A 4.4 magnitude earthquake that shook the largest U.S. shale field on April 10 could lead to further restrictions on how operators there can dispose of saltwater associated with their oil and gas production, analysts said.
The quake was the largest yet in the Stanton Seismic Response Area (SRA), a swath of the Permian Basin near Midland, Texas, where regulators were already monitoring seismic activity linked to disposal of saltwater, a natural byproduct of oil and gas production.
The Railroad Commission of Texas (RRC), which regulates the state's oil and natural gas industry, in 2022 developed a plan that aimed to prevent earthquakes measuring over magnitude 3.5 in that area by mid-May of this year.
Some deepwater disposal wells in the Stanton area were already shut as part of that plan.
"The only risk is that the event will trigger an expansion of the SRA," said Kelly Bennett, CEO of water analytics firm B3 Insights, adding that production in the area is unlikely to be affected.
The RRC in January of this year banned saltwater disposal injection in a separate part of the Permian, called the Northern Culberson-Reeves Seismic Response Area, after a series of seven earthquakes measuring up to magnitude 5.2 occurred in a span of just five weeks towards the end of last year.
That ban applied to 23 disposal wells in the area and impacted producers including Chevron, BP and Coterra Energy.
It unclear whether the RRC will enforce additional restrictions in Stanton after the April 10 earthquake, said Laura Capper, CEO of EnergyMakers Advisory Group, a water management and risk mitigation consultancy.
"But that was a noteworthy magnitude we wish to avoid," she added.
Recommended Reading
Venture Global Acquires Nine LNG-powered Vessels
2024-03-18 - Venture Global plans to deliver the vessels, which are currently under construction in South Korea, starting later this year.
Imperial Oil Shuts Down Fuel Pipeline in Central Canada
2024-03-18 - Supplies on the Winnipeg regional line will be rerouted for three months.
Hess Midstream Subsidiary to Buy Back $100MM of Class B Units
2024-03-13 - Hess Midstream subsidiary Hess Midstream Operations will repurchase approximately 2 million Class B units equal to 1.2% of the company.
Pembina Pipeline Enters Ethane-Supply Agreement, Slow Walks LNG Project
2024-02-26 - Canadian midstream company Pembina Pipeline also said it would hold off on new LNG terminal decision in a fourth quarter earnings call.
TC Energy's Keystone Oil Pipeline Offline Due to Operational Issues, Sources Say
2024-03-07 - TC Energy's Keystone oil pipeline is offline due to operational issues, cutting off a major conduit of Canadian oil to the U.S.