3 Technologies at Risk From Oil and Gas' Earthquake Problem

This week, ranking Democrats on the House Energy and Commerce and Natural Resources Committees sent a letter to the committees' Republican chairs, asking them to hold a hearing on the deep injection of drilling waste and its connection to man-made earthquakes. This request came in response to several recent studies from credible sources that find an increase in seismic activity in certain U.S. regions, and identify the oil and gas industry's injection operations as likely causes.

Just a little pinprick ...
There are several reasons why the industry injects various materials deep into the earth. Three particular technologies are especially relevant.

1. Hydraulic fracturing, or fracking, creates a significant amount of wastewater. It's fairly standard practice for fracking companies to dispose of this wastewater by injecting it deep underground.

2. Enhanced Oil Recovery, or EOR, is the process by which carbon dioxide is injected into an existing oil well to force otherwise trapped pockets of oil out of their crevices. It essentially enhances the efficiency and yield of oil drilling.

3. Carbon Capture and Sequestration, or CCS, is an early-stage technology that captures carbon at its point of generation, removes it, and typically stores it underground. CCS is broadly considered to be a critical tool in constraining climate change.

All three technologies offer the potential to curb some of the world's most prolific carbon outputs, and all three would be at risk if they were responsible for earthquakes.

The science
The United States Geological Survey this October linked what it's calling an earthquake "swarm" in Oklahoma to underground injection activities. Some of Oklahoma's biggest oil and gas operators -- including SandRidge Energy (NYSE: SD  ) , Devon Energy (NYSE: DVN  ) , and Apache (NYSE: APA  ) -- have declined multiple requests from various media outlets for comment on the subject.

This November, the Proceedings of the National Academy of Sciences correlated a series of earthquakes in Texas between 2009 and 2011 with underground carbon dioxide injection. Chesapeake Energy (NYSE: CHK  ) had to shut down three separate wells in that vicinity in 2009 because of the wells' specific connection with seismic activity. Nonetheless, Chesapeake Energy also declined the same media requests for comment.

Most recently, state and local officials in Azle, Texas, have asked the oil and gas industry to look into a series of small but frequent earthquakes that started this November. XTO Energy, an ExxonMobil (NYSE: XOM  ) subsidiary, operates one of the three wells closet to Azle. When asked to comment, an XTO representative simply said that the well had had "no trouble" in four years of operation.

Three potentially important technologies -- fracking, EOR, and CCS -- are at risk, and the industry is failing to manage the potential fallout. What's more, the oil and gas industry should know better, because it horribly bungled public relations over fracking. Watch the following video to learn more about the implications of induced seismicity.

Free advice on a solid energy play
There's a great play in the oil and gas space that you deserve to know about. Imagine a company that rents a very specific and valuable piece of machinery for $41,000 per hour. (That's almost as much as the average American makes in a year!) And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report reveals the company we're calling OPEC's Worst Nightmare. Just click here to uncover the name of this industry-leading stock, and join Buffett in his quest for a veritable landslide of profits!


Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 2773765, ~/Articles/ArticleHandler.aspx, 7/31/2014 10:31:51 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement