Scientists are saying with increased certainty that two damaging earthquakes in 2011 -- one in Colorado, the other in Oklahoma -- were triggered by oil and gas production activities.
Studies by seismologists from the U.S. Geological Survey, the University of Oklahoma and Columbia University have found the quakes were caused by the deep underground injection of drilling waste.
The researchers are to present their findings this week at the fall meeting of the American Geophysical Union in San Francisco.
Seismologists have been suspicious from the start that the convulsions were caused by human activity, or "induced." Now, with additional study, they are asserting a connection more definitively.
USGS scientists had been equivocal about links between drilling and chronic seismic activity near Trinidad, Colo., punctuated by a magnitude-5.3 convulsion in August 2011. According to an abstract for this week's conference, they have now concluded that most, if not all, of the quakes "have been triggered by the deep injection of wastewater related to the production of natural gas from the coal-bed methane field here."
University of Oklahoma seismologist Katie Keranen reported earlier this year that there was "a compelling link" between injection and the magnitude-5.6 earthquake in November that injured at least two people and damaged up to 200 structures east of Oklahoma City. Next week, she will present the results of a study done with researchers from USGS and Columbia finding that it was "likely triggered by fluid injection."
But these findings continue to be dismissed as premature by state government scientists in Colorado and Oklahoma and all but ignored by oil and gas regulators (EnergyWire, July 25). It's a scientific debate that at times has gotten personal.
"It's still an open question," Colorado state geologist Vince Matthews said in an interview Friday. "These cowboys from USGS are sure these are induced. They're jumping to conclusions."
The findings are part of a slew of reports at the AGU meeting about the connection between drilling waste, hydraulic fracturing and earthquakes. University of Texas scientist Cliff Frolich is to present his findings that injection from Barnett Shale drilling in Texas is causing more earthquakes than previously thought (EnergyWire, Aug. 7), and researchers from Columbia's Lamont-Doherty Earth Observatory are to discuss a "swarm" of 82 earthquakes in 2011 in Youngstown, Ohio, that state officials have attributed to waste injection (EnergyWire, July 12).
The specific practice of hydraulic fracturing, as opposed to disposal of frack waste, has not been blamed for damaging earthquakes. But researchers from Oxford are to attend the meeting to discuss a magnitude-2.3 earthquake in England attributed to fracturing (EnergyWire, May 11).
'We're forced to conclude that these are induced'
Geologists have known for decades that deep injection of industrial waste can lubricate faults and unleash earthquakes. One of the most famous instances of man-made earthquakes, or "induced seismicity," occurred in the late 1960s at the Rocky Mountain Arsenal near Denver, where the Army manufactured chemical weapons.
Earlier this year, USGS scientists released a study saying that a "remarkable increase" in earthquakes in the middle of the country is "almost certainly man-made" and pointed to oil and gas-related activity as a likely culprit. Their findings, though, didn't mention the magnitude-5.3 earthquake in Colorado and specifically excluded the magnitude-5.6 rupture in Oklahoma.
But USGS, prompted by the Colorado earthquake, was re-examining the earthquakes there going back to a "swarm" in 2001. Seismologists at the agency put out a dozen new instruments and then went back into the data they had gathered in the past 10 years and said there is really no other explanation for the earthquakes there.
"They're not consistent with naturally caused earthquakes," said Arthur McGarr, chief of USGS's Branch of Earthquake Geology and Geophysics, based in Menlo Park, Calif. "We're forced to conclude that these are induced."
Matthews, Colorado's top geologist, is unconvinced. He said researchers should wait on more data being gathered by Irving, Texas-based Pioneer Natural Resources, the major driller in the area. He said the company has put 15 seismometers down holes in the area and is getting very precise readings.
"The data that industry is collecting is fascinating," Matthews said. "We've never had precision like that in Colorado before."
But Justin Rubinstein, who worked with McGarr and fellow USGS scientist Bill Ellsworth on the study, said USGS had no guarantee that it would ever be able to review the data and did not need to wait.
"We could have been waiting for nothing," he said Friday.
Waiting for more information
The Oklahoma earthquake, centered near the small city of Prague, would be the largest rupture to be linked to underground injection. But state officials have not concurred with Keranen's findings and are continuing to allow injection above the active Wilzetta Fault, which ruptured in November 2011.
"I don't see the definitive evidence," Austin Holland of the Oklahoma Geological Survey said Friday. "If we're going to claim an earthquake that caused damaged was triggered by human activity, we have to have clear scientific evidence."
