Hydraulic fracking without the water? Photo credit: Flickr/Snap

Opponents of hydraulic fracturing have many criticisms of the process. From the chemicals injected into the ground to the heavy truck traffic there are plenty of reasons to find fault with the fracking process. However, perhaps the biggest concern is the "hydro" that is the foundation of the process. To many, the fact that each and every well requires millions of gallons of water is to high a prices to pay.

Now we're fracking with gas
It's a price, however, that might not need to be paid any longer. That's because some companies are trying to take the hydro out of hydraulic fracturing. One such company, Canadian oil-field service company GASFRAC Energy Services, has developed a process to frac wells with liquefied petroleum gas, or LPG. The process replaces water with natural gas liquids such as propane, butane or pentane. 

The benefits of the process don't end with eliminating much of the water used in the fracking process. For example, the wells will flowback the LPG which can then be processed and sold to recoup some of the investment. Because the flowback doesn't need to be disposed of it creates less truck traffic that adds to the environmental advantages of the process. To top it off, the process also yields higher initial production rates, which creates a real, win-win solutions for producers. That being said, the process does cost more money and with cost containment such a driver for companies that puts this process at an economic disadvantage with water.  

Using LPG is just one option that's now available to producers. Another spin on a waterless process is using nitrogen to frack wells. Air Products (APD 0.43%) is one company that supplies nitrogen for fracking fluids. It can provide both performance and cost advantages in certain formations over water-based fracking. The key though is nitrogen is only really practical in an ideal situation which is in shallower wells that can stay propped up without the use of proppants like sand as nitrogen is a poor proppant carrier.

Making waves in the energy industry
If either process makes gains with drillers it could cause an epic shift in the industry. For example, one of the reasons why SandRidge Energy (NYSE: SD) has been one of the few companies to find success in the Mississippian Lime is because of how it has handled the water issue in general. The formation is already very saturated with water so when hydraulically fracked it creates an enormous amount of water flowback that needs to be disposed. The company has spent more than half a billion dollars drilling disposal wells to support its drilling program. Now that the infrastructure is built, it has a cost advantage over its peers and can drill higher returning wells. It's possible that a waterless frack could help other producers join SandRige in unlocking the oil and gas riches of the Mississippian.

Further, a wider adoption of waterless fracking processes could put the brakes on the water recycling partnership of Nuverra Environmental Solutions (NESC) and Halliburton (HAL -0.47%). Without water being used in the frack job it could render much of Nuvera's solutions useless. On the other hand, if the pair can make waves with this process it could become the gold standard in the industry making a move to waterless fracking unnecessary as water won't be as big an issue as it is currently. Halliburton's plan is to cut the use of fresh water used in the fracking process by 25% by the end of next year. That's a bold goal and millions of gallons of water are on the line if it's unsuccessful.

Investor takeaway
The industry needs to do something about its water usage. Using LPG or nitrogen could be a long-term solution especially in arid climates meaning that it is an area investors should monitor. However, the short-term focus of the industry appears to be on the side of water recycling, whether that's as part of the Halliburton-Nuverra solution or an in-house treatment solution. The industry knows it has a water problem and it is looking for ways to reduce the amount of water it uses.