Wright: Oil, Water, Earthquakes and Opportunities

By Jim Wright

Over the last year, the oil and gas producing regions in Texas, including those in Permian Basin, have experienced an increase in seismic activity.

Seismic activity associated with the production of oil and gas is nothing new, and as the regulator for the oil and gas industry, the Railroad Commission of Texas monitors reports of seismic events throughout the state and maintains the authority to modify or suspend permits when necessary to protect the health and safety of our citizens.

The most probable culprit, according to seismologists, is the injection of saltwater into underground formations to dispose of it. This saltwater is produced in the oil and gas extraction process. During the production process this water is separated from the oil and often disposed of underground. These underground formations are often categorized into one of two groups based on their depth and referred to as shallow or deep.

Seismologists have determined it is the injection of water into the deeper formations that is likely responsible for the recent earthquakes in the Permian Basin. While deep injection is general a safe and commonly used disposal method for produced water, it has been linked to increased seismic activity when disposal wells are located on or near geological faults, as has been the case in previous seismic events in North Texas and Oklahoma.

In the case of the recent seismic activity in the Midland-Odessa area, the magnitude, frequency and proximity to the surrounding cities required swift action, and on Dec. 17, the Railroad Commission issued a notice to operators in the area to cease all deep injections until further notice.

While the commission’s response predated the most recent earthquakes, seismic experts warn that there is often a lag between saltwater injection and seismic movement, and it can take several months for the earthquakes to cease.

Where will this water go now that deep injection has been curtailed? The Railroad Commission is working with operators to expedite approval for additional shallow wells. Studies have shown that shallow injection is inherently less risky as it relates to seismic activity in the Midland-Odessa area, but increased volume in shallow formations presents its own long-term challenges. Primary among these concerns is the risk of over-pressurizing the formation and thus increasing the risk of blowing out plugged and abandoned wells.

So, what are we to do with this water if injecting in deep formations risks earthquakes and injecting water into shallow formations could lead to over-pressurizing the formation in the future?

For one, some of this water can be reused during the initial drilling and fracking of new wells. Many producers in the Permian already practice this form of recycling, although most estimate that even at peak operational efficiency this would only account for 40% of the water used in established wells. This is a worthwhile endeavor and should be applauded, but the inherent logistical challenges and overall volume means this is only a partial solution.

Thankfully, the Texas Legislature has recognized that the challenge of what to do with this produced water is an issue that deserves greater study, attention, and potential solutions. During the most recent legislative session, state Sen. Charles Perry, R-Lubbock, introduced legislation, which was signed into law by Gov. Greg Abbott, to create the Texas Produced Water Consortium administered through Texas Tech University. This will bring stakeholders and scholars together to study and review environmentally friendly and economically feasible solutions to use this resource.

Texas and the oil and gas producing regions in the Permian and Panhandle are no strangers to water shortages. The state’s rapidly increasing population and industrial growth has placed stress on our available water resources as human needs compete against resources long devoted to agricultural uses. The most logical long-term solution to balance these competing interests is to increase the available supply of water through new and previously unused sources.

The mission of the Railroad Commission is to “serve Texas by our stewardship of natural resources and the environment, our concern for personal and community safety, and our support of enhanced development and economic vitality for the benefit of Texans.” Through the Produced Water Consortium, it is my hope that Texas can find a workable solution that will reduce the potential of future seismic events by finding alternative, productive uses for the produced water generated during oil and gas extraction, such as agricultural irrigation for commodities such as cotton or enhancing natural vegetation.

A conservative businessman with over 35 years of experience in the energy industry, Jim Wright was elected as the 51^st Texas Railroad Commissioner in November 2020. He and his wife, Sherry, live in Orange Grove and have five children. Read more about Commissioner Wright here.