The torrent of dirty water coming out of almost every American oil well is the next big bet for a former fund manager for billionaire Paul Allen.
Getting rid of wastewater from onshore wells has become an increasingly costly problem for oil producers as US crude output surged in recent years, especially in the new shale fields from Texas to North Dakota. Drillers typically get about seven barrels of water for every one of oil, and some struggle to deal with the overflow that is mostly sent by truck to disposal sites miles away.
David Capobianco, a former managing director for Allen’s Vulcan Capital, is trying to change that by building pipelines to get wastewater out. His newly formed WaterBridge Resources aims to be a water-management company for oilfields. The firm is considering a public share listing within a year to 18 months, taking advantage of a US shale boom that the government expects will boost crude production close to 10 million B/D next year.
“Next to profitability and safety, water may well be the next most important topic for an oil company,” said Laura Capper, chief executive officer at EnergyMakers Advisory Group, an industry consultancy in Houston. “It has risen to the forefront over the last 5 years unlike anything I’ve ever seen.”