The main driller in the area, Tulsa-based New Dominion LLC, says its injection could not have caused the earthquake.
"We feel very comfortable that any injection we're doing had nothing to do with the earthquake," said Jean Antonides, vice president of exploration for New Dominion.
He said the company has a wealth of data about its injection operations in the area that no researchers have asked for.
"You'd think people would ask for it," Antonides said.
Geoffrey Abers, the seismologist at Columbia's Lamont-Doherty Earth Observatory who worked with Keranen on the study, said the team would like more information. Primarily, they would like to get data from instruments placed deep underground, but that hasn't been possible.
Their study concludes that from the timing and proximity of the quake to injection operations, it was likely triggered by injection. The researchers have a wealth of data from surface seismometers because they started placing instruments a day before the earthquake, after a convulsion that proved to be a foreshock.
"Certainly, we'd encourage people trying to understand these things and regulate this to look into monitoring these wells at depth," Abers said.
HOUSTON -- Another inspection of the scene of the 2010 Deepwater Horizon drilling rig fire and oil leak is under way in the Gulf of Mexico to determine what's causing an oil slick found on the surface.
BP PLC and Transocean Ltd. are once again employing remote-operated vehicles (ROVs) to inspect the site and the wreckage lying a mile beneath the surface on the ocean floor where the Macondo well spilled nearly 5 million barrels of crude oil into the Gulf two years ago. The Coast Guard is monitoring the work.
The ROV investigation starting today is the latest in a series of surveys taken by the companies to monitor the site.
An investigation in October determined that an oil sheen near the site of the spill was caused by crude oil leaking from the old containment dome that's resting at the ocean bottom. BP first used the containment dome to try to stanch the uncontrolled flow of oil from Macondo.
BP crews plugged that leak, but Coast Guard officials say an oil sheen remains visible at the site. BP and Transocean developed a new plan to jointly determine the source of the sheen and ways to mitigate the pollution, which was submitted Nov. 9 for the Coast Guard to review.
The Coast Guard reported that it approved the plan Thursday.
"The plan calls for ROVs to inspect potential sources of oil in the vicinity of the Deepwater Horizon wellhead and rig wreckage to address the sheen that persists in the area," Coast Guard officials said in a statement. "In addition, Captain Duke Walker, Federal On-Scene Coordinator (FOSC) for the Deepwater Horizon oil spill response, tasked BP and Transocean with developing a comprehensive array of options for permanent remediation of oil that could still be contained within wreckage in the vicinity."
BP says the investigation starting today will have ROVs thoroughly inspecting the collapsed Deepwater Horizon rig and all other wrecked equipment located at the site, included crumpled riser piping. Representatives there declined to speculate on what may be causing the sheen that the Coast Guard grew concerned about in early November.
"A further investigation is planned to inspect the Deepwater Horizon rig and associated wreckage," BP spokesman Brett Clanton said in an email. "If it is identified as a potential source of sheen, we will work with the Coast Guard and rig owner Transocean to address the matter."
Last week, U.S. EPA announced that it was banning BP from participating in any new federal contracting, citing the company's "lack of business integrity." The move also prevents BP from bidding for acreage in new Gulf of Mexico leasing rounds (Greenwire, Nov. 28).
BP assured investors that the move does not affect any current BP government contracts or existing operations.
HOUSTON -- Oil field service companies may not have unseasonably warm weather in Canada to blame for depressed business there, according to an industry trade group.
Every year as spring and summer arrive, the oil and gas industry in Canada reports a steep drop in the number of active rigs there. The Canadian Association of Oilwell Drilling Contractors (CAODC) estimates that 14 percent or so of the rig fleet is active in May each year.
The reason: Conventional oil and gas drilling takes a hit when ice roads melt and frozen ground turns into thick mud. Oil sands operations are unaffected.
In October, Halliburton Co., Schlumberger Ltd. and Baker Hughes Inc. all reported third-quarter 2012 earnings that showed weaker North American profits. Enhanced drilling efficiencies were cited as reason for stalled business in the United States, but executives also complained of a longer-than-usual spring thaw in Canada for a tough operating environment there.
Schlumberger reported North American revenues declined by 2.3 percent over the previous quarter, while Halliburton said it experienced a 5 percent reduction in North American revenues, according to its CEO, David Lesar (EnergyWire, Oct. 22).
