Fracking 101 for Investors: Profiting From the Water Problem

Source: Flickr/Andrea.

American drilling companies use 3-5 million gallons of water to frack each and every shale well in the U.S. Most of that water comes from freshwater sources. This is increasingly becoming an issue for the industry, as many of America's shale wells are being drilled in water-starved areas or are putting added pressure on local municipal water systems. These issues, however, represent a compelling opportunity for oil-field service companies like Halliburton (NYSE: HAL  ) and Nuverra Environmental Solutions (NYSE: NES  ) , which are working on a compelling solution to recycle frack water.

Halliburton has an ambitious goal to reduce its freshwater usage by 25% this year. One of its initiatives to meet that goal is to frack wells using H2O Forward, which is a water recycling initiative with Nuverra Environmental Solutions. It represents a compelling profit opportunity for investors.  

To help investors better understand the water problem, as well as the opportunity from providing a solution, I created the following slideshow. It takes a closer look at how Nuverra Environmental Solutions and Halliburton plan to profit off of the water problem caused by the growth of fracking.

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Matt DiLallo

Matthew is a Senior Energy and Materials Specialist with The Motley Fool. He graduated from the Liberty University with a degree in Biblical Studies and a Masters of Business Administration. You can follow him on Twitter for the latest news and analysis of the energy and materials industries:

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8/28/2015 4:03 PM
HAL $38.59 Up +0.55 +1.45%
Halliburton CAPS Rating: *****
NES $2.59 Down -0.02 -0.77%
Nuverra Environmen… CAPS Rating: ***