Click the link to read the article on the Inside Climate News website (Jake Bolster and Martha Pskowski):
March 13, 2025
Freshwater use in oil and gas drilling has come under scrutiny in Colorado as the state faces a historic drought. On Wednesday, March 12, state regulators announced new rules that will require drillers to use more recycled water in their operations and, hopefully, relieve pressure on scarce freshwater resources.
As Colorado continues to produce fossil fuels at record pace, the Centennial State has become awash in a caustic, brackish and chemically-laden fluid known as produced water, a byproduct of the drilling and fracking process.
This water can have high levels of salts, metals and other contaminants, making it more difficult and expensive to treat for reuse than for disposal. Oil and gas companies in Colorado typically dispose of produced water by pumping it back into old, out-of-service wells and other geological formations using injection wells, permanently severing it from the hydrological cycle. Meanwhile, freshwater demand for oil and gas production in Colorado is forecasted to rise in the coming decade as the industry drills deeper vertically and farther horizontally.
The oil and gas industry, whose activity in Colorado accounts for almost 4 percent of U.S. total crude oil output, uses about 11 billion gallons of fresh water annually in Colorado, according to data collected by the Colorado Energy and Carbon Management Commission (ECMC). That’s comparable to the amount of water stored behind a small dam, but accounts for less than one percent of all fresh water used in the state.
“Things are changing quickly” for Colorado as climate change intensifies, said Harmony Cummings, a director of the Green House Connection Center, an environmental nonprofit party to the rulemaking. “How low the reservoirs are is terrifying to me.”
Turning Waste Into a Resource
In 2023, the Colorado state legislature passed HB23-1242 (Water Conservation In Oil And Gas Operations: Concerning water used in oil and gas operations, and, in connection therewith, making an appropriation), which required the ECMC to adopt rules “requiring a statewide reduction in usage of fresh water and a corresponding increase in usage of recycled or reused water in oil and gas operations.”
The bill also created Colorado’s Produced Water Consortium, a body of 31 people including regulators, industry representatives, environmentalists and scientists. The group is studying how produced water that comes to the surface during drilling can be reused in other oil and gas operations to reduce freshwater consumption, and its reports served as the basis for its recommendations to the ECMC.
“The consortium started out with everyone coming in with an agenda,” said Hope Dalton, the consortium’s director. “Then they began to learn from each other and trust each other and really work to create these data-informed recommendations…I think the recommendations are very solid.”
Produced water is a catch-all term for water that flows out of oil and gas wells after conventional drilling or hydraulic fracturing, or fracking. This liquid waste can contain drilling chemicals injected into wells, toxic hydrocarbons like benzene, a known carcinogen, and water dislodged from deep underground that carries sediments, salts, metals like barium, manganese and strontium, and Naturally Occurring Radioactive Materials (NORM).
The Produced Water Consortium compiled data on existing water practices in Colorado’s oil and gas industry to inform the rule-making. It found that water diverted for fracking in Colorado totals about 26,000 acre feet a year, or 0.17 percent of the state’s total water use. One acre-foot is 325,851 gallons of water, meaning the oil and gas industry holds rights to about 8.5 billion gallons of freshwater annually.
Between July 2023 and March 2024, according to the consortium’s findings, operators reported to the state that they disposed of 87 percent of their produced water and recycled the remaining 13 percent. Companies reported that 93.2 percent of produced water disposal was into underground injection wells. Much smaller volumes of water are disposed of in pits or discharged into state surface water bodies. The initial data on recycling rates is self-reported by the companies and only reflects the short period of time that reporting has been required.
The Denver-Julesburg basin, or DJ Basin for short, along Colorado’s Front Range is home to a vast majority of the industry’s development and water demand. It is also home to the vast majority of the state’s population, including the metro areas of Denver, Boulder and Fort Collins. From 2019 to 2024, an average of two new fracking wells were completed daily in the DJ Basin, five-and-a-half times the industry’s rate in other basins in the state, according to ECMC data.
Companies in the DJ Basin account for almost three quarters of the industry’s total water use, according to ECMC data from 2022. In the DJ Basin, only 0.4 percent of that water is recycled. The Western Slope, which is more rural, has fewer drilling companies but a much higher rate of recycling produced water for operations, sometimes as high as 100 percent.
Under Colorado’s new regulations, by the beginning of 2026, oil companies must use at least 4 percent recycled produced water across their operations in the state. In 2030, that requirement increases to a minimum of 10 percent.
The ECMC will convene again in 2028 to draft new benchmarks beyond 2030. If a consensus fails to emerge, minimum averages of 20 percent recycled water in 2034 and 35 percent in 2038, as recommended by the Consortium, will become law.
If an operator is unable to meet these thresholds, they would be allowed to purchase “credits” for excess produced water recycled by other operators, but only if those credits would be used in the same basin.
“Increasing recycling doesn’t necessarily equate to a decrease in freshwater” use, said Cummings. If the rate of fracking in Colorado rises faster than the produced water recycling thresholds, it’s possible that produced water reuse and freshwater use could both go up, she said.
Other new rules require oil and gas companies to make quarterly reports on what freshwater is used for, the total amount of water and produced water used in each basin, and figures on emissions from truck traffic, among other statistics. Operators will also be required to report how they would meet produced water reuse thresholds. The ECMC could issue penalties to companies that don’t comply with the new rules.
But Cummings worried those penalties aren’t onerous enough. There are “no real teeth” in the enforcement mechanisms, said Cummings, who spent eight years working in the oil and gas industry. If given the proper combination of regulation and incentives, she is confident companies could recycle produced water at greater rates than Colorado is requiring.
“I’ve seen them do incredible projects when profits are on the other side of that,” she said.