Fracking involves massive amounts of water, sand and chemicals injected at high pressure to fracture rock and release stored gas. The technique has unleashed a U.S. oil and gas boom.
The study by Ceres -- an investor group based in Boston that focuses on sustainability issues -- is based on water use data from 39,294 oil and gas wells reported to FracFocus.org from January 2011 through May 2013 and water stress indicator maps developed by the World Resources Institute.
More than 55 percent of the wells were in areas experiencing drought and more than 36 percent overlay regions experiencing groundwater depletion, Ceres said in a news release Wednesday announcing its "Hydraulic Fracturing and Water Stress: Water Demand by the Numbers" report.
"Barring stiffer water-use regulations and improved on-the-ground practices, the industry's water needs in many regions are on a collision course with other water users, especially agriculture and municipal water use," Ceres President Mindy Lubber said in the release.
"Investors and banks providing capital for hydraulic fracturing should be recognizing these water sourcing risks and pressing oil and gas companies on their strategies for dealing with them," Lubber said.
The report referred to Texas as "ground zero" for water availability risks, with fracking-related water use projected to double over the next decade. That growth comes as much of the state faces severe drought conditions.
Ceres said the state's Eagle Ford shale play had the highest water use for fracking among all shale play or basin in the country -- 19.2 billion gallons in the study's 18-month period -- and faces some of the biggest water challenges nationally.
A report in the San Antonio Express-News Wednesday cited a recent investigation by the newspaper revealing that hydraulic fracturing used more than 14 billion gallons of water in the Eagle Ford in 2012. It noted that a widely cited University of Texas at Austin study -- which it says was funded by the oil and gas industry -- had predicted hydraulic fracturing in the Eagle Ford would use a maximum of around 35,000 acre-feet of water annually.
Ceres says in its report that in 97 percent of wells in Colorado and 96 percent of wells in drought-stricken California were in regions with high or extremely high water stress.
"Groundwater is simply not as plentiful as it used to be. We now recognize many competing uses -- domestic, agricultural, for energy production and for the environment," said Jay Famiglietti, professor and director Earth System Science, Civil and Environmental Engineering, University of California, Irvine, in the release.
Ceres called on shale energy operators to disclose to regulators, investors and other stakeholders the total water volumes and sources used in each shale play, future sourcing needs as well as plans for reducing water use.