Baker Hughes executives also confirmed a tougher North American market for its products and services. The firm's chief financial officer, Peter Ragauss, said earnings were hit both by weak pressure pumping demand in the United States "coupled with Canadian activity being significantly lower than the third quarter last year."
These oil field service companies, along with Weatherford International Ltd., said the big reason for their downturn in Canada was an annual spring thaw that lasted much longer than usual. The melting and mud came earlier this year and lasted longer, even into fall when financial results were being tallied.
But according to the Canadian Association of Petroleum Producers (CAPP), that nation's 2012 spring thaw season was nothing exceptional compared with other years. CAPP believes other factors had more to do with this year's sharper rig count decline than a longer spring thaw, which the industry got used to long ago, they say.
"We do a lot of winter drilling, and if the thaw comes we lose a lot of those ice roads," said CAPP official Brad Herald in an interview. "But it does every year, and it's always a guessing game because it's the weather."
Herald said that besides heavy spring rains in southern Saskatchewan that interrupted drilling activity there, he sees no evidence that a longer warmer period across the country this year affected conventional oil and gas production compared with other years.
Natural gas output is down, but that is due to very low North American gas prices that Canadian producers are struggling to cope with, fueling investment in liquefied natural gas (LNG) export projects north of the border. CAPP estimates that more than half of the drilling rigs active in Canada are chasing oil, where in the past about 70 percent were targeting natural gas.
Conventional crude oil production is up by about 100,000 barrels per month so far for 2012, Herald said.
That overall activity is down sharply from last year is not in doubt. In its Nov. 16 North American rig count, Baker Hughes said that Canada was hosting 97 fewer active rigs than it was at around the same time last year.
But Herald believes that this year's lower rig count is due to the weak natural gas market, as well as factors that are driving down the rig count in the United States.
Baker Hughes data show 183 fewer rigs active in the United States this year compared with last. Oil field service providers and producers generally say the drop is because the market is increasingly competitive, and firms are winning contracts by reducing costs and dramatically improving the efficiency of drilling and hydraulic fracturing in the shale oil plays like the Eagle Ford Shale and the Bakken Shale.
Demand for pressure pumping is down because companies are figuring out how to fracture wells using less water or less pressure. Rig rates are dropping because wells can be drilled and completed faster than ever with some firms even shaving weeks off the time it used to take them to get a shale well horizontally drilled, fractured and flowing.
CAPP sees the same phenomenon occurring in conventional crude oil operations in Canada. Horizontal drilling is replacing lateral wells as the norm, and drillers are taking their drill bits deeper and farther horizontally through oil plays than what was common before.
Though his organization lacks firm data, Herald believes that, anecdotally, the spring thaw is arriving sooner and ending later than in the past. The difference is one to two weeks, however, and "it's been fairly predictable in its arrival," he said.
But the shift from gas to oil and more efficient drilling practices are probably what is making oil field service providers struggle somewhat in the Canadian market this year, he added.
"When I'm looking at our rig numbers, both the rig numbers and wells drilled, our wells drilled are dropping, but because of the long horizontals," Herald explained. "If you actually pull the yards drilled and things, we're spending as much money on fewer holes."
In its latest quarterly filing, Calgary-based Canadian Energy Services & Technology Corp. also reported that drilling activity had failed to rebound following the end of the spring breakup period. But rather than pointing to a longer-than-predicted spring thaw, that firm blamed slower business on the fact that "operators have scaled back drilling programs in the face of high costs, weaker netback prices, and reduced access to the capital markets."
Researchers at the University of Michigan are working with government regulators, energy industry heads and environmental groups to conduct a two-year study of hydraulic fracturing.
Michigan is home to the Collingwood and Antrim shales, among others, but fracturing has not taken off in Michigan to the degree it has in states like Pennsylvania, North Dakota and Texas.
"While there have been numerous scientific studies about hydraulic fracturing in the United States, none have been conducted with a focus on Michigan," John Callewaert, director of integrated assessment at UM's Graham Environmental Sustainability Institute, which is overseeing and funding the research, said in a statement.
The UM announcement came Wednesday, the same day Michigan Gov. Rick Snyder (R) released a policy blueprint calling for the state to increase its production of natural gas, which is one of the fuels drillers extract during fracturing, or fracking.
"Fracking is something that is very serious, and it needs to be done the right way," Snyder said in a statement. "Let's be at the forefront of being environmentally responsible when we look at these energy issues, and let's do this in a way where we're working together."
