published Dec 5, 2018, 4:38:03 PM, by Ryan Collins and David Wethe
(Bloomberg) —

Texas is considering new restrictions on how shale explorers dispose of wastewater from oil drilling as earthquakes rattle the largest oil-producing American state.

The new rules would target how much and at what pressure briny water that emerges from oil wells is injected back into the ground, Jared Craighead, chief of staff for the Texas Railroad Commission, said by telephone Wednesday. The rules haven’t been finalized amid ongoing talks that include representatives from academia and the shale industry.

The restrictions may be released within weeks, Craighead said. A negative side effect of the shale boom has been a huge increase in volumes of contaminated water that are typically disposed of in so-called injection wells. In cases where those wells touch fault lines, earthquakes have flourished. Neighboring Oklahoma began clamping down on injection wells in recent years after a massive increase in the number and intensity of quakes.

“We’re being very diligent and sensitive to concerns regarding seismicity,” Craighead said. “We are definitely doing things to provide more scientific basis for our decisions as it relates to permitting saltwater disposal.”’

Oklahoma forced oil explorers to throttle back the speed and volume of their wastewater disposal after earthquakes surged from 2 in 2008 to nearly 900 seven years later. In some cases, state regulators ordered disposal wells there to shut completely.

Quakes Triple

In the Permian Basin, where America’s busiest oil patch produces enough dirty water in a year to cover Rhode Island nearly a foot deep, the costly treatment and disposal has given rise to a more specialized water-handling industry.

At the same time, earthquakes in the Permian region of West Texas and New Mexico have tripled to more than 60 in a year, according to the U.S. Geological Survey. The Permian hosts more than half of all the rigs drilling for crude in the U.S., according to Baker Hughes.

The commission is particularly interested in Reeves County in the epicenter of Permian shale, Craighead said. The county is home to wells drilled by marquee explorers such as EOG Resources Inc., Concho Resources Inc. and Occidental Petroleum Corp.

Representatives of EOG, Concho and Occidental didn’t immediately respond to messages seeking comment. The Texas Oil and Gas Association, whose membership includes the likes of Exxon Mobil Corp. and Pioneer Natural Resources Co., didn’t immediately return a voicemail.

The new rules are likely to lead to more special conditions on drilling permits that could limit an operator’s ability on pressure and volume, but that will be done case-by-case, Craighead said.

-With assistance from Kevin Crowley and Rachel Adams-Heard.To contact the reporters on this story: Ryan Collins in Houston at rcollins74@bloomberg.net ;David Wethe in Houston at dwethe@bloomberg.net To contact the editors responsible for this story: Simon Casey at scasey4@bloomberg.net Joe Carroll, Carlos Caminada
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