Seismologists at the U.S. Geological Survey urgently warned last week that underground injection of drilling wastewater near a previously unmapped but increasingly unstable fault that runs directly beneath Cushing, Okla., could trigger a major earthquake that would severely damage the storage tanks and pipelines at the world's largest oil storage facility.

IHS The Energy Daily has learned that the study published October 8 in the American Geophysical Union's (AGU) peer-reviewed journal Geophysical Research Letters sparked the Department of Homeland Security (DHS) - which is responsible for protecting infrastructure critical to national security - to develop new seismic models for use in emergency response planning for the Cushing facility. The report, titled "Reactivated faulting near Cushing Oklahoma: Increased potential for a triggered earthquake in an area of United States strategic infrastructure," was authored by a team of seismologists at the U.S. Geological Survey (USGS), including former Oklahoma State Seismologist Austin Holland.

Conducted in the wake of 4.0 and 4.3 magnitude earthquakes near Cushing in October 2014, the study states that the newly mapped fault has the potential to cause a 5.7 magnitude earthquake that could "seriously damage storage tanks and pipelines at the Cushing facility.

"Based on stress changes due to the 2014 Cushing sequence, and continued wastewater injection, it is reasonable to conclude that the [newly mapped] Cushing and [known] Wilzetta-Whitetail fault zones are critically stressed in a region sufficient enough to increase the likelihood of a large and damaging earthquake," the study states.
"Results from this study can be used as guidance to the recommendation that the energy industry should avoid injection into active faults and be prepared to distribute the volume across wells, and/or be prepared to abandon wells altogether in areas of unacceptable risk."

The threat posed by faults under Cushing was underscored this weekend when a 4.5 magnitude earthquake rattled the area, damaging buildings in the town but causing little or no damage to the storage facility itself. It was the largest quake yet to hit the Cushing area. Notably, the Oklahoma Corporation Commission (OCC) shut down or restricted wastewater injections at three disposal wells near Cushing in the wake of the 2014 earthquakes that struck the area. However, at that time those wells were allowed to resume operations under new restrictions within a few weeks.

Following another earthquake near Cushing last month with a 4.2 magnitude, the OCC again shut down operations at one of those wells and restricted operations at several others. Dozens of disposal wells are in the area. Since the report came out, the Oklahoma Corporation Commission has shut down all disposal wells within 3 miles of the recent earthquakes and has restricted disposal at several other wells within six miles. The commission also has indicated it may take further action on other wells within a 10-mile radius.

OCC staff is using the findings of the new study as it reviews operations of disposal wells within a 10-mile radius of the epicenter of Saturday's earthquake, OCC spokesman Matt Skinner told IHS The Energy Daily Tuesday.

"We're taking it extremely seriously," he said, in relation to the new study.

Oklahoma, Texas, Kansas and a handful of other oil and gas-producing states in recent years have seen an increasing number of earthquakes that have been linked to underground injection wells used to dispose of the wastewater co-produced in oil and gas wells. This is in line with the dramatically increased number of disposal wells to serve the growth in horizontal wells drilled into shale formations in parts of north and west Texas and Oklahoma and the associated increase in produced water volumes.

The disposal wells can create changes in pressure along existing faults that can cause small to moderate earthquakes, but those events can then trigger larger tectonic earthquakes. Because of that mechanism, the USGS has reported that "induced" earthquakes can be just as large and potentially destructive as naturally occurring ones.

After a long period of questioning the link between oil and gas operations and earthquakes-which have increased more than 600-fold in Oklahoma since 2008-the OCC earlier this year began restricting saltwater disposal in some wells. But the number of earthquakes has continued to rise along the network of previously dormant faults that underlies the state.
The new study points to disposal wells as posing a rising threat to the facility, which includes about 71 million barrels of oil storage capacity, or about 19 percent of the country's commercial storage capacity. Cushing is also the pricing point for benchmark West Texas Intermediate crude oil and is served by about eight major pipelines-including TransCanada's Keystone and Enbridge's Seaway pipelines-that transport oil from producing regions to refineries on the Gulf Coast and in the Midwest.

Specifically, the study shows the newly mapped Cushing fault extending directly beneath the oil storage facility. That fault has the potential to trigger an earthquake at least as powerful as the 5.6 magnitude induced quake that caused significant structural damage in Prague, Okla., in 2011, the study states. And the ground-shaking intensity could be more intense at Cushing given the depth of the faults in the area, the study says.

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22 October 2015, Jim Day, Journalist, IHS Energy

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This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.