The Ohio Department of Natural Resources (ODNR) has announced it will be strengthening requirements for Class II injection wells [PDF] as a result of recent earthquakes in the Youngstown area. ODNR has proposed a suite of new seismic requirements to be imposed on Class II injection well permits through specialized attached permit conditions until proposed changes to state regulations can be codified.
Critics of hydraulic fracturing have used the recent earthquakes as part of a broader push for additional regulation over the oil and gas industry. It is critical, however, to separate hydraulic fracturing from the disposal of brine associated with oil and gas extraction into Class II injection wells (see here for a good example of how the two issues often are conflated). Indeed, EPA noted in its draft hydraulic fracturing study plan [PDF] that the two most recent studies, one by the University of Texas and one by Southern Methodist University, linked seismic risk with well injection but found no link between hydraulic fracturing and seismic risk. It is injection well disposal—and not hydraulic fracturing—which the new ODNR rules will address.
To put the issue in context, and as ODNR notes in its press release [PDF], there are more than 144,000 Class II injection wells across the United States (the Environmental Protection Agency (EPA) puts the number closer to 150,000). Only six have been linked with seismic activity. In the case of the Youngstown earthquakes, the ODNR believes that a number of unusual coincidental circumstances coalesced at this one well site. These included permeable zones in the Precambrian rock underlying the injection zone and the presence of an unmapped fault already in a near-failure state of stress. ODNR has not conclusively proven a nexus, rather notes that the circumstances “appear to make a compelling argument.”
ODNR’s new seismic requirements are significant, and include obligations to review existing geologic data, collect new geophysical data, and potentially conduct seismic surveys and additional pressure tests. The bulk of these requirements are precautionary geologic data review and mapping, which is logical in areas like Youngstown where unique geology appears to have played a significant role.
There are a couple of key issues to watch related to ODNR’s announcement. The first is a likelihood that anti-drilling activists will continue to use the earthquakes to call for a ban on hydraulic fracturing; or purposely conflate hydraulic fracturing with underground injection to argue that the former causes earthquakes.
The second, is an overbroad regulatory reaction—particularly at the federal level (NRDC has already hinted at the need for the same seismic requirements for Class II wells as are required for Class I wells). Underground injection is not used (or even possible) in critical shale plays across the country, most notably in the Marcellus. For this reason alone, a one-size-fits all federal solution would be the wrong approach.
And while concern over potential seismic risk is justified (whether caused by hydraulic fracturing or injection wells), the proven historic risk of seismic activity related to Class II injection is miniscule (six proven incidents out of 144,000 wells). By all appearances, the Youngstown quakes were essentially the result of a perfect storm, including permeable bedrock zones in the area of an unmapped fault already in a near-failure state of stress and a poorly placed well. The costs of the kind of seismic precautions proposed by ODNR will be significant. If not narrowly tailored, the costs could be substantial enough to disincentivize (or eliminate) underground injection. Such an outcome would result in increased environmental risk because it would reduce or eliminate the EPA-preferred method of oil and gas wastewater disposal, leaving vexing problems of how to deal with the water. Indeed, many Marcellus operators have been (safely) disposing wastewater in Ohio’s injection wells for the past year following a de facto moratorium in Pennsylvania on sending such water for treatment. It is, therefore, critical that the regulatory response is narrowly tailored, flexible, and designed to identify and reduce seismic risk where it exists, but continue to encourage the underground injection of oil and gas wastewater.