Posted July 9, 2014
The 115-year-old Kern River oil field is providing another valuable commodity to California’s Central Valley: water, according to a New York Times article by Norimitsu Onishi available here. CNBC also published the NY Times article here.
Chevron owns the field and sells millions of gallons every day to a local water district that distributes it to farmers growing almonds, pistachios, citrus fruits, and other crops.
The water is pumped out of the same underground rock that contains oil. After the two are separated, the water flows through an eight-mile pipeline to Bakersfield’s Cawelo Water District, which will rely heavily on Chevron’s supply this year. The district sells the supply exclusively to farmers for irrigation, and they reduce salinity in water by blending it with water from other sources.
“These are the years that it really shines, because that water is constant no matter what the hydrology is,” said David R. Ansolabehere, the district’s general manager. “In wet years, it almost becomes a problem because we don’t have so much use for it. But in dry years, boy, it really does come in handy.”
Criticized for its use of water, especially in the process known as “fracking”, the oil industry is focusing on efforts to conserve and recycle water and increase irrigation supply. Critics are dismissing the efforts as a political ploy.
California relies on industry figures to determine the amount and kind of water used in oil production. According to the Western States Petroleum Association, 323 acre-feet of water were used in fracking 830 wells in California in 2013, compared with 2.7 million acre-feet for agriculture in Kern County.
“It’s almost impossible to get information,” said Adam Scow, the California campaign director for Food and Water Watch. “How much water is the oil industry using every year, whether it’s fracking, acidizing, cyclic steaming or other methods?”
Oil producers and farmers have resided peacefully in Kern County for decades, but that has changed recently.
Due to advances in drilling technology, oil companies have moved into agricultural areas. The drought is also another hardship on the relationship.
Richard Howitt, an emeritus professor of agricultural and resource economics who was the lead author of the report for the State Department of Food and Agriculture, said it was not possible to measure the effect of the oil industry’s water consumption on agriculture. But given the intensity of the drought, Mr. Howitt cautioned against increasing fracking.
About 760,000 barrels of water a day are produced at the Kern River oil field as compared to 70,000 barrels of oil, and half of that water goes to the Cawelo Water District.
In normal years, Chevron’s water is a slightly cheaper than water bought from the state, which sells for $30 to $60 per acre-foot, said Mr. Ansolabehere, the water district manager. This year, while the price of Chevron’s water is unchanged, water from the state is valued up to $1,300 per acre-foot. Water districts receive only a small fraction of what they are supposed to get from the state, he added.