Recycling vs. quakes
Regulators think that the recycling of water produced in the oil and natural gas industry may hold both short-term and long-term answers for solving the earthquake swarm ongoing in Oklahoma.
Regulators and operators seeking to end the state’s ongoing earthquake swarm are focusing on both short-term and longterm answers. Both focus on water.
Research and regulation has centered on high-volume disposal into the deep Arbuckle rock layer of highly salted water produced along with oil and natural gas. To end the quakes, regulators say, water disposal volumes must be cut drastically.
That has happened over the past year from a combination of slowed drilling because of lower oil prices and Oklahoma Corporation Commission directives that require a 40-percent reduction in disposal volumes over a vast stretch of central and northwestern Oklahoma and even sharper cuts around hot spots that have been shaken by magnitude 4.0 or greater quakes.
Both are short-term solutions, but they appear to be having an impact.
While the state has experienced 457 magnitude 3.0 or greater quakes so far this year, the 180-day moving average is at rates unseen since late 2014 and is on pace to drop to early 2014 levels, Oklahoma Geological Survey Director Jeremy Boak said.
Because of the new directives, low oil prices and the expense of operating in the Mississippi Lime, drilling activity has slowed drastically in that area. Instead, companies are focusing on central Oklahoma’s STACK and SCOOP, which produce much less water and offer other disposal layers.
Oil prices, however, have rebounded from 12-year lows set in February and eventually will recover to the point that drilling picks up throughout Oklahoma. Still, Boak said he expects the earthquake decline to continue.
“The reduction in volume will continue to stay lower,” Boak said. “There is still some interest in bringing back online some of the wells shut in in the Mississippi Lime, but I think the current directives of the Corporation Commission are going to restrain that.”
What happens when drilling increases?
While drilling likely will increase, companies will have to be more creative in finding ways of disposing of the water. “I think it will be very difficult to get new disposal in the Arbuckle anywhere,” Boak said.
Limiting drilling in high-volume areas is having success, but it’s a short-term solution. The long-term answer is to find a way to use the water so there is no need to dispose of it and no need to constrain drilling to deal with it.
To address the broader challenges posed by oilfield water, Gov. Mary Fallin last year created the Oklahoma Water for 2060 Produced Water Working Group, which is tasked with encouraging development that would find better ways to use produced water.
Oklahoma Water Resources Board Director J.D. Strong is chairman of the water group and is leading the group to look at ways produced water can be used in power generation, irrigation and other uses. Increased oil production creates both challenges and opportunities for water use, he said.
“It does change the landscape,” Strong said. “It means we’ll soon have back online bigger volumes of produced water, but importantly it also means higher profit margins, which have been very slim to none over the past couple of years, so the oil and gas companies will be able to have additional capital to invest in some of those potential solutions.”