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What Hubbert Got Wrong About Peak Oil

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Oil Prices Slide On Strong Builds In Distillates

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Fracking: Oklahoma’s New F-Word

Oklahoma Earthquake Damage

Fracking in Oklahoma, as well as elsewhere, has been on the decline, thanks to the oil price slump. Quakes, however, are continuing at alarming rates. A CBC report on the situation notes anecdotal evidence that capping wells could possibly reduce seismic activity, but anecdotal evidence is insufficient.

There is a growing body of evidence that fracking, as well as traditional oil extraction to a lesser extent, can be directly linked to an increase in seismic activity. The studies that have accumulated this evidence became necessary as some of America’s biggest oil-producing regions started experiencing more than their fair – and historical – share of earthquakes.

Oklahoma has been dubbed by media the new earthquake capital of the country. Prior to 2009, the state had fairly negligible seismic activity. Then the shale boom started gathering pace, and today, the state is being shaken by an average of two quakes a day. Related: Holding 30% Of June Brent Crude Contracts, Is Glencore Manipulating Oil Prices

Before 2009, insurers in Oklahoma had no reason to make earthquake coverage part of their standard offering. Since that year, it has become a very sought-after insurance product. But supply is tightening, according to a Reuters research. Oklahoma insurers seem to be getting increasingly aware of the fact that upping the premiums for earthquake coverage (by 200% in some cases) is not sufficient to avoid substantial losses at this rate of seismic activity. They are removing this coverage from their service offering and rejecting claims for quake-caused damage, attributing it instead to houses settling or just being plain too old. Related: Oil On Track To Balance Later This Year

The state government has done its own research into the link between fracking and earthquakes. The conclusion is that there is such a link. As to what is to be done, the picture remains hazy.

Oil and gas are an anchor industry for Oklahoma. This is the state where the country’s strategic crude oil reserves are kept, at Cushing. The industry is a vital contributor to state revenues, but this may have to change. How, exactly, is a difficult question to answer but people who have had their homes damaged in some of the stronger quakes that have hit Oklahoma since 2009 believe the money and the jobs that the industry provides are not worth the constant risk of having your home fall over your head. Related: Petrobras Offloads $1.4B In Assets Amidst Political Turmoil

There is a scarier thought, however. It might be too late. There hasn’t been any definitive scientific finding supporting the suggestion that once fracking stops in an area that has experienced increased seismic activity, this activity will stop as well. On the contrary, the focus on the relation between hydraulic fracturing, which involves the injection of great quantities of pressurized liquids into the oil-bearing shale rock, is relatively recent.

Oklahoma is now addressing quake fears, and is requiring that E&Ps reduce the amount of wastewater that goes into the ground after it’s been used to release the oil and gas, by 40 percent. The effectiveness of this plan remains to be seen. On the positive side, it’s at least something. On the negative, it may well be too little too late. And oil and gas producers may have to start preparing for a tsunami of lawsuits.

By Irina Slav for Oilprice.com

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  • Bob Buhr on May 16 2016 said:
    Kind of a disappointing article. Nowhere is it mentioned that the vast majority of seismic activity associated with fracking is not with fracking itself, but with wastewater disposal. And the generalities indicating that research on fracking and seismic activity is "relatively recent" are not particularly useful--fracking in such large quantitities itself is "relatively recent," only about 12-15 years. However, the association of wastewater disposal and seismic activity is not recent at all--it goes back to the problems that arose at Rocky Mountain Arsenal in the 1960s.
  • John Bozeman on May 16 2016 said:
    Pretty much missed the point, Irina. Fracing, per se, has nothing to do with OK quakes swd is the problem and it is easily solved. more, low pressure, low volume wells spread the load and give time for the load to spread out even more. The quakes are centered around ultra high volume swds.
  • mim on May 16 2016 said:
    Fracking does not cause the earthquake increase in Oklahoma and everyone involved, whether it be scientists, government, oil companies or insurance companies knows it.

    The rock formations being targeted for drilling today, and fracking is drilling, are more than a mile below the surface typically. There have been more than 1 million oil and gas wells drilled in North America since the late 1800s and the drilling techniques haven't changed too much in the past 40 years.

    Fracking requires the use of sand and water and some chemicals pushed down miles into the rock to open up small fissures that will allow traped oil or gas to flow. Combined with technology that allowed drillers to drill horizontally, fracking has allowed oil and gas to be produced from rock formations that wouldn't have been economic prior.

    Before a new fracked well produces much oil and gas, the fracking fluid needs to come back up. Handling of this fluid at the surface had been an environmental issue when not done correctly, but now the industry has really solved this issue since they have an economic interest to do so. Much of this fracking fluid is captured and recycled on site for additional drilling by large contractors like BHI an HAL.

    However, wells in certain rock formations, such as certain Oklahoma drilling targets, produce alot of water that had previously been trapped under ground. This is salty water, sometimes called Brine, and in some cases the remnants of seas from millions of years ago.

