Do Unconventional Oil and Gas Wells Generate More Wastewater? A Lifespan Perspective

Abstract

The rapidly increasing oil and gas wastewater has caused widespread concerns about its adverse environmental and health effects. Using panel data of 49,050 wells from 2008 to 2016, we estimate a difference-in-difference-in-differences model to study the wastewater discharge patterns across wells’ lifespan and cohorts for unconventional wells, i.e., horizontal wells in shale formations, compared with conventional wells, i.e., vertical wells in shale or non-shale regions. Our analysis shows that since the 2010 cohort an average unconventional well has generated more wastewater than a conventional well in the initial six months of production while this gap increased in more recent well cohorts. However, the contemporaneous gap always decreased with the age of a well and reversed eventually regardless of cohorts, leading to less lifespan cumulative water discharge of an unconventional well than a conventional one. Moreover, unconventional oil wells had a lower lifespan wastewater-to-energy ratio than conventional counterparts, whereas no such efficiency difference existed among gas wells. Our findings show the trade-off between higher near-term wastewater discharge and lower lifespan cumulative generation as well as higher long-run efficiency of shale energy extraction compared with conventional energy production.