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Huge Increase In Quakes A Game-Changer For Oklahoma Oil & Gas

Huge Increase In Quakes A Game-Changer For Oklahoma Oil & Gas

The recent spike in earthquakes in Oklahoma could present a “game changer” for regulators.

That is how regulators themselves described the spate of earthquakes that struck the state between June 17 and June 24, according to Reuters. Oklahoma has become the most seismically active state in the country in recent years, with a lot of scientific data pointing to the practice of disposal wells as the culprit. Earthquakes with a magnitude of 3.0 or greater have jumped from 20 in 2009, to 585 in 2014. But 2015 could be even worse – if current trends continue, the state could log more than 800 for the year.

The rapid increase in seismic activity prompted new regulations, after a long period of hesitation on behalf of the state, which took effect two months ago. The rules barred drillers from injecting wastewater past a certain depth underground, a threshold that seismologists believe contributes to earthquakes. Related: Top Three Rebound Stocks In The Permian Shale

But even with those rules in place, earthquakes have not stopped. Over the past week, an estimated 35 earthquakes of a magnitude of 3.0 or greater struck the state.

That has the Oklahoma Corporation Commission, which regulates oil and gas drilling, looking again at regulations. “We have to approach it anew,” an OCC spokesman, Matt Skinner, said after the latest round of quakes, according to Reuters. “There's been a huge increase. That's a game-changer.”

The surge in earthquakes over the past week comes as a June 23 report from E&E that showed that the University of Oklahoma sought a $25 million donation from famed oil executive Harold Hamm, head of Continental Resources. The university pursued his donation as it was also establishing its position on the connection between earthquakes and disposal wells. When completed, their position reflected Hamm’s pretty closely, although he ultimately declined to donate (he is still one of the university’s largest donors). E&E notes that there is nothing specifically linking the donation to the university’s position, but they took place at the same time. Related: How Driverless Cars Will Upend Energy Markets

The skeptical approach the university took to earthquakes may have delayed action. The news comes after months of speculation that the Oklahoma Geological Survey, which is part of the university, sat on seismology data that linked disposal wells to the rise in earthquakes over concerns that it would affect the state’s top industry. Oil and gas account for 7 percent of Oklahoma’s state revenues. There has even been speculation that seismologists were pressured into downplaying the connection.

The rate of earthquakes has become too hard to ignore. In April 2015, the Oklahoma Geological Survey took a much stronger position on earthquakes, saying that it “considers it very likely” that much of the uptick in seismic activity is caused by disposal wells. The state government even launched a website with data and information on how disposal wells are contributing to quakes. Related: China’s Energy Demand May Not Increase Until 2017

But the latest round of earthquakes suggest that the state is still not moving forcefully enough despite new regulations this year. For now, the state has not opted for a moratorium on disposal wells in sensitive areas, as other states have done. Regulators at the OCC had hoped that its light touch would help reduce the frequency of earthquakes over time, and meanwhile, it could gather more data. That approach may not be sufficient. But there is not a lot of appetite within the legislature to kill the goose that lays the golden eggs.

On the other hand, if there is a larger catastrophe, the state would have no choice but to finally crack down.

“If there is damage and loss of life, you will see the political climate absolutely change overnight,” cautioned Jason Murphey, a Republican representative in the state legislature, according to Reuters. “When and if that happens, you will have a cloud that hangs over the energy sector for the rest of our lives.”

By Nick Cunningham of Oilprice.com

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  • Rick Thurman on June 28 2015 said:
    Oklahoma has a variety of energy resources beyond fossil fuels. The oil, gas and coal industries have technology and management skills that can be profitably applied beyond finding hydrocarbons to burn. Once you accept the need to do what we can to reduce the damage that's coming from GHG-induced global warming, you can start the search for ways to build an energy-abundant future based on sustainable energy sources.
    OK already has a wind industry that can grow much larger, and solar farms could generate power alongside many of those wind farms. The natural gas industry can apply what it knows about underground gas storage to managing Compressed Air Energy Storage (CAES) as that field develops. I'm not aware of any earthquake problems in the history of underground gas storage, as compared to today's fracking wastewater disposal wells.
    Given the huge resources available in wind and solar worldwide, and the widespread number of regions where CAES could be deployed, their employment and investment opportunities may well overwhelm even traditional oil, gas and coal. Those profits and jobs will be enjoyed the most in areas that have the foresight to develop the skills and are able to deploy them anywhere on the planet.
  • ROBERT DEL ROSSO on July 01 2015 said:
    The increase in earthquakes in Oklahoma has not been caused by Global Warming, but it shows how much in denial people are in when it comes to the impact humans are having on the Planet. And why it is not “arrogant”, as Governor Jeb Bush says, to admit we ARE having an impact on the Planet.

    As Jon Stewart pointed out on the Daily Show, April 23, 2015: playing a clip from the TV news which reported “that State [ Oklahoma ] shook with nearly 600 quakes last year [ 2014 ] more than any other state in the country”.

    The TV news then told us: “Prior to 2008, Oklahoma averaged 1 to 2 quakes per year of Magnitude 3 or greater. In 2015, it’s averaged TWO PER DAY”. (If my cell phone’s calculator I correct, that means if I extrapolate, Oklahoma could see the number or earthquakes in 2015 reach 2 x 365, or 730 quakes this year up from only TWO per year prior to 2008, an increase of 364 per cent!)

    And now I see my "extrapolation" was TOO LOW!

    And then Stewart plays this incredible clip from Oklahoma’s Channel 2 TV:

    “One day after the Oklahoma Geological Survey reports that it is very likely that oil and gas waste water disposal wells triggered the recent Earthquakes, [Oklahoma] House lawmakers approved a Bill that keeps cities and towns from regulating oil and natural gas drilling operations.”
    (http://thedailyshow.cc.com/full-episodes/ogafvo/april-23--2015---neil-degrasse-tyson)
    (At 4:24 on the video.)

    German Auto maker Audi has developed a way to recycle Carbon Dioxide in the air to make "Blue Diesel", in a process that is "Carbon Neutral". Our Oil companies and/or our Car companies need to license that tech from Audi -NOW! Paying Audi a royalty would be cheaper than getting oil out of the ground.

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