Oklahoma oil and gas producers are headed toward stricter regulations for disposal wells as a recent surge in earthquakes has led the state to outrank California as one of the most seismic active states in the country.

The state is on track to surpass last year’s number of nearly 600 earthquakes of magnitude 3.0 or higher, said Jeremy Boak, Oklahoma Geological Survey director. Oklahoma is projected to have about 950 quakes in 2015. Prior to 2009, the state averaged about two quakes per year.

Boak told Hart Energy that the boost has been specifically triggered by injecting wastewater into the Arbuckle Formation. The Arbuckle is the state’s deepest formation in which wastewater is injected.

The state’s response has been measured so far, with a system to reduce injection volumes in some of the most seismic-active counties. To date, the industry has appeared to cooperate fully with some operators voluntarily shutting down disposal wells, Boak said.

Oklahoma, earthquakes, graph, US Geological Survey, USGS

The state has about 4,250 disposal wells, according to the Oklahoma Corporation Commission, the state’s oil and gas regulatory body. About 145 wells have been plugged at this point.

Wells Shut Down

A cluster of earthquakes near an Oklahoma town in Logan County raised concerns that something must be done sooner rather than later.

Three earthquakes above 4.0 magnitude rocked the town of Crescent, Okla., on July 27, and led to two producers closest to the quakes, Devon Energy Corp. (DVN) and Stephens Energy Group LLC, to voluntarily shut down operations. Stephens also cut injection volumes in half for another nearby well.

In response to the intense quakes, the Oklahoma Corporation Commission’s Oil and Gas Conservation Division (OGCD) also announced a plan to reduce wastewater disposal well volumes in northern Oklahoma County and southern Logan County by 38%. This will bring the area’s wastewater volume to under what it was—about 2.4 million barrels—when it experienced the sharpest rise in seismicity in 2012.

Michael J. Callan, Stephens Energy’s vice president of governmental affairs/marketing, said this was the first time the company has had one of its facilities affected by seismic activity. However, he said the Little Rock, Ark.-based company is doing what it can to help the Oklahoma Corporate Commission and the state’s Geological Survey.

“We’re isolated above what they call the basement rock,” Callan said. “We don’t believe that there’s any issue with the wells, but we did think it was prudent to shut in and cut back at this time to assist them during their investigation.”

Stephens Energy’s disposal wells in the state are completed above the Arbuckle Formation, which sits on top of the basement rock. This formation has been linked to the recent seismic activity, said Callan.

“Right now we believe that because of the depth of our wells that we’re going to be OK and there won’t be a need to shut those in the future,” he said.

Cause And Effect

Seismic activity in Oklahoma has been related to a couple of major plays—the Mississippi Lime and Hunton. Both are limestone plays and require a good deal of dewatering of the formation before they begin producing, Boak said.

The produced water is actually ancient seawater that was trapped in the rock when it formed more than several hundred million years ago. Its chemistry is a little bit different than typical seawater.

The produced water is sometimes a little more salty and has other elements. It has to be disposed of underground, and the Arbuckle Formation is a good location to do that, Boak said.

“[The Arbuckle Formation is] nicely porous and takes water very easily. You don’t have to work at it,” he said. “You just more or less pour it down the hole.”

The porosity of the formation means that it spreads quite widely. Commonly there isn’t a clear bottom field that prevents that water from working its way into the basement, which is what leads to seismic activity, Boak said.

“What we’re seeing is a kind of rise in the pore pressure down in the basement,” he said. That relieves some of the stress on small faults, enabling them to move. When the pore pressure is raised, it reduces the stress that is holding the faults shut and keeping them from moving, Boak added.

For as far back as the 1980s, most of the faults on Earth have been in a state of pressure in which they’re just barely able to not move, Boak said. “They’re very close to the point at which any stress that builds up on them will be relieved,” he said. “That’s why we do have earthquakes in the middle of the continent, whereas most people normally think about all of the earthquakes associated with subduction and with plate motions on the boundaries of the plates—California, Alaska, Peru.”

Areas in other states, such as Kansas, Texas and Ohio, where the oil and gas industry is active, also have experienced an increase in seismic activity.

Traffic Light System

Oklahoma first put in place a “traffic light” system in 2013 in response to the increase in quakes. The commission said the system has been in a constant state of evolution since then as new data has become available.

Oklahoma’s traffic light system includes:

  • A “plug-back” program covering more than 500 disposal wells. Wells are reducing their depth if found to be sharply increasing the risk of induced seismicity;
  • Required seismicity review for any proposed disposal well;
  • Weekly volume reporting requirements for and close scrutiny of all disposal wells in an area of interest;
  • Rules increasing from monthly to daily the required recording of well pressure and volume from disposal wells in the Arbuckle Formation; and
  • Rules requiring tests for wells disposing 20,000 barrels a day or more to be implemented multiple times per year if directed by the commission.

Boak said he has heard some ask for more serious action, such as a drilling moratorium, in the state.

“It’s not clear, first of all, [a moratorium] would be more effective than what we’re doing and that would certainly encounter resistance from the industry,” he said.

The state will continue its stepwise approach until it has more of a scientific aspect to the effects of current injection volume reduction plan, he said.

With the implementation of regulations by the state, there’s a hint that the number of quakes are plateauing. Still, Boak doesn’t know if that’s going to be good enough.

“I think people want to see a real decrease and it’s just not clear that sort of flattening out is headed toward a decrease,” he said.

Contact the author, Emily Moser, at emoser@hartenergy.com.