Bloomberg News

Ohio Quakes Linked to Drilling-Disposal Well, Report Says

March 09, 2012

Earthquakes last year in Ohio were probably caused by wastewater from oil and natural-gas drilling injected into a disposal well, and regulations are needed to address concern about seismic activity, a state report said.

The Ohio Department of Natural Resources today proposed creating rules for fluid transportation and disposal that it said would be “among the nation’s toughest,” including banning drilling into some rock formations and requiring geological reviews before wells are approved.

The recommendations are a response to 12 quakes centered within a mile (1.6 kilometers) of an injection well in Youngstown, Ohio.

“A number of coincidental circumstances appear to make a compelling argument for the recent Youngstown-area seismic events to have been induced,” including the timing, location and depth of the earthquakes in relation to the well, the report said.

Researchers are also looking into whether temblors in states, including Arkansas (STOAK1) and Texas (STOTX1), were caused by injecting fluid under pressure. U.S. states are trying to avoid any environmental impact from hydraulic fracturing while reaping the economic benefits. So-called fracking involves injecting water, sand and chemicals underground at high pressure.

Safeguards Demanded

“Ohioans demand smart environmental safeguards that protect our environment and promote public health,” James Zehringer, the department director, said in the release. “These new standards accomplish this goal.”

Exxon Mobil Corp. (XOM), Chesapeake Energy Corp. (CHK), and Devon Energy Corp. (DVN) are among companies drilling in Ohio’s Utica and Marcellus shale formations. Federal regulators are studying any links between injections and quakes and the effects of fracking on drinking water. The value of production in Ohio may add $4.9 billion to the state’s economic output by 2014, a Feb. 28 study commissioned by the Ohio Shale Coalition concluded.

The evidence suggests that fluid from the Youngstown well “intersected an unmapped fault in a near-failure state of stress causing movement along that fault,” the agency said.

There had been no record of earthquakes in modern times from epicenters located in the Youngstown area before D&L Energy Inc. began injecting drilling brine, a byproduct of drilling, about 9,200 feet (2,804 meters) underground in December 2010, the report said. Starting in March, there have been 12 temblors around the well ranging from magnitude 2.1 to a 4.0 quake that hit on New Year’s Eve, according to the report.

Kasich’s Moratorium

That quake prompted Republican Governor John Kasich to place an indefinite moratorium on the Youngstown well, plus three other drilled wells and one in the vicinity with a permit pending, according to the report. The moratorium affecting five Youngstown-area wells will remain in place, the agency said.

State Representative Robert F. Hagan, a Democrat who represents Youngstown, said the report is vindication of concerns he had about the injection wells and that the recommendations are “moving in the right direction.”

“I’m glad the executive branch of our government finally realized that injecting toxic chemicals into Mother Earth did, in fact, cause the earthquakes,” Hagan said in a telephone interview.

Thomas E. Stewart, executive vice president of the Ohio Oil and Gas Association, said he hasn’t reviewed the recommendations to determine what impact they may have on the industry. He said Ohio already had among the most stringent regulations governing the wells and that the quakes were isolated occurrences.

‘Type of Anomaly’

“Some type of anomaly was encountered that was not expected nor anticipated with one well in one area,” Stewart said in a telephone interview. “The first thing you do is fix the one well in the one area.”

The report recommends 10 changes to the state’s permitting and monitoring program for Class II deep injection wells, including limiting the depth of drilling; additional review of available geological data; installation of a system at wells to continuously monitor pressure; and an automatic shut-off system if injection pressures exceed state limits.

The changes will be implemented as part of the permitting process until they are either enacted into law or approved as part of state administrative rules, the department said in its release. The state also will buy four additional portable seismometers, the report said.

Tracking System

The agency also is requiring the installation of an electronic system to track fluids brought to Ohio wells for injection.

There have been more permits for disposal wells in Ohio during the past two years than in the previous decade combined, according to records from the department. More than half of the volume injected last year was from out of state, included more than 90 percent of the water sent to the Youngstown well, records show.

State Representative Armond Budish, the House Democratic leader, has said Ohio has become “the dumping ground for contaminated brine.” Kasich has said that while he’s not happy about the rising volume of wastewater from neighboring states, the U.S. Constitution prohibits interference with shipments.

While drawing a link to the Youngstown quakes, the agency said it didn’t see a wider threat.

It is “very difficult for all the conditions to be met to induce seismic events,” the state report said. It cited fewer than 20 connected with more than 144,000 U.S. injection wells in operation.

Since Ohio assumed control of regulating disposal wells in 1983 from the U.S. Environmental Protection Agency, more than 202 million barrels of oilfield fluids have been sent to such wells in the state with no reports of contamination or other earthquakes, the report said.

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


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