Oil and Gas Lawyer Blog
Energywire has been following the political implications of the University of Oklahoma’s study of the causes behind the huge increase in earthquakes in Oklahoma, and OU’s relationship with Harold Hamm, CEO of Continental Resources. In a recent investigative article, Energywire reported that “University of Oklahoma officials were seeking a $25 million donation from billionaire oilman Harold Hamm last year, records show, at a time when scientists at the school were formulating the state’s position on oil drilling and earthquakes.” OU initially “came up with a position that squared with Hamm’s, saying most of the hundreds of earthquakes rattling the state are natural and not caused by the oil industry.” Hamm turned down the donation request, and OU’s Geological Survey subsequently changed its position and now says that most earthquakes in Oklahoma are “very likely” triggered by oil and gas activities.
Earthquakes in Oklahoma have increased from 20 with a magnitude of 3.0 or greater in 2009 to 585 in 2014, and Oklahoma is now expected to have more than 800 such quakes this year.
OU’s president, David Boren, a former senator, serves with Hamm on Continental’s board of directors and according to Energywire has received $1.6 million from the company since 2009. Hamm has pressured OU to avoid linking quakes to injection of produced water in Oklahoma.
Meanwhile, here in Texas, scientists from Southern Methodist University issued a peer-reviewed study of quakes around the town of Azle in the Barnett Shale, concluding that quakes there were probably caused by two salt water disposal wells near the town. Those scientists recently participated in a panel discussion about earthquake activity in Texas organized by Railroad Commissioner Ryan Sitton. In response to the SMU study, the RRC scheduled two hearings, requiring the operators of those SWD wells, Enervest and XTO, to appear and show cause why their disposal wells should not be shut down.
RRC show-cause hearings are conducted before hearings examiners, who act as administrative law judges and make recommended decisions to the commissioners. At the Enervest and XTO hearings, the companies offered sworn testimony and arguments that SMU’s study was flawed and that their disposal wells did not cause the Azle quakes. The examiners admitted the SMU study as evidence over the objections of the companies’ attorneys. No SMU scientist appeared at the hearings. The examiners have not yet issued their proposal for decision.
Separately, the RRC concluded that disposal wells in Johnson County, also in the Barnett Shale, were not the cause of a 4.0 magnitude quake in that county on May 7. After the quake, the RRC ordered five disposal wells in the area shut down for testing. After analysis of the tests, the RRC issued a statement, concluding: “At this time, there is no conclusive evidence the disposal wells tested were a causal factor in the May 7 seismic event. The tests were conducted to help determine the effect of injection operations on pressures within subsurface rock formations.”
Science and politics do not make good bedfellows.