Quake concerns growing

Growing concerns about earthquakes in the Permian Basin caused by wells oil and gas operators use to dispose of wastewater led Texas regulators to curtail the allowed amount of water being injected and block any new such wells in the Midland area.

In New Mexico's side of the prolific oil and gas region, regulators said they've also noticed an uptick in seismic activity blamed on the oil and gas sector and its traditional method of water disposal.

Recently, oil and gas boomed in the Permian - which stretches between southeast New Mexico and West Texas - driven by the expanded use of hydraulic fracturing and horizontal drilling allowing operators to target deeper and harder-to-reach shale deposits.

The fracking process, which involves pumping a mixture of water, sand and chemicals underground to break up rock formations so oil and gas can be extracted, was tied to a small amount of seismicity.

That deeper shale also produces more water along with oil and natural gas - up to 10, 42-gallon barrels per barrel of oil - which is widely disposed of by injecting back underground.

This activity is the main culprit for the recent spike in earthquakes, scientists contended, creating a dramatic increase in small earthquakes in southeast New Mexico, increasing from a couple dozen magnitude 1 or 2 per year to more than 100 in the last year.

Earthquakes at a magnitude of 2.5 or more also increased, records show, with 12 in the past year compared with one or less in previous years.

Magnitudes above 2.5 are often felt but are known to cause only minor damage, while severe damage isn't likely until a magnitude 6 or more occurs.

A study published this summer by New Mexico Tech showed earthquakes in Texas could still impact New Mexicans as an M5 quake reported in Mentone, Texas, just over the border was felt by people in Carlsbad and as far west as El Paso.

Following that event, an M3 was recorded in Lovington on June 28, 2020, followed by a cluster of 70 smaller quakes, the study read.

Previous clusters dating back to 2010 appeared to align with spikes or booms in oil and gas production, the study read, throughout the region in both states.

"The majority of the recent seismicity in the Delaware Basin has occurred in Texas, although earthquake activity has also risen in New Mexico," the study read.

'Not moving in the right direction'

Mairi Litherland, a staff researcher and manager of New Mexico Tech's Seismic Network, said the rash of smaller earthquakes can be indicative of a growing problem.

"We're not moving in the right direction. It is something we need to keep monitoring and start taking precautions," Litherland said. "We're in better shape than a lot of places that have serious issues. There's a potential we could become like a lot of those places if we don't take what actions we need to be taking."

Data from the U.S. Geological Survey (USGS) earthquake database showed one earthquake at a magnitude 4 this year in southeast New Mexico recorded on July 19 near Malaga, a ranching community south of Carlsbad recently the site of increasing dense oil and gas development.

Meanwhile, 10 earthquakes at magnitudes of 2.5 or greater were reported so far this year in the region, already more than half of similar quakes reported in all of 2020.

Only three magnitude 2.5 or greater quakes were reported by the USGS in 2019.

Things are getting worse, Litherland said, but not as bad in New Mexico as in Oklahoma or the Gardendale area near Midland, which was subject to the Railroad Commission's recent restrictions.

But without proactive reductions in wastewater injection, Litherland worried New Mexico could be next.

"It's not every well, but it's hard to predict exactly which well is going to cause issues. Especially with large volumes of injection, people start to see more seismicity," she said. "It's something that is happening in many places around the world and something we believe we're seeing in New Mexico as well."

So far, Litherland said, southeast New Mexico's earthquakes occurred in remote areas.

"We've been fortunate that the earthquakes we've seen have not been close to population centers," she said. "That's fortunate in that there's not as much risk but we still want to keep that under control. These operations, we know that they're inducing earthquakes."

That same solace in proximity no longer holds true in Texas.

A 'proactive' approach to earthquake problem

The Gardendale Area in the Permian Basin located in Texas experienced six earthquakes since February 2020 at M 3.5 or greater, per the Railroad Commission, with quakes coming closer to the city as a M 3.7 was reported about eight miles northwest of Midland.

That's what led the agency to place the restrictions on injection wells, expecting the new rules to impact 76 such facilities in the area and stay in place for about a year.

Similar regulatory mandates are something Adrienne Sandoval, director of New Mexico's Oil Conservation Division (OCD), the state's main oil and gas regulatory agency, hopes to avoid.

She said the Division works closely with operators to space out wells to reduce geological pressure and identify when voluntary curtailments are needed.

"If we can be proactive and avoid having to do mechanisms like that, it's always the goal," she said. "Where we need to take some action like that, we will if needed. What Texas did is based on the activity that they saw over a significant period of time."

OCD also worked with New Mexico Tech for the last year and a half, studying the growing impact of injection wells on seismic activity throughout the region.

"A lot of these are situated around fault systems. The fault system in the Gardendale area is going to be different than in southeast New Mexico," Sandoval said. "We're trying to be proactive. What we're seeing over there in Gardendale is becoming a need to be reactive."

Multiple operators inject on both sides of the state line, she said, and that while the worsening situation in Texas was likely to directly trigger similar effects in New Mexico, it could be sign of things to come and impact the operations of oil and gas companies.

"What we want to do is make sure operations are set up in a way to mitigate it as much as possible," Sandoval said. "We recognize we have had seismic activity in N.M. We want to mitigate it before it turns into something more."

Aside from requirements in place to ensure safe disposal injection, New Mexico regulators also engaged in a broader goal to see oil and gas companies recycle produced water through treatment and reuse it in subsequent drilling operations - a move that could reduce seismicity and address water scarcity issues in the region.

"This is not something most operators are unfamiliar with. Many have also operated in Oklahoma," Sandoval said. "In general, we are encouraging operators to recycle as much water as possible. That takes strain off of our water resources."

With disposal injection appearing to be more and more dangerous, some companies in the water midstream sector of the oil and gas operations chain began to rethink how water is managed in the industry.

Companies like Breakwater Midstream began devising systems to move water away from areas known for heavy induced seismicity, treating it and returning it to operators for subsequent drilling operations.

It's a process Breakwater Chief Executive Officer Jason Jennaro said is becoming increasingly necessary as production grows and the problem threatens to get worse.

He said Breakwater operates water recycling facilities at well locations and has 10 commercial-scale facilities in the Midland Basin area which allow for multiple operators to ship in water for treatment and to have the water shipped back out to the field.

The company recently opened its Big Spring recycling facility in the area, which can treat up to 300,000 barrels of produced water per day, adding to the company's total capacity of 10 million barrels a month.

This can not only curb the use of freshwater in the arid region Jennaro said, but also reduce volumes of water going down hole, which can trigger earthquakes.

"There is a tremendous amount of produced water that is being wasted and disposed of into deep well injectors. That has consequences," he said. "It's starting to make people look harder at sustainable options besides disposal."

In addition to recycling, Breakwater also sought to provide more of its treated water to operators using a system of pipelines that can transport the water around the basin, further reducing freshwater use and re-injection.

"We want to give operators options. We attempt to recycle every barrel and move it to a completion," Jennaro said. "What this also allows us to do is move those barrels elsewhere. We can move them to areas that are potentially less seismically active."

And while this changing philosophy on water handling could prove a lucrative business model, Jennaro argued it will also make oil and gas extraction more sustainable by mitigating the problem of earthquakes and water scarcity.

"We think there's definitely a business opportunity. But we did these because we believe we'll be on the right side of history," he said.

"We felt this was more economical for operators and more sustainable. In the Permian Basin, seismicity is growing exponentially. That's the principle reason why regulators are starting to look at it."