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Energy companies say disposal wells are central to Oklahoma's oil, gas operations

Wastewater disposal wells, which some have linked to Oklahoma’s recent earthquake swarms, are an important part of the state’s oil and natural gas operations.
By Jay F. Marks, Business Writer Modified: July 6, 2014 at 3:00 pm •  Published: July 6, 2014

Oklahoma has shook, rattled and rolled through nearly 800 earthquakes in the past year, according to U.S. Geological Survey data.

That is more than enough for Cynde Collin-Clark, who is poised to leave her Edmond home for someplace without as much seismic activity.

“That’s all I can think to do anymore,” she said.

Questions remain about the source of Oklahoma’s earthquake swarm, but some studies have linked the temblors to wastewater disposal wells used by the oil and natural gas industry.

A number of area residents at a recent town hall meeting in Edmond called for a moratorium on disposal wells, although regulators said they do not have the authority to halt such activity. A seismologist with the Oklahoma Geological Survey also said additional data from disposal wells will benefit researchers.

Industry officials said disposal wells are a necessary part of oil and natural gas production, especially in Oklahoma.

A lot of water

Brian Woodard, the Oklahoma Independent Petroleum Association’s vice president of regulatory affairs, said water comes from the wellbore, along with oil and natural gas in areas like northern Oklahoma’s Mississippi Lime formation.

Wells there typically produce 10 times as much water as hydrocarbons over their lives, which can span decades. That leaves the industry to deal with a lot of water, considering the state produced about 10 million barrels of oil in April.

Produced water is many times saltier than ocean water. It also can contain toxic metals and radioactive substances.

“Water disposal underground is the most practical solution,” said Duane Grubert, executive vice president of investor relations at SandRidge Energy Inc., “given that water is produced from over a thousand square miles of productive acreage, and water treatment at the surface and subsequent transport of that water is both technically challenging and cost prohibitive.”

“Disposal remains the most economic method to date,” Grubert said. “Other treatment methods have yet to compete with what has been commonplace in the industry for decades.”

Other methods

SandRidge has built a massive water disposal operation in northern Oklahoma and southern Kansas, with the capacity to inject about 2 million barrels of water a day into deep underground formations.

The company currently disposes of about 1 million barrels of water a day, according to its presentation at last month’s RBC Capital Markets’ Global Energy and Power Conference in New York.

Woodard said producers have been diligent in trying to reuse water in hydraulic fracturing operations with an eye toward preserving fresh water, but produced water poses a more difficult challenge because of its sheer volume.

Oklahoma producers injected more than 1 billion gallons of water into the ground in 2012, according to regulators. The Oklahoma Corporation Commission is compiling data on disposal wells to analyze trends.

Officials acknowledge it is more expensive to treat produced water, but are reluctant to get into specifics.

“We consider operations-related information to be commercially sensitive so I can’t specifically discuss water treatment costs,” Marathon Oil Co. spokeswoman Lisa Singhania said. “What I can tell you is that Marathon Oil is committed to environmental stewardship, including the responsible use of water resources.

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Water disposal underground is the most practical solution. ... Disposal remains the most economic method to date. Other treatment methods have yet to compete with what has been commonplace in the industry for decades.”

Duane Grubert,
Executive vice president of investor relations

at SandRidge Energy Inc


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