Environmental groups are largely opposed to fracturing, saying the process, which coaxes oil and gas out of buried shale layers via high-volume injections of chemical-laced fluids, poses a threat to air and groundwater.
UM's reports, which will be released for public comment early next year, will investigate those concerns and many others. Those reports will then be used as the basis for outlining environmental, economic, social and technological approaches to help stakeholders develop policies and practices for fracturing in Michigan.
The researchers will publish their overall findings and policy recommendations in 2014.
Stakeholders in the research effort have organized a steering committee to monitor the study's progress. The panel includes representatives from the Graham Institute, Michigan Department of Environmental Quality, Michigan Environmental Council, and Michigan Oil and Gas Association.
Some of those stakeholders are being pulled in as resources for the UM study, said Energy in Depth Field Director Erik Bauss, whom UM researchers have already called on to help facilitate a visit to a Michigan frack site.
The UM teams are also soliciting public input on their work through an online comment form on the Graham Institute website.
Former Pennsylvania Gov. Ed Rendell said his state's northern neighbor would be "crazy" to continue its ban on hydraulic fracturing.
Pennsylvania has seen a major economic boom from high-volume hydraulic fracturing for natural gas, and Rendell, a Democrat, said New York stands to lose out on similar benefits if officials pass on an opportunity to allow fracturing, or fracking, in their own state.
"New York would be crazy not to lift the moratorium" imposed by former Gov. David Paterson (D) in 2008, Rendell said. "I told Gov. [Andrew] Cuomo I would come to testify before any legislative committee. I told [Cuomo] it's a good thing to do."
The Empire State's Democratic governor this week extended by 90 days the deadline for adopting regulations on fracturing, which entails pumping water, sand and chemicals into underground shale fractures to bring oil and gas to the surface (EnergyWire, Nov. 29). Experts are still studying the controversial technique's possible impacts on public health.
To grant the extension, the New York Department of Environmental Conservation was required to issue revised proposed regulations, a move opponents of fracturing called "outrageous."
But Rendell's former environmental commissioner suggested it would be outrageous for New York to continue purchasing natural gas from other states without drilling for its own.
"I do find it stunningly hypocritical to buy gas that comes from fracking wells somewhere [else] in the U.S. and then say fracking is bad," said the former commissioner, John Hanger, who last week announced his intention to run for Pennsylvania governor (EnergyWire, Nov. 28).
He said natural gas is a cleaner choice than oil or coal.
"If you're saying no to gas, you're saying yes to more coal and oil," Hanger said.
New York's gas-rich Southern Tier, which borders Pennsylvania, is "not Park Avenue. They can use every job they can get," he said.
Cuomo's office declined to comment on Rendell's remarks. The governor has said he would like to base New York's decision on "facts and science" (Campanile/Kriss, New York Post, Nov. 30). -- PK
An ardent critic of Alberta's oil sands industry has been forced to resign from his Quebec Cabinet position following allegations of ethical transgressions.
Daniel Breton's move from environmental activist to environment minister lasted less than two months, and his exit last week removes one of the strongest left-wing voices from the centrist Cabinet.
Media reports said Breton faced legal problems including missed rent payments, unpaid speeding tickets and a 1988 conviction on employment-insurance-related fraud charges.
Those reports came as a legislative committee was already planning to probe a more recent case in which Breton was accused of interfering with an independent agency after taking office several weeks ago.
"I am [stepping down] because I don't want to be a hindrance to [Quebec Premier Pauline Marois'] work as well as the government's," Breton said.
In his statement, Breton said his personal-finance struggles have taught him what it's like to go through hard times. He said he will return to his work in his electoral district, which has poor neighborhoods.
"Showing compassion is what I will strive to do in the next few weeks and months," he said.
Although Cabinet members entered office with promises to crack down on Canada's quickly growing oil sands industry, a number of their pledges have since been shelved, delayed or diluted.
Breton's recent attack on a proposed oil pipeline is one example. He opposed Enbridge Inc.'s plan to reverse the flow of an existing pipeline to allow western oil to travel to eastern Canada, calling the move an Albertan attack on Quebec's control over its territory.
In a public statement several hours later, Breton cooled his tone, and within days, Marois was praising the economic benefits of Alberta's oil sands at a premiers conference. The premier is working with her Albertan counterpart, Alison Redford, to create a joint working group to study the Enbridge project, which is under review by Canada's National Energy Board.
