Tuesday, September 6, 2016

Oklahoma Corporation Commission (OCC) issued an order to shut down wastewater disposal wells within a 500-square-mile radius of the epicenter of the Saturday's earthquake.





Oklahoma shuts down wastewater disposal wells after recent earthquake By Barclay Nicholson (US) and Johnjerica Hodge (US) on September 6, 2016 

For years, the oil and gas industry has been blamed for the increase in seismic activity in various areas of the United States. Previous posts on this blog have tracked the allegations that hydraulic fracturing operations have contributed to seismic activity. A recent earthquake over the weekend has again sparked a debate regarding the alleged connection between hydraulic fracturing and seismic activity.

On Saturday, a 5.6-magnitude earthquake occurred in Oklahoma. The epicenter of the earthquake was located 9 miles northwest of Pawnee, Oklahoma, but reports suggest that several states felt the impact of the earthquake. In light of the earthquake, the Oklahoma Corporation Commission (OCC) issued an order to shut down wastewater disposal wells within a 500-square-mile radius of the epicenter of the earthquake. Officials at the OCC anticipate that the shutdown will impact 35 wastewater disposal wells.

A number of scientists and organizations have studied potential causes of the increased seismic activity. Some scientists have argued that all wastewater disposal wells in Oklahoma should be investigated to ensure the wells are not close to fault lines or areas with high levels of seismic activity. In fact, some scientists have urged states to encourage the oil and gas industry to develop alternative forms of disposal. 


Ohio has applied some of these suggestions by prohibiting deep injection wells close to fault lines. These scientists have suggested that the increased seismic activity is the result of the use of wastewater disposal wells in hydraulic fracturing operations. However, the wastewater in the disposal wells primarily consists of saltwater, not the fluids used in hydraulic fracturing. 


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EARTHQUAKE RESPONSE: The Oklahoma Corporation Commission’s Oil and Gas Division (OGCD) is in the process of implementing a mandatory directive to shut down all Arbuckle disposal wells within a 725 square mile area, based on the location of the earthquake that occurred shortly after 7 a.m. on September 3, 2016 near Pawnee. The area includes 211 square miles of Osage County, which is outside of OGCD jurisdiction. OGCD is working with the Environmental Protection Agency, which has sole jurisdiction over disposal wells in Osage County. The EPA will determine what action to take in that area. 


TO:  All Intersted Parties
From: Tim Baker
RE: Reduction of volumes for Arbuckle disposal wells located in the Area of Interest for Triggered Seismicity


Pawnee Area


Date: Sept. 3, 2016


The Commission’s Oil and Gas Division (OGCD) is exercising its authority pursuant to 17 O.S. Sec. 52, 52 O.S. Sec. 139 (D) (1) and OAC 16: 10-5-7(g) to respond to an emergency situation having potentially critical environmental or public safety impact resulting from the operation of saltwater disposal wells.


The affected area highlighted on the attached map was previously designated as an area of interest based upon the dramatic increase in earthquakes within the immediate area.


The OGCD has reviewed the report of earthquake activity of magnitude 5.6 MW as reported by the Oklahoma Geological Survey (OGS) on Saturday Sept. 3rd, 2016. The reported earthquake activity constitutes an emergency situation. The following instructions pertain to your operations within the designated area of interest and affect the wells listed below. These instructions are mandatory and to be implemented immediately.


The following schedule applies to all wells within the defined zone in the Area of Interest:


Zero to 5 miles ( 0-5 miles ):
A managed shut-in of wells currently authorized to inject, to be completed on or before Sept. 10th, 2016.


Five to ten miles ( 5-10 ):
A managed shut-in of wells currently authorized to inject, to be completed by Sept. 13th, 2016.


The actions directed in this letter will be reviewed as more information becomes available. Subsequent actions may be necessary if the data warrants such action.


Objections to this action must be submitted in writing by email to Charles Lord or Jim Marlatt at the email address listed below, or at the address or facsimile number indicated in the letterhead. Failure to comply may result in formal legal action by the OGCD.


If you have any questions, contact the OGCD:


Charles Lord or Jim Marlatt


405- 522-2751 405- 522-2758
c.lord@occemail.com j.marlatt@occemail.com


Sincerely,
Tim Baker, Director
Oil and Gas Conservation Division




=============




More than 635 Oklahoma disposal wells directed to reduce depths, volumes
by Paul Monies Published: November 29, 2015 Updated: Nov 30, 2015


Map via NewsOK Graphics

As the top oil producer in the water-heavy Mississippi Lime formation in northern Oklahoma, it's probably no surprise that SandRidge Energy Inc. leads the list of companies for saltwater disposal well volumes into the Arbuckle.

Oklahoma oil and natural gas producers have long targeted the deep Arbuckle layer as a favored location for getting rid of the briny "fossil water" that comes up with oil and gas. But as the state deals with a huge increase in earthquakes, regulators are focusing on the links scientists have made between the amount of wastewater disposal into the Arbuckle and man-made earthquakes.

