I still don’t get it...

EDIT: the first paragraph in the linked article was very insightful

Purdue University researchers have developed a process to remove nearly all traces of oil in produced water.

https://en.wikipedia.org/wiki/Produced_water may help?

That seems like an overly flowery term. Why not use "oil well wastewater" that a layman would understand immediately.

That doesn't help before you open the comments section though.

It may be helpful to quote "produced water" as it is a confusing and unfamiliar term for those outside of the industry.

I think it's fair to say that it's outright misleading - the water is not produced in any reasonable sense of the word.

I get how it may be misleading, and given that produced water should be in quotes to mark it as an industry term, it is still the only useful term for said water. Within the industry it is very well defined and easily understood. If you use another term like "obtained water" it would be up to interpretation by each individual including industry individuals. It's like contract law, they figured out a while ago that when dealing with technical issues, technical words should be used and taken to have their normal industry meaning, otherwise it breeds more confusion.