A shale oil producer has started using treated water from toilets, sinks and showers to carry out fracking in Texas.
The process of fracking requires millions of gallons of water, along with sand and chemicals, to be blasted into a well to crack oil or gas-containing rocks and allow the fuels to escape. Water bills can account for up to 10 per cent of the cost of fracking a well, according to consulting firm IHS.
In a bid to cut costs, Pioneer Natural Resources has signed an 11-year, $117m deal with the city of Odessa, Texas, for access to treated municipal wastewater for use in oilfields roughly 20 miles away.
Construction has started on a pipeline network that will transport the treated water from the city's sewage plant to one of Pioneer's facilities and these water deliveries are expected to begin by the end of 2015.
President of Pioneer's water management group Stephen McNair said Pioneer's goal is to eliminate entirely the use of fresh water in fracking within five to 10 years.
The reclaimed water comes from sewage plants that treat human waste and water from showers and sinks and the city's officials say the deal will provide a steady stream of revenue for the local administration and reduces truck traffic.
"We didn't think we were making our highest and best use of our effluent water, we were using a lot for irrigation," said Larry Long, the Odessa city attorney who helped to negotiate the deal with Pioneer.
"We thought it had more value going to the oil companies," he said, noting that it would allow potable water currently going to the oil fields to be put to other uses.
Pioneer is not the only fracking firm investigating the use of waste water, with many companies looking to cut costs as oil prices slump.
Alpha Reclaim, owned by BNN Energy, has dealings or contracts with about 30 cities in Texas to supply reclaimed water to oil companies and a spokesman for Anadarko Petroleum said the company uses treated water purchased from the city of Aurora in Colorado.
EOG Resources, which has wells in the Eagle Ford formation in South Texas, is considering using water from wastewater treatment plants, according to its web site.