EARTHQUAKES

Kan. links quakes to oil and gas, sharply limits waste disposal

BLUFF CITY, Kan. -- Regulators in Kansas have imposed sharp restrictions on oil and gas activity in two southern counties in response to increased earthquakes in the area.

The Kansas Corporation Commission (KCC) cited an "immediate danger" to public safety as the reason for limiting the pressure that can be used to inject wastewater into disposal wells and the volumes that can be injected.

"Because individual earthquakes cannot be linked to individual injection wells, this order reduces injection volumes in areas experiencing increased seismic activity," commission officials stated in the March 19 order. "The Commission finds damage may result if immediate action is not taken."

Kansas' move is a contrast with neighboring Oklahoma, where officials dealing with the same problem just across the border are focusing on finding wells drilled too deep (EnergyWire, March 26). The Oklahoma Corporation Commission (OCC) has not limited injection volumes or pressures but has not ruled out doing so in the future.

"We may very well get to that point," Tim Baker, director of OCC's Oil and Gas Conservation Commission, said last week at a forum in Medford, Okla. (EnergyWire, March 26).

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The Oklahoma commission has also avoided explicitly linking earthquakes to disposal wells, saying getting embroiled in such a debate could bog down its response. But Kansas officials made a direct correlation.

"The increased number of recorded earthquakes in Kansas coincides with an increase in the number of injection wells and the amounts of injected saltwater in Harper and Sumner counties," the order states.

Kansas had 127 earthquakes last year, according to the commission order, and more than 50 this year by mid-March. From 1981 to 2010, Kansas had 31 quakes.

In 2010, the two counties had 97 injection wells that injected 800 million gallons of fluid. In 2013, according to the order, that rose to 150 wells injecting 2.6 billion barrels.

Oklahoma City-based SandRidge Energy Inc. is the major operator in the area, producing from the Mississippi Lime play. The formation is known to produce high amounts of wastewater compared with conventional production. A SandRidge spokesman said the company intends to comply with the order but declined to discuss its plans, such as whether it will appeal the order.

Under the order, no wells injecting into the Arbuckle Formation in Harper and Sumner counties can inject more than 25,000 barrels (about 1 million gallons) a day. That places limits on at least 23 wells in the area that had been granted permits to inject 30,000 barrels or more a day.

Beyond that, in four areas within those counties, wells will be limited to 8,000 barrels (336,000 gallons) a day and pressure of 250 pounds per square inch within 100 days of the order, which ratchets down the volume across that 100-day period.

Kansas officials are also requiring companies to show they have not drilled deeper than the Arbuckle Formation. Beneath the Arbuckle in most places is "basement" rock. Oil and gas officials say that injecting into basement rock creates a greater risk of causing earthquakes than injecting into shallower layers.

Injection-well opposition

The order was issued hours after a hearing on two SandRidge injection wells that were protested by Frank Smith, who lives on a farm in the Bluff City area. SandRidge wants to use the wells for enhanced oil recovery, which is different from disposal.

In an interview last week, Smith said that his home has been hit by earthquakes, as have many of his neighbors' homes.

"They're hurting a lot of people," Smith said of oil companies and their wells. "They're doing incremental damage to so many homes."

At the hearing, SandRidge officials sought to prevent Smith from bringing up connections between injection wells and earthquakes. But commissioners ruled that Smith could bring up the topic.

A corporation commission spokesman said the agency wouldn't comment beyond the language of the order, because companies might appeal it. But Smith said he believes the commissioners used the opportunity presented by his protest to issue the order. Smith's protest of the two wells is still under consideration by the commission.

Of the 72 large-volume injection wells in Harper and Sumner counties identified in the order, 44 are owned by SandRidge, the dominant producer in the Mississippi Lime play. SandRidge also has the highest injection volumes.

Another 14 are owned by Tapstone Energy, an Oklahoma City-based company founded by former SandRidge CEO Tom Ward.

One is owned by Chesapeake Energy Corp. of Oklahoma City and seven are owned by Source Energy of Highlands Ranch, Colo., which says it has more than 350,000 acres of oil and gas rights on the Kansas side of the Mississippi Lime play.

Efficient disposal is key to SandRidge's operations. Company officials said in a recent securities filing that a policy requiring the company to shut down a "substantial number" of its wells "could materially and adversely affect the Company's business, financial condition and results of operations" (EnergyWire, March 9).

The companies and others with an interest have 30 days from the date of the order to request a hearing. So far, none has.

Twitter: @MikeSoraghan | Email: msoraghan@eenews.net

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