With hydraulic fracturing, or "fracking" – the use of high pressure water to help extract previously inaccessible shale gas – eager to replicate its success outside the United States, the market for water treatment will grow nine-fold to $9 billion in 2020. This expansion will spur technology innovation and novel thinking about water disposal and reuse, but the field is rapidly growing overcrowded, creating significant risk for new entrants, according to a new report by Lux Research.

Fracking requires between 25,000 bbl to 140,000 bbl of water per well, and produces toxin-laced brine that can be more than six times as salty as the sea. Its growth has energized the water industry, inspiring a bumper crop of new water treatment startups vying to treat the highly challenging flowback water.

"Fracking represents a significant water treatment challenge -- hydrocarbons, heavy metals, scalants, microbes and salts in produced and flowback water from shale gas wells represent a water treatment challenge on par with the most difficult industrial wastewaters," says Brent Giles, Lux Research analyst and the lead author of the report titled, "Risk and Reward in the Frack Water Market."

"While the opportunity is large, only a few companies are really positioned to profit. Meanwhile, nearly every start-up we talk to is going after frack water, regardless of their technology, and many of them are going to come to grief," he adds.