Scott Mitchell, CEO of Texan water management company, Deep Blue, discusses the company’s key role in the provision of sustainable water infrastructure for North America’s oil and gas industry and its deep commitment to customers.
SUSTAINABILITY RUNS DEEP
“One of the biggest challenges facing the oil and gas industry in North America today is fighting the misperception that these resources cannot be produced or used in a sustainable or environmentally responsible way – they can.”
The opening words of Scott Mitchell, CEO of sustainable water management company, Deep Blue, convey his passion for sustainable oil and gas exploration and production.
Due to this common misperception, as outlined by Mitchell, it has become increasingly difficult for the industry as a whole to attract capital, whilst necessary and reasonable regulatory changes have added costs and created considerable complications.
At the same time, the constant evolution of various obstacles means companies must also find ways to tap into previously inaccessible or costly natural resources, whilst solving both logistical and supply chain issues to be able to make advances in the field.
“That being said, these challenges are also part of the excitement and fuel a ‘can-do’ spirit across the industry,” Mitchell continues.
Thus, as energy demands continue to rapidly increase across the country, companies such as Deep Blue are well-placed to adapt and progress just as quickly, sustaining oil and gas as the dominant force in today’s energy mix despite potential challenges.
Furthermore, Mitchell attributes Deep Blue’s ability to keep pace with industry as a major contributor to it being able to usher in many technological advancements over the years – with more on the horizon.
“We’re seeing rapid improvements in making oil and gas production more sustainable and environmentally responsible, especially through innovative water management solutions,” he excites.
RELIABLE AND COMPREHENSIVE SERVICES
As a company that specializes in providing comprehensive water management solutions for exploration and production (E&P) companies, Deep Blue has witnessed the demand for oil and gas skyrocket over the past few decades.
“The industry needs a reliable, large-scale, integrated water infrastructure network to keep pace with demand, which is where we come in,” Mitchell affirms.
Although water may not be the first thing one pictures when thinking of oil and gas production, naturally occurring, highly saline water – known as produced water – is, in fact, of the utmost importance.
Unlike water from an aquifer, produced water must be processed before being reused. As such, Deep Blue handles the entirety of the water cycle, starting with the collection of produced water through its extensive network of pipelines, which span over 1,000 miles.
“On a typical day, we gather around one million barrels of water,” Mitchell tells us.
Water is also imperative for new well completion processes, allowing oil to flow. Only after Deep Blue treats and recycles the produced water is it suitable for reuse in such completion operations. With facilities able to treat and recycle roughly 600,000 barrels per day (bpd), the company recycles enough water to fill the equivalent of 38 Olympic-sized swimming pools.
“We also offer disposal services through our network of over 100 saltwater disposal wells for any water that can’t be reused.”
In addition, the company is at the forefront of developing new technologies such as desalination and enhanced evaporation to promote sustainable water reuse and disposal.
POISED FOR CONTINUED GROWTH
Deep Blue’s customers are primarily E&P companies in the resource-rich Midland Basin – one of the most prolific oil-producing regions in the world.
Its largest customer is leading independent oil and natural gas company, Diamondback Energy (Diamondback), thanks to a recent joint venture (JV) through which the business acquired its water assets.
“Since forming this partnership in September 2023, we’ve experienced rapid growth, adding more than a dozen new clients and increasing our commercial volumes by over 200,000 bpd,” Mitchell informs.
For the most part, when adding a new customer or an existing client commits to a new area for produced water takeaway, they become part of a long-term service contract typically lasting more than a decade. As such, Deep Blue is poised for continued growth as more companies seek to join its system.
By focusing solely on operations in the Midland Basin, the company delivers the most reliable and comprehensive service tailored specifically to this highly productive area, supplemented by its deep local expertise and extensive infrastructure to ensure it continues to meet the unique needs of its customers in this critical region.
AN EFFICIENT OPERATION
Data lies at the heart of Deep Blue’s operations, with huge amounts of information managed every day to ensure its activities run as efficiently as possible.
“Thousands of measurement meters continuously monitor water volumes and flow rates through the inlets and outlets of our pipelines, ponds, treatment facilities, and disposal sites,” Mitchell outlines.
In addition, hundreds of meters keep a close eye on Deep Blue’s water quality specifications, whilst it gathers subsurface geologic and pressure data from its disposal wells.
On top of this, the company integrates its customers’ volume forecasts to meet the takeaway needs of both completion and produced water.
“Operating our business efficiently means flawlessly aligning our systems, operations, and water volumes with customer requirements,” he elaborates.
As such, on the supply side, the company needs to deliver the right water to the right customer at the right time and place.
In terms of takeaway, it must also be ready with new pipelines and enough capacity to take on customers’ water as soon as their wells begin production.
Therefore, Deep Blue is currently building out a real-time optimization program that will integrate its field measurements and customer forecasts.
