As a provider of sustainable water management solutions for energy producers Select Water Solutions' senior vice president of corporate development, investor relations and sustainability Chris George outlines the potential for water recycling in the energy transition and the importance of water stewardship in traditional energy production.
Environmental Finance: Why is transparent sustainability reporting important to Select Water Solutions?
Chris George: Greenhouse gas (GHG) emissions are a top priority for us and Select initiated emissions reporting as part of its 2022 Sustainability Report. However, as a water-oriented company, we must offer transparency and visibility into the fundamental application of our business around water stewardship as well. We continue to increase the number of volumetric water reporting frameworks with historical data. For us, this means attracting talent, customers, and investors while providing a core sustainability framework essential to our business and market presence.
EF: What were the driving factors that are behind your desire to double water recycling volumes by 2025? What is the goal after that?
CG: Unlike GHG emissions, which are more intangible with global implications, water scarcity is a highly tangible and localised challenge. Each geographic area, whether dealing with water scarcity or efficient waste disposal, has its own unique dynamics. Our focus is on delivering customised localised solutions wherever we operate.
Our efforts to double the recycled water volumes primarily stem from the energy industry's initiative to move away from freshwater usage. This shift aims to eliminate the consumption of freshwater resources that compete with other essential demands such as municipal applications and agriculture, especially in the communities we operate in. This transition makes the industry self-sufficient, utilising the water we produce within a closed-loop, full-lifecycle solution.
By setting concrete targets, we establish an external framework that guides our actions, links to management compensation and provides a structure we can communicate to our customers regarding their water consumption practices in these areas.
EF: Is this an industry trend or are you trying to lead from the front in this area?
CG: The long-term trend toward advanced water recycling is central to our strategy. However, after evaluating over 200 different water technologies over a decade, including our own, we've realised there's no single solution to the problem. We must have a robust technology portfolio integrated with chemistry manufacturing and development expertise that allows us to ensure customised solutions can meet both the operational and economic needs of our customers as well as the regulatory requirements and stewardship desires of our communities.
Introducing a sustainability-linked framework to our credit facility was unprecedented in our industry. We spent time crafting ambitious yet achievable objectives that would consistently guide behaviour throughout the programme's duration. Our aim was to use a mix of metrics to promote consistent growth and advance recycling in the industry.
When we signed the agreement, we didn't have the necessary facilities in place to meet these targets. We recognised that achieving them would demand more capital investment and research and development with our customers. As for our safety metric, we set a 25% outperformance target relative to industry average standards, which would place us among the top companies in our industry, maintaining this level of consistency throughout the programme's lifespan.
EF: How sustainable can you be while serving the oil and gas industry?
CG: Water is a critical aspect of managing both traditional energy as well as the energy transition. Select is committed to focusing on stewarding water within the oil and gas sector as we believe that the demand for oil and gas will remain robust for years to come.
In the US, the rapid growth of unconventional shale development, particularly in natural gas, has presented one of the most significant opportunities for emission reduction over the past decade worldwide. Instead of moving this technical capability and responsible resource development out of the US to international actors who may not prioritise stewardship, we should be incentivised to promote sustainable development of our natural resources in the US.
Shifting oil demand and supply from the US to other international arenas would likely result in a significant increase in emissions intensity, which is counterproductive to our national and global energy transition objectives.
Regarding water stewardship, whether it involves rare earth mineral extraction for supporting electric vehicle development, direct air capture, carbon sequestration, or hydrogen production, all of these energy transition opportunities are highly water-intensive and require clean water applications. The potential stress on water resources from these energy transition opportunities is often underestimated.
In addition to supporting the energy transition, efficiently treating and recycling water produced from the traditional energy industry, followed by environmentally responsible discharge for beneficial reuse applications such as non-consumable agricultural development after proper cleaning, testing, and sustainable management, could potentially transform the industry into a net-positive contributor over the next five to ten years, rather than being a net consumer.
For more information, see: www.selectwater.com