Market Opportunity Remediating Oil-Contaminated Water

Stocks Covered:

Cameron Intl Corp (NYSE: ), General Electric (NYSE: ), Nalco (NYSE: ), National Oilwell Varco (NYSE: ), Veolia (NYSE: ), Wescorp Energy (OTCBB: WSCE), Weatherford International (NYSE: )

Although oil spills capture headlines, a greater environmental challenge for the oil and gas industry is remediating water polluted in their production operations. Water that comes up with the production of oil and gas is called "produced water.’"  Produced water is tainted with hydrocarbon solids, sand, drill cuttings and salts. Oil companies spend an estimated $50 billion every year remediating and/or disposing of produced water to comply with local, state, provincial and federal environmental laws.

The volume of produced water worldwide is estimated at tens of billions of barrels each year. On average, every barrel of oil produced results in three barrels of produced water. That equates to managing or disposing of more than 250 million barrels of produced water each and every day. The hydrocarbons trapped in produced water are, not only an environmental hazard, but also a source of lost revenues. Data indicates that, on average, nine tons of oil is released via produced water for every million tons of hydrocarbons produced.

Disposal costs for produced water add to already high energy bills. These costs typically include trucking, pre-treatment, injection and desalination, and can run as high as $15 per barrel.