The system will allow the company to forecast operations where necessary to pair its water supply or capacity with customers’ needs, whether this be treatment, transportation, or disposal. The program will also suggest optimal supply routes through the lowest cost segments of its system.
“We are excited about the system’s cutting-edge control center, where we’ll manage and crunch all the data in real time. We’ll also be able to run some operations remotely through the center,” Mitchell reveals.
As it continues to refine this data-driven approach, Deep Blue’s customers will see significant benefits, including lower costs and exceptional reliability and readiness.
ONGOING INNOVATION
With multiple exciting and innovative projects underway, Deep Blue continues to provide the industry with advancements.
For example, one ongoing project demonstrates the company’s ability to provide recycled water for simultaneous well completion.
Historically, most water systems only provide enough recycled water for a single well completion. However, a rise in recent technological advances means completion operations must now be able to complete two wells at the same time – also known as simultaneous fracking (simulfrac).
A considerable sustainable advancement for the industry, simulfracs are highly efficient for E&P companies but demand greatervolumes of water over shorter periods of time, which requires a massive orchestration of treatment, storage, transportation, and labor.
“In fact, thanks to the growth of simulfracs, water requirements have gone from 130,000 bpd to over 200,000 bpd per well completion crew,” Mitchell explains.
This is where Deep Blue comes in to help companies meet their development targets, having recently successfully provided recycled water for not just two, but six simultaneous well completions in the same area.
“This particular project required a significant amount of water across multiple facilities and crews – five million barrels of in-ground storage, 20 people across five treatment facilities, and 12 people across six water transportation crews,” he details.
As a result, Deep Blue was able to deliver nearly 600,000 bpd for this assignment – the equivalent of 25 million gallons per day (gpd) 24/7 for 20 days.
“These numbers help illustrate the scale of what we are accomplishing in every single project.”
In addition, Deep Blue has been working on another exciting recycling endeavor over the last year, in which it has collaborated with Premier Equipment to design and deploy new flotation cell technology.
Traditionally, generic equipment for recycled water is only capable of treating around 20,000 bpd per facility, despite the majority of completions today often requiring hundreds of thousands of bpd.
Deep Blue’s new flotation cell can pre-treat up to 100,000 bpd with no increase in the amount of land required – five times the number of typical methods.
“Our initial unit has now been running for six months, and based on its success, we anticipate adding another unit this year,” Mitchell discloses.
Should this technology be deployed across the entire Deep Blue system, it has the potential to drastically increase recycling volumes by reducing the time and space required for recycled water and eliminating the need for high-cost facilities such as above-ground storage tanks.
“Projects like these are why we got involved in the industry; we want to enhance sustainability while improving efficiency and introducing cost savings,” he enthuses.
SUSTAINABLE SOLUTIONS
As a company deeply committed to maintaining ongoing, reliable water management in the Midland Basin, sustainability is deeply embedded in Deep Blue’s ethos.
Given the oil and gas industry’s historical reliance on fresh and brackish aquifers and subsurface water injections, the company recognizes a growing need for more sustainable methods to ease pressures on the region’s water resources.
“Right now, we run the largest commercial recycling system in the Midland Basin, processing up to 25 million gpd of water, which reduces our dependence on aquifers and eliminates the need for water disposal, positioning us as a leader in sustainable practices.”
Moreover, Deep Blue has plans to expand its sustainable capabilities in the coming months.
“We’re currently exploring innovative techniques, such as enhanced evaporation, to further minimize our environmental impact,” he states.
As such, the company recently began field testing EcoVAP Evaporative Matrix technology, which can evaporate up to 60 times more water when compared to traditional methods used on ponds of the same size.
As this technology returns water to the hydrologic cycle in the form of water vapor, it significantly reduces the amount of water requiring disposal, which is especially useful in areas where injection-based disposal proves more challenging.
DESALINATION DEVELOPMENTS
Deep Blue is also pushing the boundaries of recycling with desalination, which involves treating water so it can be reused beyond the oil and gas industry.
Trusted engineering, construction, and project management company, Bechtel Energy, recently launched a Low Energy Ejector Desalination System (LEEDS) to assist customers in advancing their environmental goals whilst preserving precious water resources.
Its recent partnership with Deep Blue, which saw it pilot LEEDS in the Midland Basin, promises a feasible, accessible, and sustainable desalination solution.
Results from Deep Blue’s initial field tests of LEEDS are promising, with the thermal desalination technology capable of turning highly saline, produced water – three to four times as salty as the ocean – into reusable, clean water.
“Simply put, we are taking a waste product from miles below the surface and turning it into fresh water,” Mitchell observes.
Once fresh water has been successfully generated, it can be used to supplement or displace fresh water used in many industrial, municipal, or agricultural processes.
This is an exciting, longer-term solution, but one that will take years to build and integrate at full scale across Deep Blue’s existing system.
