Shake Rattle and Oil
Oklahoma Fracker Rejects Anti-Earthquake Regulations

An Oklahoma oil company is rejecting an appeal from state regulators who have asked it to cease storing wastewater from its fracking operations in wells. Oklahoma has seen a sharp spike in low-magnitude earthquakes in recent years, and studies have tied this seismic uptick with the storage of wastewater in wells. But the company in question, Sandridge Energy, doesn’t think the science is settled enough for the state to deny it its cheapest option for discarding its fracking effluent. The WSJ reports:

Sandridge Energy Inc., which has complied with similar requests in the past, said this time it won’t stop using its wastewater disposal wells, which are part of the company’s oil-and-gas fracking operations…The Oklahoma Corporation Commission, which regulates energy companies, is working on legal action to modify Sandridge’s permits in order to force it to comply, said Matt Skinner, a spokesman for the agency. […]

How Sandridge fares in the inevitable legal battle ahead of it could have large implications for the shale industry. The studies mentioned above are part of a sizable body of evidence linking the disposal of wastewater in wells with increased seismicity, and while it may be too early to definitively draw a causal connection between the two phenomena, this is still a very serious issue that deserves the scrutiny it’s getting.

That doesn’t mean capitulating to Chicken Little pronunciations that fracking is going to swallow homes. That kind of breathless fear mongering may be the default state of the modern green movement, but it doesn’t lend itself to constructive policymaking or regulation. It’s important to put these earthquakes in context, because their magnitudes are so low that they often can’t be felt without specific instrumentation. Moreover, while some studies have linked the hydraulic fracturing part of shale drilling (the step from which fracking derives its name) with micro-quakes, the case is a bit stronger against disposing wastewater in wells—and that doesn’t pose an existential threat to the industry because, as the WSJ notes, there are alternatives available:

Some oil-field service companies load wastewater into trucks and haul it to special treatment plants, where it is cleaned for reuse—sometimes recycled back into oil-and-gas operations or, in some cases, used to water crops. But those options are usually more expensive than using disposal wells.

We’ve highlighted the industry’s drive to recycle its fracking fluid, a move that could not only prevent seismic forcing but, if it can be commercially scaled, could end up saving companies money.

There’s a fight brewing in Oklahoma, and it’s one worth paying attention to. Fracking has remade the American energy landscape in just a few short years, but its linkage with earthquakes demands sober analysis, just as its regulation requires consistent but not overly onerous oversight—enough to keep companies from acting irresponsibly but not so much as to stifle the industry’s ability to adapt to these new challenges. Finding that middle way is the perennial challenge for regulators, and it isn’t easy. We’ll be watching to see how Oklahoma manages.

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