Earthquakes greater than 2.0 magnitude increased over 8x in the Permian Basin from 2019 to 2021. Earthquakes greater than 3.0 increased over 20x in that same period.

In December 2021 we saw a record-breaking 4.5M quake north of Stanton.

There are many possible causes of earthquakes, or seismicity. Many, of course, are naturally occurring from tectonic forces. Some quakes can be human-induced, and this is called “induced seismicity.” Seismicity may be induced by depletion of subsurface fluids, by hydraulic fracturing activity, by the collapse of subsurface mines or caverns or by the high-pressure injection of fluids into subsurface formations that intersect with geologic fault lines that have a high fault slip potential (FSP). For any given seismic event, it can be difficult or impossible to attribute a specific causal source.

Nonetheless, in many cases, saltwater disposals (SWDs), which inject oilfield wastewater at high pressures back into the subsurface where it came from, have been implicated in nearby seismic events, particularly in the recent rise of seismicity in the Permian Basin.

Starting in September 2021, in response to increases in 3.0 magnitude and larger seismic events in the Midland-Odessa area and in the Northern Delaware Basin near the Texas-New Mexico border, the Texas Railroad Commission has ordered additional reporting, permitted volume reductions and even total shut-ins of many SWDs near high seismic activity areas, now called “Seismic Response Areas” (SRAs). The specific RRC actions are described on their website, linked here.

In the first case, in September 2021 after a cluster of 3.5M earthquakes around Midland, the RRC took an area called the Gardendale District around Midland and Odessa and reduced permitted daily injection capacity to 10,000 barrels per day for all 76 SWDs in the area (of which only 43 were active), regardless of the original approved permit amount, which in many cases was much higher than 10,000 BBL/day. They also put a moratorium on all new disposal permits in this area for at least one year.

In October 2021, a second SRA was put in place for the Northern Culberson-Reeves area after a series of larger earthquakes there. The NCR SRA reduced the permitted capacity of 89 SWDs.

In December 2021, after more earthquakes around Midland, the RRC ordered seven deep injection SWDs in Gardendale to shut-in. On December 17, it ordered all 33 deep injection SWDs in Gardendale to shut-in. 

You can see on this heat map exactly where those seismic event hotspots are located (the red masses). The red circles represent where Sourcenergy has mapped out SRA boundaries and their different levels of impact.

The TX RRC also has something called a “Seismic Investigation Region” (SIR) which are areas of higher trending seismic activity under investigation for possible new SRAs. 

SWD capacity reductions and shut-ins don’t just affect SWD operators – some of whom are commercial water midstream companies – it also affects the oil and gas producers, the E&P companies, who produce oil that comes up with flowback and naturally-occurring produced water that needs to be recycled or disposed of. Many producers own SWDs and many send their water to a mix of their own SWDs, their own waterflood or enhanced oil recovery (EOR) injection wells, and third-party commercial SWDs.

The Permian Basin is a relative high water-to-oil ratio play, particularly in the Delaware Basin, where an 8:1 water-to-oil ratio is common. In the Midland Basin a 4:1 ratio is common, though the actual ratios vary widely with the vintage of the well, the formation of production, the timing and amount of water injected during fracturing, and many other factors.

Up until about 2014, most produced water was sent to SWDs via trucks. Water management was often the largest or even the majority lease operating expense for newer onshore unconventional wells. But since that time most operators have built water pipeline networks or entered into contracts with water midstream companies that have built water pipelines to take water from producing leases to SWDs. Moving water to SWDs by pipe costs far less per barrel than moving water by trucks – excluding the capital cost of building the pipelines. But if a water pipeline only connects to SWDs that are reduced in capacity or shut down by the SRA, the produced water might have to be put back into trucks, increasing production costs by a huge multiple for the operator or causing huge losses for a water midstream company still obliged to take the water even by truck or a longer distance pipeline.

SRAs also affect mineral owners because if operators choose to reduce oil production or new completions in high disposal cost SRAs, then there are no royalties to pay for the lost barrels.

SRAs also affect water treatment and recycling companies because reduced disposal capacity creates more incentive and more opportunities to recycle water back into new fracs. The result of which is also less water going to SWDs.

Not to be ignored, SRAs also create new opportunities for SWD owners who are near SRA-impacted SWDs but have not been impacted themselves. These SWD owners could identify water supply chains disrupted by SRAs and take that business for themselves.

How do we find, measure and reduce seismic risk?