HOUSTON ─ Although there is a projected 40% shortfall in water supply by 2030, oil and gas producers who rely on the resource in extraction, processing or any other part of the supply chain are already feeling the pressure from increased demand for water United States, according to William Sarni, director and practice leader, Enterprise Water Strategy and Sustainability at Deloitte Consulting LLP. “[Forty percent is] an average. There are some parts of the world that are much higher than that. Some are lower. These numbers are real, and they do impact business.”

Factors driving worldwide demand include increased population, increased economic growth, increased demand for food and energy, and the rise of the middle class, Sarni said.

Sarni participated in a water management and stewardship panel at Deloitte’s Oil and Gas Conference Nov. 18. The talk coincided with the release of a white paper on the same topic by Deloitte. Both the panel and the white paper focused on the business and economic implications of water scarcity for oil and gas.

Sarni said there is an apparent disconnect between companies acknowledging that water risk is a business risk─82% of energy companies said water scarcity is currently causing problems in direct operations, according to a 2014 water report─and­ actually integrating that risk into companies’ business strategy. Only 27% of energy companies evaluated how water could impact business over 10 years or more.

The industry has typically argued that, compared with other sectors, oil and gas simply does not use that much water. In 2000, fossil fuel extractions accounted for only 2.3% of energy-related water withdrawals. That number could grow to 4% by 2035, according to the white paper.

Still, water risk could become a much more relevant issue─and very soon─in unconventional oil and gas extraction, which uses about 10 times the water of conventional methods. According to the white paper, 38% of shale plays are in arid regions or in locations that are under high to extremely high water stress. Nineteen percent lie in regions that experience high or extremely high variability in water availability, while 15% are located in regions with high to extremely high drought severity.

“If you’re operating in these areas, you’re going to be competing for water ... with the [agriculture] sector, the domestic sector, manufacturing, recreational uses, whatever it may be,” Sarni said. “And that really changes your mindset from viewing water as a compliance issue or price issue only, to really thinking about it as a strategic resource for your business to fuel growth.”

According to the white paper, limited water availability will be a huge factor in the quest to replicate the North American shale revolution elsewhere. “It could also curtail shale production growth in the U.S. since some of the most prolific shale plays, such as the Niobrara, Permian and Eagle Ford basins, are located in areas of high water stress,” according to the paper. “Parts of the Marcellus and Utica shales are also located in areas with constrained conditions.”

The industry has already noticed the pinch.

“In particular communities, there can be a battle between having enough water to frack a well, which could be between one and six million gallons of water, and having enough water for the community,” Jon Freedman, global government affairs leader, GE Power & Water, Water & Process Technologies, said during the panel session.

Freedman emphasized the need for companies to set goals to limit water consumption. He said that GE had set a goal of reducing its own water consumption by 25% by 2015. Last year, it had reduced consumption by 46%, he said.

“How did this happen? We put in reuse technologies, processing and so forth,” Freedman said. “But the important point is, it happened because we took the time to think about it and set a goal. And I think that can happen more broadly as well, and that will address the water scarcity issues.”

Shell is also working to reduce its water footprint. The company’s NGO and stakeholder relations manager, Americas, J. Ashley Nixon, said Shell used 198 million cubic meters of freshwater in global operations last year.

“We want to bring that down, and one of the ways we can bring that down is to have water management plans for our bigger operations, particularly where water is considered to be scarce.”

Nixon highlighted several projects Shell has embarked upon to mitigate water risk. These include recycling projects in the Athabasca oil sands and in ethanol development in Brazil, as well as a water recycling and processing facility serving its unconventional gas operations near Dawson Creek, British Columbia. The company worked in tandem with the city to determine what water issues the community had, and the facility provides water not only for operations but for the community’s use as well.

Nixon also mentioned the Pearl GTL plant, the largest gas-to-liquids plant in the world, located in Qatar. The process used at the plant has been designed so that it doesn’t use any water from surrounding areas.

“What we have is a catalytic process that actually generates water,” Nixon said. “That water is captured. It’s used for steam generation. It’s used for cooling, and then it’s treated and appropriately dealt with after that.”

The panelists all agreed that even though the predictions for water shortfalls seem far off, water shortages are a problem to be dealt with now.

“It’s only a few years ago that probably many of us in this room thought of this risk as something happening in African deserts,” Nixon said. “Well, it’s in our cities, our states, our homes, and in our businesses here in North America.”