Water Use in the Eagle Ford Shale: An Economic and Policy Analysis of Water Supply and Demand

The Eagle Ford Shale is a massive geologic formation located in South Texas spanning 30 Texas counties from Brazos County in the north east to Webb County in the southwest . With the advent of hydraulic fracturing (HF) and horizontal drilling, over 200 operators have been able to tap into previously inaccessible shale reserves to p roduce abundant amounts of oil and gas. The oil and gas proliferation in the Eagle Ford has seen exponential growth , and production is not anticipated to decline until 2025. In addition, a typical HF well in the Eagle Ford is estimated to consume about 13 acre - feet of water for a standard 5000 foot lateral . Approximately 90% of water for HF comes from fresh groundwater aquifers. This interaction of HF and water consumption is of primary importance from a poli tical and economic perspective. This s erves as t he focal point of our report. Using the tools of statistics, our research considered the groundwater consumption trends within the Eagle Ford counties using water consumption data of municipal, irrigation, mining (oil and gas) and other categories over a span of four years . This analysis showed that fresh groundwater is being consumed at about 2.5 times the groundwater recharge rates . Furthermore, irrigation is using more water than all other water - consuming categories combined. Thus, the water problem reaches well beyond the use of fresh grou ndwater for mining . With respect to likely requirements of water for HF, we posited this question: “ W ill technology bail us out?” Retrofitting learning curves to our data for water uses and the length of the well la teral , we find that after i nitial improvements in water us age, the technology appears to have stabilized. This, coupled with massi ve irrigation water consumption suggests that technology will not be a major source of water savings in the long run. Instead, we must look to better public policies . From a policy perspective, the status quo for groundwater u se is governed by the Rule of Capture and the oversight of groundwater conservation districts (GCDs) . T here exists a real conflict as large - scale water users are competing for a diminishing aquifer resource with no market signals of increasing scarcity. In addition, groundwater wells drilled in connection with oil and gas exploration are exempt from GCD per mitting requirements and receive a de facto “free pass” to water for HF. Likewise, limita tions imposed on irrigation users by the GCDs are rarely binding, so these users usually get a free pass as well. Our analysis leads us to three basic policy recommend ations . The first involves mandatory reporting of all groundwater uses by all classes of water use r s. Currently, government agencies and the public lack basic information on actual water consumption; t his policy seeks to relax that knowledge gap and bring transparency. Second , we propose incentivizing oil and gas companies to substitute brackish groundwater for fresh ground water. Our proposal calls for a severance tax reduction for tho se companies limiting fresh groundwater use for HF in the Eagle Ford. In addition to a temporary reduction in the severance tax, these companies c ould be recognized by the RRC and possibly the TCEQ for their environmental stewardship with a “ Green Star ” designation. Our t hird , most heterodox and long - term recommendation is to define ground water property rights on a per - acre ownership basis, which would attach to the surface owner’s real property. Under this system, the owner s of the water rights would be able to sell their water as they would any other resource, and the market would adjust the price of water to an economically efficient level. Most importantly, it would remove the incentive to use all you can today , leaving more water for the future at a lower future price.Commissioner Christi Craddick, Texas Railroad Commissio

Develop an Improved SDDOT Construction Cost Index

311219A highway construction cost index (HCCI) is an indicator of the purchasing power of a highway agency. Highway agencies can monitor their construction market conditions using HCCIs to make various financial planning decisions. The main goal of this study is to modernize the HCCI system of South Dakota DOT by developing an enhanced HCCI calculation and forecasting methodologies and a software program by incorporating recent guidance from the Federal Highway Administration and adopting advanced theories on HCCI calculation. To achieve the goal, the study a) reviewed the current HCCI calculation methodology used by the agency, b) interviewed potential HCCI users from South Dakota, c) developed a proven multidimensional HCCI calculation methodology using the concept of the dynamic item basket, and d) developed two methods to forecast HCCIs, and e) developed a software program to automate the HCCI calculation and forecasting processes. In addition to the overall HCCI, more than a dozen sub-HCCIs were developed to show more granular market conditions across the state of South Dakota. The sub-HCCIs showed that specific construction market conditions, such as rural and urban market conditions, do not necessarily follow the trend of the overall statewide market condition. For HCCI forecasting, a linear regression model provided a better result than the weighted time series method. The methodologies and the software program developed for this research are expected to aid SDDOT in improving its ability to monitor the construction market trend closely and more accurately. The availability of more granular market conditions from sub-HCCIs are expected to increase the use of HCCIs at SDDOT

Groundwater use in the Eagle Ford Shale: some policy recommendations

Advances in hydraulic fracturing (fracking) and horizontal drilling have allowed oil and gas companies to tap into Texas’ previously inaccessible shale reserves. Fracking in the state has grown at an exponential rate and is not expected to decline until 2025. Fracking requires the consumption of vast amounts of groundwater, a resource that is already strained. This study quantifies the water consumption associated with fracking in the Eagle Ford Shale, evaluates the current regulatory framework, and proposes 3 policy recommendations. The data show that fracking has become the primary consumer of groundwater in the most active counties within the Eagle Ford. Our study proposes 3 policy solutions to ensure that groundwater is consumed in an economically efficient manner in these areas. These solutions are a more thorough system for reporting consumption, tax incentives for oil and gas companies to use substitutes for fresh groundwater, and an alternative property rights system to the current rule of capture system. Citation: Steadman M, Arnett B, Healy K, Jiang Z, David LeClere, Leslie McLaughlin, Roberts J. 2015. Groundwater use in the Eagle Ford Shale: some policy recommendations. Texas Water Journal. 6(1):67-78. Available from: https://doi.org/10.21423/twj.v6i1.7023

Mediation as a New Technique for Resolving Disputes in the Mental Health System

In the mental health service system, disputes take on various forms and exist in both clinical practice and management. Existing policy and administrative practice has favored a combination of medical and judicial/legal models to handle conflicts among consumers, mental health professionals, and others. The authors propose the addition of mediation as a third form of resolving issues, explicate some of the differences between mediation and current methods of resolving conflicts, and suggest benefits of using mediation