Bloomberg News

Ohio Quake Spurs Action on 5 Wells, Won’t Stop Oil and Gas Work

January 05, 2012

Jan. 4 (Bloomberg) -- A New Year’s Eve earthquake in Youngstown, Ohio, that prompted the state to stop or delay operations at five wells for disposing of wastewater from oil and natural-gas extraction won’t affect production.

State Representative Robert F. Hagan, a Democrat who represents Youngstown, is calling for a moratorium on all hydraulic fracturing and injection-well activity “until we can conclude it’s safe.” The wastewater is a byproduct of hydraulic fracturing, also called fracking, used to unlock fossil fuel deposits.

Governor John Kasich and the Ohio Department of Natural Resources consider the earthquake and others like it to be isolated occurrences and will continue using the state’s other 177 disposal wells without interrupting shale-gas development that may produce thousands of jobs, said Rob Nichols, a spokesman for Kasich.

“We are not going to stand by and let someone drive a stake through the heart of what could be an economic revival in Eastern Ohio,” Nichols said yesterday in a telephone interview.

Kasich has touted the potential economic benefits of using hydraulic fracturing to release oil and gas from rock formations by forcing millions of gallons of chemically treated water and sand underground. It “could bring an economic resurgence really to all of Ohio,” he said last month.

Chesapeake Energy Corp. said in a statement that Total SA, France’s largest oil company, agreed to pay $2.32 billion for a 25 percent stake in eastern Ohio’s Utica shale region from Chesapeake and EnerVest Ltd. Total will gain a 25 percent stake in 619,000 acres, while Chesapeake will get $2.03 billion and EnerVest $290 million, the company said yesterday.

Rocking New Year

Environmental groups such as the Natural Resources Defense Council question whether fracking’s risks are worth it. A string of quakes in Youngstown, which is roughly equidistant from Cleveland and Pittsburgh, joined temblors in states including Arkansas and Texas that researchers say may have been caused by wastewater wells that inject fluid under pressure.

Ohio’s Natural Resources Department said operations at the Youngstown well were stopped Dec. 30 after 10 earthquakes that began when D&L Energy Inc. began injecting drilling brine 9,200 feet underground in December 2010. The quakes, which began in March, ranged from 2.1 to 2.7 on the Richter scale, the Ohio Seismic Network has said.

After a magnitude 4.0 earthquake hit the area Dec. 31, the state ordered injections suspended and put proposals for four other wells within a five-mile radius on hold pending study, Nichols said. The company has agreed to bring tanks to the site to pull out water with the goal of reducing pressure and lowering the risk of continued seismic activity, Rick Simmers, chief of the oil and gas division of the Natural Resources Department, said late yesterday in a telephone interview.

Ben Lupo, president and chief executive officer of D&L Energy, didn’t respond to a voicemail message seeking comment on the plans to reduce pressure.

Pressure Reduction

Simmers estimated that about a day’s worth of water injected into the well, between 3,000 and 5,000 barrels, could be removed starting as early as today. There were 352,780 barrels, or 14.8 million gallons (56 million liters), of fluid injected at the Youngstown site through the end of the third quarter, according to data provided by the department.

The Dec. 31 earthquake was felt in northeastern Ohio, western Pennsylvania and Ontario, Canada, according to the Ohio Seismic Network’s website. It cited reports of minor damage, including cracked plaster and glassware falling from shelves.

Thumping and Bumping

Hagan, the lawmaker, said he was ironing a shirt for a New Year’s Eve party when the quake hit and he thought his son had fallen down the stairs. He said while he doesn’t want to ignore fracking’s economic potential, he wants jobs “that are environmentally safe.”

“Some people have accused me of screaming, ‘The sky is falling,’” Hagan said in a telephone interview. “But when the earth is moving, we have an obligation to find out why.”

About 7 million barrels of wastewater from drilling have been injected annually into Ohio wells without incident because the practice is closely regulated, Thomas E. Stewart, executive vice president of the Ohio Oil and Gas Association, a trade group with more than 1,450 members, has said.

The association supports the temporary halt to injections near Youngstown, though the quake was “a rare and isolated event that should not cast doubt about the effectiveness” of the wells, Stewart said in a statement Jan. 2.

Terry Fleming, executive director of the Ohio Petroleum Council, said the state acted “with appropriate due caution” and that the situation in Youngstown is “very rare.”

“Ohio needs to maintain a reliable, safe, well-regulated network of disposal sites as we move forward with a very promising expansion of oil and gas exploration,” Fleming said yesterday in a statement.

Mystery Fault

It’s possible the injection well triggered a previously unknown fault, said Michael Hansen, a geologist and coordinator of the Ohio Seismic Network.

Even with the well shut down, there may be seismic activity in Youngstown for months or years, said Won-Young Kim, director of Columbia University’s Lamont-Doherty Cooperative Seismographic Network in Palisades, New York. The network deployed equipment near the well last month to determine how deep the quakes are, Kim said in a telephone interview.

There’s no evidence that something other than the Youngstown well is causing the earthquakes because they occurred nearby and close to the depth of the injections, Kim said.

“Youngstown is not California,” Kim said.

--Editors: Pete Young, Jessica Resnick-Ault

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net


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