The 4.5 magnitude earthquake that shook the Permian Basin on Monday night will likely increase regulatory pressure on regional energy producers to reduce or stop underground wastewater injections.
The tremor occurred near Stanton. It was the third-largest quake in Texas. Regulators have associated areawide earthquakes to the disposal of wastewater, a byproduct of oil and gas production. Wastewater injection can trigger quakes by changing pressures around fault lines.
It also comes shortly after the Texas Railroad Commission halted the injection of water into deep wells in an area northwest of Midland amid the rapid increase in seismic activity.
On Tuesday, the state’s oil industry regulator said it had been in contact with disposal well operators in the affected area and was sending inspectors to the facilities.
A suspension of injections around its epicenter could impact some 18 active wells that dispose an average of 9,600 bpd each, according to water data and analytics firm B3 Insight, according to a Reuters news report.
The affected area “has a higher utilization of deep disposal – about 50% higher – than other areas in the Permian basin,” said Kelly Bennett, CEO of B3.
Permian oil operators are seeking alternative methods to reduce wastewater injections after the oil regulator began imposing limits. Solutions include recycling the wastewater or trucking it elsewhere.
“If they’re not able to do that, they may have no other choice but to shut these wells and choke production,” said Thomas Jacob, vice president of oilfield services research for consultancy Rystad, adding that halting production was a last resort.
ConocoPhillips has 15 disposal wells in the region, where injections have been suspended. Pioneer Natural Resources has eight area disposal wells, according to Rystad. Chevron and Coterra have both experienced a reduction of 400,000 bpd or more in disposal capacity as a result of the limits imposed by the Railroad Commission.
Texas regulators are closely watching other regions that have seen a jump in seismicity and could implement additional limits to saltwater disposal, particularly as quakes get stronger, analysts cautioned.
“It will put more pressure on the operators” to find other ways to handle water,” said Fredrik Klaveness, CEO of NLB Water, which provides produced water treatment and recycling solutions for the oil industry.
