‘Huge Increase’ in Oklahoma Quakes ‘Game-Changer’ For Oil & Gas Industry

By Nick Cunningham, Oilprice.com:

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.

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 position 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.

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.

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, Oilprice.com

First was Oklahoma, now earthquake capital of the US. Read…  Concerns Over Fracking Earthquakes Spread To Texas

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  4 comments for “‘Huge Increase’ in Oklahoma Quakes ‘Game-Changer’ For Oil & Gas Industry

  1. john tucker says:

    The tree huggers have been desperately attempting to make an issue out of this … the facts are that an earthquake of 3.0 is barely noticeable to anybody and does absolutely zero damage to anything ….Wolf there’s enough real dangers out there without worrying us about terrifying winds from butterfly wings ….

    • Wolf Richter says:

      John, you’re being silly.

      I spent a big part of my life in OK and TX. I NEVER experienced an earthquake there, ever. But I left 15 years ago. I have a lot of friends who still live there, and it’s a bad situation. Nothing is built to withstand a big earthquake. A 5 can create some damage, and there has been some damage. A 6 or 7 might level whatever is close enough to the epicenter. Tulsa isn’t built like San Francisco! This is no joking matter.

    • night-train says:

      And what about the cumulative effect on structures built with minimal seismic integrity? This induced seismicity is very real to people who never signed up for it. Even in one of the most O&G friendly states in the country, the regulators are being forced to act. O&G isn’t just about pumping black gold out of the ground and putting money in the bank. They have to deal with the waste stream produced with the O&G and from the drilling and completion operations. If they can’t use deep injection well disposal safely, they are likely to have a major problem.

  2. We are beginning to see that the cost of drilling for more and more difficult oil and gas is not just financial. To watch the “oil whore” who shills for the API on TeeVee selling safe, clean extraction and boasting of U. S. production is maddening.

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