    BRINE, AS THIS WATER CAN BE CALLED, is produced over time and removed from the oil flow and disposed of down a disposal well.

    These Disposal wells are typically privately owned and operated and are therefore very difficult to regulate or intimidate.

    THE PROBLEM:
    Many of the disposal wells go down to what scientists call the basement, which is where rock that is part of techtonic plates begins. With so much drilling in Oklahoma, both fracking and traditional drilling, producing so much more Brine, there is alot of water going down these holes. In some cases, where the basement rock is being lubricated at known faults, seismic activity such as quakes is happening.

    Not all wells have this problem and the ones that do are known to geologists and have been known well before fracking become a know word. However, since the wells are largely privately owned, the owners have rights and it is hard to prove specific causation to specific earthquakes.

    Therefore, Fracking, is not the issue. Disposal of produced water from wells is the issue. Some fracked wells produce very little water, in example. The earthquakes are an issue of regulating which disposal wells can handle how much brine and fluids and how to dispose of these fluids going forward.
  • Bruce Bullock on May 16 2016 said:
    You know an article is grossly misleading when 60 Minutes comes closer to getting it right than this author does. As the other comments indicate, it is wastewater disposal wells that are largely the problem behind the induced seismic activity.
  • hroth521 on May 17 2016 said:
    Mim,
    Thanks for an easy to understand explanation. I'm not an oil person and feel like I understand the issue much better for your comment
  • David Morgan on May 17 2016 said:
    Fracking has been going on since the 1960's. And not just in Oklahoma but all over. So, why are the quakes only in Oklahoma. It's because we have a fault in the center of the state. Why isn't TX, LA, CO, KS, ND, CA, AK not having problems with fracking?
  • Hope on May 19 2016 said:
    Fracking produces large amounts of wastewater. Disposal of that wastewater is part of fracking. Industry supporters love spin semantics.
  • Frank on May 26 2016 said:
    The problem is industry recklessness. It has an enormous amount of seismic data and knows exactly what it's doing, but will try to get away with everything it can. Some corporations (i.e., Chesapeake, Sandridge) are worse than others (Exxon, Shell) but they're all bad. They've hugely overextended themselves due to ferocious competition in the last five years, overpaid for leases, borrowed to the hilt, so their desperation produces even more irresponsibility.

    They know exactly what they're doing when they induce seismicity. It doesn't matter to them. Buying politicians (i.e., governors Fallin, Brownback) is much cheaper than operating relatively safely.

    The astronomical increase in earthquakes in Oklahoma and Kansas has been caused mostly by high volume, high pressure injection wells, but the fracking process itself can't be ruled out. Most of the quakes have epicenters close to fracked wells, and the vast majority in those two states occur at the same depth as the horizontal drilled extensions: 3.1 mi/5 km

    Earthquake insurance is near-worthless. A neighbor passed along a comment she'd heard. "If your house is badly damaged, you're better off throwing a match into it and letting it burn, because fire insurance will cover it more thoroughly.
  • Jack Wolf on May 29 2016 said:
    Funny how all the quakes started with fracking, and now that the government has stepped in, how they've stopped. My mailbox used to be stuffed with USGS alerts... Now, none.
  • Howard Jacobs on June 03 2016 said:
    The article and some of the comments have this wrong. The quakes are being caused by a huge increase in process water (not wastewater) injected into the Arbuckle. This large amount of process water is a direct result of the development in the Mississippi Lime Play. The Miss has huge cuts of water, 100 barrels of oil- 2000 barrels of water, compared to even cuts in a lot of formations. Normally this formation would be uneconomical but with the recent (2011-2013) $100 oil and easy money, companies "tried" to make it economical. The companies working in this formation did what they always have done, inject it into the Arbuckle. Now oil is lower, drilling is lower, injection is lower, and the regulators finally have good science to backup new rules. I hope the author will update us on the amount of earthquakes this year. I've heard they are down +50%. The free market and a little tighter regulation on injection wells will solve this problem.--Also, most of the companies that work in this area are in bankruptcy.
  • Jack Houston on June 05 2016 said:
    It is next to impossible to determine who is truthful and who isn't. The common denominator is that earthquakes are associated with fracking. Burning fossil fuels accelerates global warming. The proper response to this is evident.
  • Bob B on June 11 2016 said:
    The strange thing is these quakes may actually be a good thing, in that the rock stress is a result of built up stress along old locked faults. These stresses eventually release, and without the lubricating effect of waste water injection, the magnitude of the earthquakes would be enormously more destructive, if infrequent.
  • jethro on September 05 2016 said:
    it matters not that the direct cause is waste water because they correlate perfectly along with the method. fracking and injecting wastewater are necessary parts of the whole process, and i assume run by the same company.

    the rise in earthquakes is because of fracking. insurance, inventory, labor, and housing costs will change as a result of the relatively high risk of a quake.

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