With the U.S. Geological Survey recently raising Oklahoma's earthquake count for 2014 by more than 20, the overall rate of earthquakes in the state appears to be on the rise. Is the increase connected to Oklahoma’s oil and gas operations? On today's The Cutting Edge, EnergyWire reporter Mike Soraghan discusses his latest reporting on the regulatory steps being taken in Oklahoma as a response to the surge in earthquakes.
Monica Trauzzi: Welcome to The Cutting Edge. Oklahoma taking regulatory steps as a response to earthquakes in the state in a new piece in EnergyWire, reporter Mike Soraghan talks about the new scrutiny facing well permits. Mike, this is a follow-up to a story that ran earlier this week. What's the new approach being taken by the Oklahoma Corporation Commission and what types of wells are facing extra scrutiny?
Mike Soraghan: Well the Oklahoma Corporation Commission regulates oil and gas in Oklahoma and they're taking a closer look at disposal wells. This is not hydraulic fracturing but these are disposal wells that take the wastewater from fracking or production or whatever. There's a lot of suspicion that these are leading to a big rash of earthquakes in the state. So the Corporation Commission is proceeding with what they call yellow light permitting at least with new wells and they are saying, "We are going to put extra restrictions and pay extra attention to new wells when you ask for a permit." If you get a permit and you build a well and there's an earthquake, they're going to clamp down even further and maybe even shut down the well.
Monica Trauzzi: You report that one in six jobs in Oklahoma is tied to oil and gas operations. Is this regulatory overreach by the commission, or are they simply just proceeding with caution?
Mike Soraghan: Nobody's accused them of regulatory overreach. This approach is subject to challenge if they want to appeal under the ways that the commission works. If anything there's probably been criticism that they are not doing enough. They are still permitting wells and there's still a couple of earthquakes every day in Oklahoma.
Monica Trauzzi: EnergyWire obtained emails giving some insight on what state scientists believe the link between oil and gas operations and earthquakes is. Talk about what you found out.
Mike Soraghan: Right. That was an Open Records Act request that we did under Oklahoma records laws. We found that privately Oklahoma seismologists with the Oklahoma Geological Survey was saying that they suspected as far as back 2010 that a big swarm of the earthquakes around Oklahoma City was related to oil and gas production but they were not saying that publicly and they rejected those findings when other scientists came out. One of the -- when we looked at those emails we also found that one of the reasons might be that when the state seismologist started agreeing with some of those findings, he was called into meetings with the president of the university where he works and in that meeting, in that particular meeting was Harold Hamm, who is the chairman of Continental Resources. He's a looming figure in the state, and he's someone who does not believe that these disposal wells can cause earthquakes.
Monica Trauzzi: So how is the industry reacting? What do these new regulations mean for the industry overall?
Mike Soraghan: It makes it a little harder to permit wells. Fortunately for the industry it doesn't restrict where they can produce. The oil is where the oil is. Disposal is a little more flexible where you want to dispose of it. It has meant at least maybe two dozen wells have not been built where the companies originally wanted to build them. There's backlog of 86 permits that might have otherwise gone through a lot faster than this. A couple -- a handful of wells have been shut down. But one thing is that this doesn't apply to existing wells. There are 3,000 some-odd existing wells, and the commission has not done as much in that area.
Monica Trauzzi: All right Mike. We'll end it there. Great reporting. It's been very interesting to follow all of your reporting. Thanks for coming on the show.
Mike Soraghan: Thank you very much.
Monica Trauzzi: More Cutting Edge coming next Friday. We'll see you then.
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