Marois on Thursday defended her decision to appoint Breton. Details about his speeding tickets and the fraud conviction came up during his background check, but Breton's rent issues came to her attention only last week.
"Who hasn't had a fine for driving too fast? Who hasn't omitted to submit a certain report?" Marois said, referring to Breton's failure to file a tax return for a year when he had no income. "I believe I did the right thing naming him -- because of his expertise."
The premier said Breton came forth with an offer to resign after she discovered his consistent failure to make his rent payments. Breton said he risked becoming a political liability, and Marois said she agreed (Canadian Press/Toronto Star, Nov. 29). -- PK
Pangea LNG Holdings LLC has joined the fray of companies seeking to build facilities to liquefy U.S. natural gas and ship it overseas.
The company, part of Amsterdam-based Pangea LNG BV, announced Thursday it is seeking approval to export up to 8 million metric tons per year of LNG from a site along south Texas' La Quinta Ship Channel.
If the company wins regulatory approval, Pangea officials said, the project could be online by 2018.
Pangea plans to connect the plant to transmission pipelines in the region to ship out some of the excess gas produced in U.S. shale fields.
"We expect there to be several successful LNG export projects on the Texas coast in the coming years because of the large new natural gas reserves in North America," Pangea CEO Kathleen Eisbrenner said in a statement.
But those proposals will face regulatory hurdles and fresh scrutiny from the Obama administration, which is deciding whether -- and how much of -- the country's shale gas resources should be sent abroad.
The Energy Department has delayed decisions on companies' applications to export more than 16 billion cubic feet of LNG per day until the agency receives a study of the economic effects of such a move later this year. The Obama administration has hesitated to implement an energy strategy that could increase costs for American fuel consumers and stymie a resurgence in domestic manufacturing fed by relatively low natural gas prices.
The United States already sends some natural gas to some of its free-trade partners, such as Brazil and Mexico, but export advocates say those markets aren't large enough to keep planned LNG projects in business.
Although the Federal Energy Regulatory Commission would decide whether to approve Pangea's LNG plant, DOE would have final say over the company's proposed exports, which it would do on a case-by-case basis.
Pangea is planning to sell its LNG to U.S. free-trade partners, as well as other countries, including Asian markets, where the fossil fuel is priced three to five times higher than in the United States (Jennifer Dlouhy, Fuel Fix, Nov. 29). -- PK
The world's largest petrochemical producer is talking with U.S. firms about a possible investment to take advantage of the country's cheap shale gas, according to the company's CEO.
"We are evaluating opportunities in the U.S. in this area," said Mohamed Al-Mady, CEO of Saudi Basic Industries Corp. (Sabic). "We'd like to start with one plant, just to get ourselves in the region."
Abundant U.S. gas supplies, the result of the nation's recent shale boom, are a challenge to the competitive advantage long held by the fuel-rich Persian Gulf, where rapidly growing domestic consumption is eating into the region's own oil and gas stores.
In the past five years, that advantage has shifted to the United States.
Dow Chemical Co., ConocoPhillips Co., Chevron Corp. and Royal Dutch Shell PLC are among the companies looking to expand their petrochemical capacity to take advantage of cheap U.S. natural-gas-based feedstocks, such as ethane.
Prices for natural gas produced in the United States are about $3.75 per million British thermal units, down from more than $13 per MMBtu in 2008. U.S. ethane has fallen from about 90 cents a gallon last year to about 30 cents a gallon. Other natural gas liquids are also expected to remain cheap as rig counts increase.
It is "important that we participate" in the growth of the U.S. energy industry, Al-Mady said. Sabic is in talks with U.S. companies, with the goal of either forming a joint venture or making its own investment, he said.
The CEO did not say how much Sabic expects to invest. He added that the company is also looking for ways to develop feedstocks in Saudi Arabia.
"We will be investing and finding alternative ways to free that gas for our own use," Al-Mady said (Hall/Crooks, Financial Times [subscription required], Nov. 28). -- PK
What are the opportunities for bipartisanship on renewables heading into the next Congress? During today's OnPoint, Aaron Nelson, president and CEO of the Chapel Hill-Carrboro Chamber of Commerce in North Carolina, discusses the future of federal clean energy policy and his expectations for the wind production tax credit, which expires at the end of this year. Today's OnPoint will air at 10 a.m. EST.