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Record Earthquake Threatens Oil And Gas Industry In Oklahoma

Oklahoma Quake

A 5.6-magnitude earthquake shook Oklahoma this past weekend, enough to rank it as among one of the state’s most powerful on record. The earthquake, which took place just northwest of Tulsa on September 3, could shake more than just houses and buildings in the region – the latest tremor could upend one of Oklahoma’s most important industries.

Oklahoma is not traditionally known as one of the country’s most seismically active areas, but the frequency of earthquakes has skyrocketed in recent years. Last year, Oklahoma recorded 2,500 earthquakes with a magnitude of 2.5 or greater. That is up dramatically from just three quakes of that size recorded in 2005.

Seismologists are increasingly convinced that the culprit is the wastewater wells used in hydraulic fracturing. When oil and gas drillers frack a well, the wastewater that is left over is injected into disposal wells at high pressure. That is thought to contribute to the slipping of fault lines, increasing the likelihood of an earthquake.

The U.S. Geological Survey said that it would look into the specifics of the latest earthquake, but most believe that disposal wells could be singled out. “Without studying the specifics of the wastewater injection and oil and gas production in this area, the USGS cannot currently conclude whether or not this particular earthquake was caused by industrial-related, human activities,” the USGS said in a statement. “However, we do know that many earthquakes in Oklahoma have been triggered by wastewater fluid injection.”

The increase in the frequency of earthquakes has climbed in corresponding fashion with the rise of fracking in the state. For years, state regulators were reluctant to get involved, convinced by industry captains that they were doing all that they could to minimize the side effects of drilling. After all, oil and gas production has been a cornerstone of the Oklahoma economy for a long time. Related: How Uncertainty In Uzbekistan Threatens China’s Energy Security

But the tremors became too difficult to ignore and the state has slowly begun to put restrictions on industry players, with tougher oversight always coming shortly after the state is rocked by another quake. There are some 35,000 disposal wells in the state, according to Bloomberg, and state regulators have been putting restrictions on operators for more than a year. But the record-tying quake from a few days ago could spark a tighter crack down on disposal wells, which could slow the pace of drilling in Oklahoma.

Oklahoma’s Governor Mary Fallin, a Republican, declared a state of emergency after the latest incident. Regulators ordered drillers controlling 37 disposal wells to immediately shut down after Saturday’s earthquake. It was the first time that the state issued a mandatory order and the industry is watching closely to see if broader action is forthcoming.

“They are going to push the industry to come up with some permanent solutions,” said Michael Lynch, president of Strategic Energy & Economic Research Inc., in an interview with Bloomberg. “It’s hard to believe Oklahoma would move to ban fracking, but I can see where they would say to people that they have to do something else with the wastewater, which is believed to be the source of the increase in earthquakes.” Related: Transportation Sector Under Threat From Amazon

The Oklahoma Independent Petroleum Association told The Wall Street Journal that the state’s response could have a negative impact on oil and gas production. But so far the crackdown on drillers in the vicinity of the earthquake will not necessarily affect the more prolific oil and gas plays in the state, such as the SCOOP and STACK. The only publicly-traded company affected by the state’s mandatory shutdown was PetroQuest Energy Inc. The more well-known drillers in Oklahoma, such as Continental Resources and Devon Energy, likely won’t be impacted at the moment.

“You might see a little bit of a pause” in drilling following the state’s response, Michael Lynch told Bloomberg. “The first step will be restricting the wastewater wells, particularly the ones that seem to be causing the most harm.”

By Nick Cunningham of Oilprice.com

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  • Randy Verret on September 06 2016 said:
    A couple points of clarification (here) appear in order. First, the VAST majority of fluid injected into wastewater wells, better known as saltwater disposal (SWD) wells is produced water from active oil & gas wells. Oil & gas formations produce water and that "water cut" increases over the productive life of the well. On a frac job, a sizeable percentage of the fluid stays in the formation and in many areas, much of the fluid is recycled (anyway). As a result, most of the water being disposed underground in this industry is NOT frac fluid so I'd say mention of fracking in this case is both premature and potentially misleading.

    As to the regulatory structure, I've never worked in Oklahoma, so I'm not sure about their specific downhole injection permitting. However, the disposal of oil & gas..."produced water" is regulated by the Clean Water Act. Most states adhere to an Underground Injection Control (UIC) program that they administer under these federal guidelines. Some states have primacy and implement their own programs which often have more stringent regulations while others follow EPA rules. In any event, this is far from a "lightly" regulated endeavor. LOTS of requirements. I'd just suggest everyone "hold their fire" until the USGS & Oklahoma authorities get all the facts weighed in and reach educated conclusions...
  • BrentDenver on September 07 2016 said:
    Water injection is occurring at a depth of 1 mile, the earthquake occurred at a depth of 6.5 miles. What happens when you stop injecting water and the earthquakes keep happening? This is not science, this is a wild ass guess or a WAG. Techtronic forces build up over time and eventually cause multiple earthquakes. Earth's plates are still shifting. This is the real science.
  • BrentDenver on September 07 2016 said:
    Misleading: The picture you are using is a canyon with trees growing in it, not a recent picture of a new surface fault in Oklahoma.
  • Harold Asmis on September 07 2016 said:
    You might want to check how long they keep those wells closed after an earthquake.
  • GV OIL MAN on September 07 2016 said:
    Mr. Verret, I humbly recommend you researching a subject which has become known as "The Halliburton Loophole". I am certain you'll find the information eye opening. https://en.wikipedia.org/wiki/Energy_Policy_Act_of_2005
  • Randy Verret on September 08 2016 said:
    GV Oil Man, I hate to break the news but the so called "Halliburton Loophole" is not applicable (here). Like many in the media & many environmental activists, you are confusing the UIC program which was set-up under the Clean Water Act as a special exception for underground injection in oil & gas operations with fracing. Fracing is not considered an injection operation under the disposal regulations as much of the fluid remains in the formation & the rest is a flowback component. Different operational animal. As such, fracing was not included in the UIC regulations. However, each individual State has it's own guidelines for fracing, but I can assure you fracing is heavily regulated. So, the exemption under the Energy Policy Act of 2005 does not create any loophole at all, it's just covered under a different set of regulations. If you don't believe me, fine, then go out on the Texas Railroad Commission, N. Dakota Industrial Commission or any of the other State agencies with jurisdiction and you can verify the fracing rules. By the way, if you are interested in the chemical composition of frac jobs, visit Frac Focus and look at the level of detail that is being reported. That was a voluntary program supported by industry & now adopted as a mandatory chemical disclosure filing in most producing States. You can readily fact check and confirm everything here. As a former 24 year veteran oil & gas regulatory professional, I was well aware of these rules..

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