By Irina Slav – Dec 29, 2025, 7:00 PM CST
- The Permian basin’s massive oil production from hydraulic fracturing generates huge amounts of wastewater, and the industry is running out of safe places to dispose of it.
- The Texas Railroad Commission has restricted new disposal wells due to widespread increases in reservoir pressure, leading to drilling hazards, ground deformation, and seismic activity.
- Potential solutions, such as treating the water for release into rivers, face regulatory hurdles and would add significant, unwelcome costs to producers operating below $60 per barrel West Texas Intermediate.
The Permian Basin is the largest contributor to U.S. oil production, accounting for nearly half of total production in both 2024 and 2025. But success comes at a price, and in the Permian’s case, the price is huge amounts of wastewater—and the industry is running out of places to store it.
Hydraulic fracturing, which is the dominant way of extracting oil in the Permian, is a water-intensive process. Fracking involves injecting chemicals and sand into the horizontal well to open up the oil-bearing rock and keep it open. The longer the laterals got, the more water needed to be injected. This water, which is mixed with chemicals, then gets disposed of in special wells. But there are too many of those, and they are overflowing, according to reports.
The first signs of serious trouble emerged earlier this year, when the Texas Railroad Commission sent out notices to companies applying for licenses for wastewater disposal wells in the basin, stating that there were ground pressure issues caused by wastewater disposal. The number of new ones was to be restricted.
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Wastewater disposal, the Railroad Commission wrote in the letters sent out in May, “has resulted in widespread increases in reservoir pressure that may not be in the public interest and may harm mineral and freshwater resources in Texas.” The RRC added that “Drilling hazards, hydrocarbon production losses, uncontrolled flows, ground surface deformation, and seismic activity have been observed.”
It is difficult to find a solution to this problem without compromising oil production, and while local communities may not have a big problem with that, the industry will. So decision-makers in relevant positions are considering options. One of these, per a recent Bloomberg report, is releasing the water—after treating it—into local rivers.
The report cited regulatory filings concerning the issue of permits to energy companies to treat their wastewater and then release it into the Pecos River near New Mexico. Texas Pacific Land Corp. and NGL Energy Partners were two of the companies named as potential receivers of such a permit. At least one of these could be awarded by the end of March 2026, the Bloomberg report also said, citing Texas Pacific Land Corp.
If the wastewater problem is to be solved, however, more such permits would be needed—unless opposition to them emerges and spreads.