Texas Warns Wastewater Injection Threatens Permian Oil Reserves

By Charles Kennedy of OilPrice.com

The Texas General Land Office (GLO) has formally objected to a plan by Pilot Water Solutions LLC to drill three new saltwater disposal wells in the Permian Basin, warning the project could contaminate state-owned crude reserves in North America’s top oil field, according to the Dallas Morning News.

Founded in 1836, the GLO manages 13 million acres of state land and generates billions of dollars for Texas public schools through oil and gas leasing.

It argues the proposed disposal sites in Loving County near the New Mexico border pose “significant risk” to mineral interests under its control. 

Bloomberg reports that ConocoPhillips, one of the Permian’s largest producers, has joined the opposition, noting that in the area near the proposed wells it is producing less than 40% of expected oil volumes while generating nearly twice the forecast water output.

For every barrel of oil pumped in the Permian, as many as five barrels of wastewater are produced, presenting a growing operational and environmental challenge.

Reuters notes that disposal capacity is under mounting strain, with costs climbing and injection-related earthquakes drawing regulatory scrutiny.

The Railroad Commission of Texas will hold a hearing later this month to assess the Pilot Water Solutions proposal.

State officials are weighing contamination risks alongside concerns about induced seismicity linked to high-volume wastewater injection.

Environmental groups and local ranchers have long warned about the hazards of underground wastewater disposal, but record Permian output has made the problem more acute.

The GLO’s opposition is the first real indication we are seeing that water management is no longer just a peripheral environmental issue, but is now a direct threat to oil production economics in the nation’s most prolific basin.