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Bloomberg's Barnett on Fracking Backlash in Oklahoma (Audio) · Bloomberg Intelligence

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  Speaker 1: The U S Geological Survey is examining whether the five
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  Speaker 1: point six magnitude earthquake that shook Oklahoma on Saturday was
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  Speaker 1: also tied for the strongest trembler ever recorded in the state,
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  Speaker 1: whether that earthquake was triggered by the underground disposal of
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  Speaker 1: wastewater from oil and gas production. Here to tell us
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  Speaker 1: more is Rob Barnett. He is Senior Energy policy analyst
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  Speaker 1: for Bloomberg Intelligence, providing unique and real time research and
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  Speaker 1: context for a variety of industries, and all of the
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  Speaker 1: markets and government factors that affect businesses are terminal. Customers
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  Speaker 1: can access this function by typing b I go, Rob Barnett.
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  Speaker 1: Thank you for being with us. The us GS going
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  Speaker 1: to examine this earthquake and these tremblers tell us. So
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  Speaker 1: what we know so far about the relationship between disposal
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  Speaker 1: of wastewater from oil and gas production and these kinds
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  Speaker 1: of natural or unnatural events. Well, the state's regulator, the
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  Speaker 1: Oklahoma Commissions Corporation, is already taking action. They're not waiting
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  Speaker 1: on the u s G as So, in the wake
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  Speaker 1: of the earthquake ake, which was a five point six
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  Speaker 1: magnitude on the Richter scale on Saturday, they issued an
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  Speaker 1: order requiring thirty seven wells to stop disposal or injection
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  Speaker 1: of this waste water. So, when you frack whales, you
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  Speaker 1: actually produce about ten times more UH kind of water
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  Speaker 1: stand other sediment than you do oil and gas, and
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  Speaker 1: you've got to put that somewhere. And the practice has
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  Speaker 1: been tied two earthquakes in Oklahoma, or at least the
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  Speaker 1: regulator there and that state believes so, and so they're
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  Speaker 1: they're taking action today. The number of earthquakes measuring three
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  Speaker 1: point oh Ohio reached at least eight hundred ninety last year,
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  Speaker 1: followed by about three d seventy this year through June, two,
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  Speaker 1: far cry from only two and two thousand eight before
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  Speaker 1: the fracking boom. So it doesn't seem too hard to
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  Speaker 1: make a connection, is it? Will it just be totally
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  Speaker 1: out of the question now too expensive and how in
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  Speaker 1: the heck would you do it? Anyway? For company needs
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  Speaker 1: not to inject the wastewater back into the earth, but
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  Speaker 1: find into something else to do with it. Right, there
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  Speaker 1: are a number of options, so you don't have to
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  Speaker 1: always inject. You can treat the water. The problem though,
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  Speaker 1: is that some of the other options are more expensive,
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  Speaker 1: and so the common practice has been to do this
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  Speaker 1: wastewater injection because it's the most economic. And so if
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  Speaker 1: the state regulator really continues to hammer away on this
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  Speaker 1: point and put additional regulations in place, it will force
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  Speaker 1: the industry to really take those other options more seriously.
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  Speaker 1: If if they're going to continue to produce at the
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  Speaker 1: kind of volumes that they've been in Oklahoma, and perhaps
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  Speaker 1: neighboring states too. It's not there's nothing special about the
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  Speaker 1: geology of Oklahoma. Other states are wrestling with this same
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  Speaker 1: kind of issue right now too, right and then, and
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  Speaker 1: the geology of Oklahoma is sort of getting new attention
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  Speaker 1: because this most recent earthquake was on a fault line
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  Speaker 1: that had been previously unknown. That's right, But not all
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  Speaker 1: regulators in all states see it the same way. Texas
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  Speaker 1: has been looking at the issue as well, and their
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  Speaker 1: their commission in their state basically said that they don't
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  Speaker 1: think that there's anything to the connection between earthquakes and
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  Speaker 1: wastewater disposals. So really is a big mismatch between kind
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  Speaker 1: of where the science is, where the regulators are, and
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  Speaker 1: right now it's completely a game that is being handled
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  Speaker 1: by the states. The federal government really hasn't taken a
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  Speaker 1: strong view on this, and there really isn't regulatory authority
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  Speaker 1: coming from Washington on this. It's all being managed by
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  Speaker 1: the states right now. Is there less of it? We
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  Speaker 1: I just read the numbers on the increase in earthquakes
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  Speaker 1: since two thousand eight in Oklahoma. Has Texas not had
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  Speaker 1: a similarly proportionately large increase in the number of earthquakes
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  Speaker 1: they've experienced since they started doing a lot more fracking
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  Speaker 1: and injecting the wastewater back into the ground. The geology
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  Speaker 1: does matter, so uh there there has been an uptick
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  Speaker 1: in many of the places that are doing uh this
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  Speaker 1: oil and gas exploration. But the the I guess it's
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  Speaker 1: it's all about how whether you believe in correlation causation.
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  Speaker 1: I mean, but they had this kind of big jump
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  Speaker 1: in earthquakes in Texas or As, Oklahoma been much more
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  Speaker 1: susceptible to this. Oklahoma has been particularly susceptible. So other states,
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  Speaker 1: while they're experiencing the issue, they haven't had the same
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  Speaker 1: staggering increase that you mentioned just a few minutes ago.
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  Speaker 1: So Oklahoma is particularly put prone to this problem. But
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  Speaker 1: it is an issue in other states as well. It's
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  Speaker 1: not not specifically there, but the big the big jump
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  Speaker 1: that you would see, I mean, depending on how you
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  Speaker 1: cut the number. Oklahoma had three into thousand and five
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  Speaker 1: that were greater than two point five magnitude, and they
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  Speaker 1: had twenty five hundred last year. So complete order of
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  Speaker 1: magnitude to orders of magnitude increase in a very short
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  Speaker 1: amount of time. That's tied to fracking in the state
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  Speaker 1: and greater oil and gas production. Other states haven't had
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  Speaker 1: that same order of magnitude increase, but there is. It's
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  Speaker 1: it's not specific to Oklahoma, but it's Oklahoma is a
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  Speaker 1: hot spot for the topic. Sure sounds like and there's
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  Speaker 1: someone who grew up in earthquake country out in Washington State.
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  Speaker 1: I can just imagine when it feels to go from
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  Speaker 1: almost no earthquakes to several. Rob Barnett, thank you so
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  Speaker 1: very much, part of our Bloomberg Intelligence team in Washington,
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  Speaker 1: d C. Senior energy policy analysts for b I. This
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