide valuable insights for states and countries with water-intensive trades and, more generally, water management and policy. For example, states with industries whose water use may have significant local impacts may consider requiring water use reporting to include disclosure of the water sources and volumes used. The use of online water marketing platforms, like those currently used for other goods and services, could also be standardized and help create formal accounting for water transactions. Policies that increase the transparency of water use and the ability to study tendencies of water users (e.g., responsiveness to changes in prices) would provide greater insight into how water withdrawals affect water stocks. This will allow for more effective management of groundwater resources over time.

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