American Oil and Gas Reporter - May 2016 - 85

OIPA Helps State Grasp Seismic Issue
OKLAHOMA CITY-Public fears arising from seismic events in Oklahoma
have led to curtailed injection volumes
in scores of disposal wells, with almost
100 shut in, published reports indicate.
In the past three years, the Oklahoma
Corporation Commission has taken more
than two dozen actions to deal with
earthquakes, while in 2014, Governor
Mary Fallin created the Governor's Council on Seismic Activity, made up of
experts within state government and the
private sector, to examine the issue of
induced seismicity and how best to deal
with it.
The Oklahoma Independent Petroleum Association is responding to concerns that wastewater disposal has contributed to a swarm of earthquakes in
the Sooner State during the past few
years, observes association Chairman
Jeffery McDougall.
"We have engaged by trying to improve
understanding of the issue and helping
efforts to come up with a solution," describes McDougall, president of Oklahoma City-based JMA Energy Company
LLC.
Sharing Data, Expertise
Part of the OIPA's contribution, says
Vice President of Regulatory Affairs A.J.
Ferate, has come from the work of OIPA's
Seismicity Committee, led by OIPA West
Vice Chairman Kim Hatfield of Crawley
Petroleum in Oklahoma City. "He has
done a great job coordinating with industry
representatives and me, and bringing us
together with government officials," Ferate
praises. "That has helped the state in its
search for solutions that are based on
science instead of hasty conclusions."
McDougall affirms that OIPA's Seismicity Committee has been at the forefront
of the issue for three years, and he notes
that its contributions include providing
the OCC and Oklahoma Geological Survey
with data from member companies as
well as expert analysis.
"Hatfield very well may be one of the
foremost experts on seismicity not only
in the industry, but in the country," McDougall suggests. "OIPA and its members
have assisted the OCC and the OGS with
massive volumes of data. We have contributed to understanding and have helped
arrive at the solutions. There has been a
measured approach to slowing injection
and looking for responses in which earthquakes are not a problem."
OIPA President Mike Terry praises
Governor Fallin's role in helping the state

address the matter in a way that is both
prudent and effective. "She has done it
the right way, not going too far, but allowing OCC and others to do their jobs
according to scientific findings," he assesses. "I always have said that the industry's tremendous amount of scientific
knowledge eventually would allow it to
find solutions, and I think she understands
that.
"No one can simply turn a key and
make this go away," he adds. "It did not
come about overnight and it is not going
to be resolved overnight, but I am very
pleased not only with how the government
has handled it, but our members, too."
He says that is because the difficult
market in which the industry finds itself
makes it arguably the least convenient
time for producers to curtail production
and the accompanying produced fluids.
Despite many companies' desperate need
for revenue, Terry notes, most operators
have complied readily with the OCC's
areawide volume reduction orders (VROs).
A March 7 VRO covered 406 Arbuckle
disposal wells across 5,200 square miles,
with a goal of reducing injection volumes
in that area to 40 percent below 2014
levels (AOGR, April 2016, pg. 18).
"For the most part, industry has complied, based on the understanding that
finding a solution means we have to try
some things," Terry describes. "Most of
Oklahoma's activity is in the northern
part of the state, where a lot of water is
being produced and must be disposed of.
We have found some ways to take care
of that water and will find more, either
by disposing of it elsewhere or by cleaning
it up with new technology."
Ferate points out that some companies
only produce in that part of the state. "It
has constrained some of those companies,
but fortunately, we have seen very few

bankruptcies," he says. "It can make times
really tough if you add the additional
costs that companies have to bear because
of seismic issues on top of all the other
economic issues."
Seismic Opportunism
McDougall says complicating the matter is the extent to which oil and gas opponents seek to capitalize on the public's
concerns while depicting oil and gas
companies as insensitive to them. Nothing
could be further than the truth, he assures.
"I live in Oklahoma City and can feel
the earthquakes at my home," he notes.
"Some environmentalists enjoy any topic
that gives them an opportunity to shed a
bad light on oil and gas. It is more piling
on."
Ferate recalls a lot of anxiety in the
Oklahoma City area in late 2015 when
seismic activity was especially frequent.
"There was a lot of anxiety, but now that
the quakes have dropped off, that has
waned as well," he reflects. "It does not
mean that cannot come back immediately
if we start to have more earthquakes.
Some continue to try to raise alarm about
the issue because they see this as an opportunity to oppose the industry. However,
I think cooler heads are going to prevail."
Terry predicts efforts to stoke public
backlash against oil and gas activities
will find limited purchase in Oklahoma
soil.
"Most Oklahomans appreciate the industry's importance," he maintains. "They
have friends and relatives working in the
industry; they know it is the backbone of
our economy and how much it contributes
to museums, universities and a lot of
other good things. And we in the industry
live here, too, so we are not complacent
about finding a solution."
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