(The Center Square) – The Texas oil and natural gas industry has a solution to help with Texas’ water crisis, Texas Railroad Commission Chairman Jim Wright says.
During his tenure, the Railroad Commission issued a framework for a pilot program using recycled produced water. Texas oil and natural gas companies in the Permian Basin are producing 5.5 million barrels of oil a day and 25 million barrels of water used to pump it. There are 42 gallons in a barrel.
“The industry has invested in technology to recycle produced water. I’m very proud that they’re doing that,” Wright said at a recent townhall meeting in Goliad, Texas, led by judges addressing a regional water crisis. “The oil and gas industry is one of our answers to our fresh water sources that we’re running out of,” he said.
As a result, six pilot programs have been operating for three years, which doubled crop capacity and natural vegetation and ranchers have been able to run more cows, he said.
“Produced water is a byproduct of what comes to the surface during oil and gas production, and the produced water recycling framework will provide a regulatory pathway for operators to assess the effectiveness and the suitability of applying treated produced water for beneficial purposes,” the RCC said when announcing the pilot program. “Ultimately, the potential exists to reduce the amount of produced water that gets injected back into the ground, which can help reduce incidents of seismicity, as well as developing a potential water source for above ground use.”
RRC Executive Director Wei Wang said the new framework “opens up the potential to use treated produced water in ways that have never been seen before in Texas, which is a win-win for conserving water resources, and protecting the environment and Texans.”
The Texas Commission on Environmental Quality is now overseeing the pilot program and has not expanded it.
In 2021, the Texas legislature established the Texas Produced Water Consortium to study the feasibility of using produced water. “Excess produced water volumes from unconventional wells in the Permian Basin could provide a significant new source of water if pilot projects can prove that the water can be treated economically and to a quality that is protective of public health and the environment,” it reported in 2022.
“The potential for treating produced water could lead to an estimated 2 billion barrels per year (~256,000 ac-ft) of treated produced water, and as high as 4 billion barrels per year (~511,000 ac-ft) that could be available for beneficial use outside of oil and gas operations, depending on treatment capabilities and recovery rates. When compared to projected future shortages for this region, the impact could be significant,” it said.
By 2024, it had developed a water market overview of the Permian Basin including an economic analysis of market value of freshwater forecasted to 2050. Average agricultural water use in the region accounts for 75% of total water use with remaining water usage split between municipal and industrial sectors.
Wright also noted that the economic success of rural communities has come from the energy industry. “If you don’t have the oil and gas industry you don’t really have a community,” he said.
The Texas oil and natural gas industry is a major economic driver for local communities and the state economy. In 2025, the industry paid $27 billion in state and local taxes and state royalties, the second highest paid in state history, The Center Square reported.
Since 2007, the industry has paid more than a quarter of a trillion dollars in state and local taxes and state royalties primarily going to the Permanent University Fund, Permanent School Fund, Texas’s Rainy Day Fund and State Highway Fund.
Last year, Texas school districts received $2.6 billion and county governments received $1 billion in property taxes paid from mineral properties producing oil and natural gas and pipeline and gas utility companies, The Center Square reported.
Texas counties and school districts that received an economic windfall are located in two major oil producing regions, the Permian Basin (61 counties) and Eagle Ford Shale (27 counties). Taxes the industry paid accounted for nearly all of the county and public school district tax base in dozens of counties.
The greater Permian Basin accounts for nearly 40% of all oil produced in the United States and nearly 15% of domestic natural gas production, according to Federal Reserve Bank of Dallas data.
“We have to keep industry” in rural areas facing water shortages, Wright said. “To keep industry you have to stay competitive. Unfortunately, we’re at a huge disadvantage compared to Houston and Louisiana that get more rain.”
“It’s imperative that we find sources of water that we can use that will be an economic solution. Because the more you pull on the aquifers and these water wells that everybody’s talking about, the worse it’s going to get. We’ve got to start looking outside the box. The oil and gas industry technology is there.”