“We’re proud and excited about our sustainable initiatives and are confident they’ll play a key role in the future of water management – not just for us, but for the entire industry,” he prides.
“We’re proud and excited about our sustainable initiatives and are confident they’ll play a key role in the future of water management – not just for us, but for the entire industry”
Scott Mitchell, CEO, Deep Blue
OWNER OPERATOR
Both owning and operating its integrated midstream water infrastructure provides Deep Blue with a distinct advantage in today’s rapidly evolving energy landscape.
As the industry has grown, scale and flexibility have become more important than ever.
“We’ve seen a major increase in demand from E&P companies for water supply and takeaway services. Meeting this demand requires infrastructure that’s both robust and adaptable – something smaller systems often struggle to deliver,” Mitchell reports.
As such, smaller E&P-owned commercial systems are beginning to struggle to keep pace, often lacking the capacity and integration needed to handle today’s development practices, leading to constraints on water management.
What sets Deep Blue apart in this sense is its scale. By consolidating smaller systems into its large, integrated network, the company is able to offer more reliable and flexible services at a lower cost.
“Our extensive network allows us to quickly adjust to changing demands, ensuring water services are delivered exactly when and where they’re needed,” Mitchell confirms.
This not only gives Deep Blue’s customers confidence that their needs will be met but also frees them up to focus on their core business.
“Our integrated approach positions us to meet the industry’s increasingly complex needs more effectively. We’re committed to providing a top-notch service while keeping costs down – a clear advantage that helps our customers succeed and remain competitive in the market.”
PROGRESSIVE PARTNERSHIPS
In addition to the independent operation of its Midland Basin infrastructure, Deep Blue is also supported and driven by strong partnerships, which are ultimately considered to be the backbone of the company’s success.
Deep Blue stands on three pillars: strong management, the right strategy, and key partners – such as its ongoing relationships with Five Point Energy and Diamondback.
A leading private equity firm focused on building businesses within the environmental water management and sustainable infrastructure sectors, Five Point Energy brings deep knowledge of energy, midstream, and water management to the table, as well as a proven track record of success and commitment within the Permian Basin.
“Five Point Energy’s reputation for reliability speaks volumes,” Mitchell reflects.
As for Diamondback, a proven dynamic leader amongst large E&P companies, it has supported Deep Blue by providing water assets as part of the 2023 JV, whilst it continues to contribute water volume to the company’s system in the long term.
“This contribution allowed us to start on a significant scale and continues to confirm our efficiency and reliability to others,” Mitchell divulges.
Further to Deep Blue’s historical and ongoing partnerships, the company continues to make new acquisitions, such as that of Lagoon Water Management’s system.
Having been built recently, the system sits beside Deep Blue’s in one of the busiest parts of the Midland Basin. When Deep Blue acquired the lagoon at the end of May 2024, it was able to expand its network by over 100 miles as a result, including water gathering and delivery pipelines alongside other valuable assets.
“This move didn’t just broaden our reach – it brought in new customers and deepened our relationships with current ones,” Mitchell recalls.
By boosting capacity, reliability, and flexibility as it has done with the Lagoon acquisition in this critical area, Deep Blue has been able to elevate and expand its service offerings.
FUTURE REFLECTIONS
Looking to the future, Deep Blue regards its continued growth through a specific lens – to inform its priorities, goals, and targets, the company contemplates how best to serve customers and move forward sustainably, thus allowing it to serve more people.
“We always want to improve our services, add more customers, and expand our relationship with them,” Mitchell imparts.
Deep Blue sets out to achieve this by increasing its recycling capacity, saving costs through improved efficiency, and deploying new, proven technologies, all of which simultaneously enhance sustainability.
As such, the company carefully selects priorities that work together in a cycle of continuous improvement. For instance, growing the business adds water and capacity to the system which, in turn, makes the company more reliable, flexible, and cost-effective for customers.
“Our results attract more customers, and the cycle continues to build upon itself,” he claims.
In terms of overall goals, Deep Blue’s is simple: to create long-term value by addressing the growing demand for efficient and reliable water management.
As water continues to be a critical resource for every industry across the US and beyond, Deep Blue leads the charge in delivering innovative, sustainable solutions.
“We’re not just another water management company – we develop, own, and operate integrated midstream water infrastructure networks specifically designed to meet our customers’ evolving needs.”
At Deep Blue, water management is about more than just infrastructure – it’s about innovation.
The company is continually developing advanced technologies, from desalination to enhanced evaporation, to promote sustainable water reuse and disposal, technologies designed with unique features to ensure their effectiveness and sustainability.
In this way, Deep Blue’s customers gain access to unparalleled expertise, cutting-edge infrastructure, and a relentless commitment to sustainability and efficiency.
“As industries evolve and water becomes even more critical, we’re here to ensure our customers are aligned with the right partner for the future and that they thrive,” Mitchell concludes.
DEEP BLUE PARTNERS