Oklahoma oil and gas producers inject wastewater into other formations, but by far the largest volumes — more than half — go into the Arbuckle. The total volume disposed into Arbuckle layers in 2014 would more than fill Norman's Lake Thunderbird.

SandRidge accounted for about one-third of all the produced saltwater disposed into Arbuckle zones in 2014, according to an analysis of volume data from the Oklahoma Corporation Commission.
 
That alone is enough produced saltwater to fill Edmond's Arcadia Lake.

Most of those volumes went into SandRidge disposal wells in Alfalfa, Grant, Garfield and Woods counties. Those counties are also where the number of earthquakes greater than 3.0-magnitude has increased in the past few years. The counties are among dozens targeted by regulators for reduced volumes or depths for saltwater disposal wells.



Oklahoma has had more than 810 earthquakes greater than 3.0-magnitude this year, surpassing last year's total of 585 in that category.

Disposal rises

Chesapeake Energy Corp. injected about 14 percent of the saltwater into the Arbuckle in 2014, with Devon Energy Corp. accounting for about 10 percent, according to the analysis by The Oklahoman.
 
Overall, operators injected more than 835 million barrels of produced saltwater into Arbuckle disposal wells last year. That's up 39 percent from the 602 million barrels in 2013. Operators injected about 280 million barrels into Arbuckle disposal wells in 2012.

SandRidge injected more than 254 million barrels of saltwater into Arbuckle disposal zones in 2014. That's up from 214.6 million barrels in 2013 and just 7.3 million barrels in 2012.

Duane Grubert, SandRidge's executive vice president for investor relations and strategy, said the company started its development of the Mississippi Lime formation in 2012. Production in that formation brings up more than 10 barrels of saltwater for every barrel of oil.

SandRidge has invested heavily in the Mississippi Lime formation, building out disposal wells and gathering infrastructure. It's also worked closely with local electric cooperatives to make sure its equipment has enough electricity.

The company originally planned to spin off its Oklahoma disposal well infrastructure into a midstream partnership, although those plans have been put on hold as the price of oil remains low. The partnership, CEBA Midstream LP, is permitted for up to 3 million barrels of saltwater disposal per day.
 
Grubert said it's unlikely the company would ever use all of that capacity. That's because the network is spread across several areas of production. Also, the combination of horizontal drilling and hydraulic fracturing means wells have fairly high "decline curves." Much of the production comes in the first three years, with it tapering off to a steady flow in subsequent years.

"There's capacity in areas we're not developing," Grubert said. "There's production declines in areas that are getting older that create under-utilized capacity that we might use in the future."

Oklahoma regulators have issued directives to operators of more than 635 Arbuckle disposal wells to reduce depths or volumes this year because of their proximity to nearby earthquakes. There are 969 disposal wells permitted for the Arbuckle.

Grubert said low oil prices are causing the volume of saltwater disposed to decline as operators lay down rigs. SandRidge reduced its rigs to four by the end of the third quarter, down from 35 at the end of 2014.

"The volumes from the whole sector are going down with less incremental drilling," Grubert said. "You've got a situation where if there's a directive to reduce volumes from specific wells, there's a volume reduction happening naturally with national declines and lack of reinvestment related to the lower oil price."
 
Data updates

The Corporation Commission disposal well volume data doesn't include Osage County, which is under the jurisdiction of the Environmental Protection Agency. Researchers have found numerous errors in data from earlier years, but Corporation Commission officials said they have been assured those problems have been fixed for the volume data from 2012 to 2014.

Still, about one-third of the Corporation Commission's 2014 volume data doesn't list which layer was used for saltwater disposal. That means the data likely is undercounting the volumes disposed into Arbuckle zones.

Kyle Murray, a hydrogeologist with the Oklahoma Geological Survey, said his latest estimates show more than 1 billion barrels disposed into the Arbuckle last year.

Murray is working on an update to a preliminary report he wrote last year detailing Oklahoma injection well volumes from both saltwater disposal and enhanced oil recovery injection, a method of production that uses significant volumes of water.

"Seismic activity from 2009–2014 far exceeds historic seismicity and, in a few cases, has been correlated to subsurface fluid injection in the Midcontinent," Murray's 2014 report said. "Therefore, there is an urgent need to quantify volumes and pressures of injections by geologic zone of completion, and use this information to develop best management practices for water that is co-produced with oil and gas."

Researchers aren't as worried about the links between enhanced oil recovery and induced seismicity because the pressure holds steady as producers recover about as much water as they inject. In those "water flooding" operations, the water is re-injected into the same rock layer.

Meanwhile, the Oklahoma Sierra Club and Washington-based Public Justice have notified four Oklahoma oil and gas companies they intend to sue them over the volumes of saltwater injected into disposal wells and the links to earthquake activity.

The groups plan to bring a lawsuit under the federal Resource Conservation and Recovery Act, a 1976 law that allows citizen lawsuits over hazardous waste. They sent letters to SandRidge, Devon, Chesapeake and New Dominion LLC earlier this month outlining their concerns.