The surge in hydraulic fracturing in the U.S. is starting to run into a problem: It is getting harder and harder to find water supplies to use in fracking wells. At 5 million gallons per well, and with 44,000 wells being drilled in the U.S. each year, the oil and gas industry is using about two-thirds of what the city of New York City uses in an entire year. To add insult to injury, many of the regions where oil and gas drilling is taking place are already short on water resources. It is getting to the point where some drilling permits are being denied because of a lack of water resources.
To help combat this situation several companies are stepping up to provide new solutions. Schlumberger (NYSE:SLB) and Halliburton (NYSE:HAL) are experimenting with using non-potable water sources for drilling fluid, and companies like Nuverra Environmental Solutions, formerly Heckmann, are constructing a nationwide network to recycle and reuse water for hydraulic fracturing operations rather than disposing of it after one use. In this video, Fool.com contributor Tyler Crowe explains how these solutions are working around the country and what we can expect from the industry.
The Motley Fool recommends Halliburton. The Motley Fool owns shares of Devon Energy and Heckmann and has the following options: Long Jan 2014 $20 Calls on Chesapeake Energy, Long Jan 2014 $30 Calls on Chesapeake Energy, Short Jan 2014 $15 Puts on Chesapeake Energy, Long Jan 2014 $4 Calls on Heckmann, and Short Jan 2014 $3 Puts on Heckmann. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.