Oklahoma oil and gas officials are dealing with increasingly strong earthquakes, but concerns are growing that they lack the legal authority for their efforts to reduce the shaking.
"I think we’re headed for a very big lawsuit," said state Rep. Cory Williams, a Democrat who represents the frequently shaken city of Stillwater. Oil companies might soon challenge regulators’ right to rein in operations, he said, "and they might be right."
Scientists and state officials have linked Oklahoma’s earthquake swarms to oil and gas activity, particularly disposal of drilling wastewater.
The problem is that oil and gas rules are focused on preventing and cleaning up pollution, not preventing earthquakes, said Williams, who has been meeting with regulators on the issue.
Drilling in the state is overseen by the Oklahoma Corporation Commission (OCC), a panel of three statewide elected officials. In an attempt to head off earthquakes, the commission’s oil and gas staff shuttered wells and told operators to scale back injection operations. But commissioners have recently voiced doubts about the agency’s authority to issue such directives.
"We do have jurisdictional questions that need to be answered," Commissioner Todd Hiett, who is also a former speaker of the state House, said at a commission session last month.
Hiett was agreeing with Chairman Bob Anthony, who’d asked staff to research the agency’s legal authority as it put off a decision on whether to approve five disposal wells in quake-prone areas.
Commission spokesman Matt Skinner said the agency plans to press forward, but acknowledged some of the legal uncertainty.
"The Oil and Gas Division staff has and will continue to respond to the seismicity issue with the understanding that the agency has jurisdiction over this area as it relates to oil and gas activity," Skinner said. "However, as with any of the many areas under Commission jurisdiction, individual cases may pose legal questions which have to be addressed."
Williams, who has met with commissioners and OCC staff, wants to press the issue at a hearing the Legislature is planning later this month on man-made quakes. He thinks the Legislature should act to make it clear that the commission does have authority to regulate disposal wells to prevent earthquakes.
"If this is something even blowing in the breeze, why don’t we make sure they have clear authority?" Williams said. "I’ve come to the realization that neither the governor nor the Legislature are going to act. We ought to give the authority to the people who can do something."
Williams doesn’t think getting the Legislature to move on the issue will be easy. Even after 585 earthquakes in Oklahoma last year, no bills on earthquakes were introduced at the Statehouse. Instead, the commission’s budget was cut and its duties were increased by eliminating the ability of local governments to regulate oil and gas.
Unprecedented quake swarms
Oklahoma has already topped last year’s record for earthquakes, with more than 680 of magnitude 3 or greater.
The state’s unprecedented swarms of earthquakes appear to stem from favorably lined faults and production methods that create uniquely large volumes of wastewater. That wastewater seeps into the faults and changes the pressure, and the faults slip.
Interfering with the oil and gas business is unpopular in Oklahoma, where as many as one in five jobs are tied to the industry, and most politicians rely on industry executives for campaign contributions.
The commission quietly undertook a "traffic-light" system of regulation in mid-2014, informally applying extra scrutiny to proposed wells in earthquake-prone areas.
In March, the commission began focusing on wells drilled too deep, piercing bedrock. The agency ordered companies to prove their wells weren’t drilled into the bedrock. If they were, they had to close the well and "plug it back" to make it shallower.
In August, the agency took some of the first steps toward broad-scale reductions in disposal volume, ordering nearly two dozen wells northwest of Oklahoma City to cut back.
More recently, the commission directed American Energy Partners LP to close two wastewater wells after a larger-than-usual earthquake near the pipeline hub of Cushing, Okla. Three other wells had to reduce the volumes being injected (E&ENews PM, Sept. 18).
Such cutbacks can hurt oil producers’ bottom lines. To reduce injected volumes, companies would have to reduce production or spend more to ship waste farther for disposal. And many oil companies are already hurting from low oil prices.