Researchers studying link between earthquakes, oil development

Our NewsOK Energy team chatted with readers Tuesday about the recent swarm of earthquakes in Oklahoma. 

by Jay F. Marks and Adam Wilmoth and Paul Monies Modified: November 12, 2013 at 11:10 am •  Published: November 12, 2013
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Our NewsOK Energy team chatted with readers Tuesday about the recent swarm of earthquakes in Oklahoma. 

You can join our energy Q&A’s on the second Tuesday of every month at 10 a.m. and submit your questions about energy companies and developments across the state. Below is an unedited transcript of Tuesday's chat.

Paul Monies 9:40 a.m. Hello, all. Welcome to the Energy chat. We'll be starting in 20 minutes, but you can submit your questions now.
Paul Monies 9:55 a.m. We'll start in 5 minutes. Let us know if you have any questions about oil and gas, wind, or local energy companies and their plans.
Paul Monies 10:01 a.m. OK, thanks for joining us. Let's get started.
Matt 10:01 a.m. I have leased my mineral rights to Sandridge Energy for a 3 year term, with a 2 year option. My 3 year lease expires in January. What are the chances that the 2 year option is renewed? If it is not renewed, can a lease with a new company with new leasing terms?
Paul Monies 10:04 a.m. We'll have to issue the standard disclaimer that we can't offer individual investment advice in a chat forum, but I would expect if your lease isn't renewed, you would be free to sign a new lease with another company.
Adam Wilmoth 10:04 a.m. There are many variables to that question. SandRidge executives have said they plan to renew or expand their holdings in areas where they have built up electrical and pipeline infrastructure and that they may let some other areas go.
Don Williamson 10:06 a.m. I am a land owner in Roger Mills Co. The operators of drilling mud disposal pits, injection wells, and marginal wells will run out the back door. Future generations will finance the aftermath remediation.
Jay Marks 10:06 a.m. Even if SD allows the lease to lapse, I'd imagine there would be other companies interested.
Jay Marks 10:06 a.m. I don't think that is likely to happen, Don.
Jay Marks 10:07 a.m. Most lease agreements require operators to clean up after themselves.
Adam Wilmoth 10:08 a.m. The Oklahoma Energy Resources Board is cleaning up the state's old, abandoned sites. Most current leases have tighter language, and companies face stronger regulations from the Oklahoma Corporation Commission and other regulatory bodies.
Jay Marks 10:08 a.m. There also are armies of lawyers who will help ensure oil-field messes aren't left behind for future generations to clean up.
Adam Wilmoth 10:09 a.m. But if there is a case like that happening now or recently, please let us know about it. We'd be happy to follow up on it.
Matt 10:09 a.m. What are the latest employment numbers you are hearing at AEP, and what do you think they are going to look like in 6-12 months?
Paul Monies 10:10 a.m. (In this case, you're referring to American Energy Partners, not the Ohio-based utility American Electric Power, which also goes by AEP?)
Jay Marks 10:10 a.m. American Energy Partners has not disclosed how many people it employs, but its growth will depend on how successful it is in Ohio's Utica Shale.
Jay Marks 10:11 a.m. Aubrey McClendon's new company has lined up $1.7 billion to buy up acreage and start drilling in Ohio.
Jay Marks 10:11 a.m. The company's success there likely will govern how quickly it is able to grow.
Adam Wilmoth 10:11 a.m. Aubrey McClendon's new company, American Energy Partners, apparently is still growing. The company has billboards all over town pointing out it is "still hiring." There are more and more cars parked outside the Harvey Parkway building.
DD 10:12 a.m. Are the current changes with Chesapeake and the layoffs a concern for potential employee's? Thinking of accepting a job and have concerns about future layoffs.
Adam Wilmoth 10:13 a.m. Chesapeake CEO Doug Lawler has said the major layoffs are over and that the company is moving forward.
Adam Wilmoth 10:13 a.m. He said he expects the company to become a growing company again.
Paul Monies 10:13 a.m. We've got about 10 questions in the queue, so stay tuned as we can get to them.
Jay Marks 10:14 a.m. CHK seems to have its spending under control, so I don't expect future layoffs, but some job shifting could occur as the company continues to sell assets
Matt 10:15 a.m. Any updates on a new CEO at Enable? They've been pretty silent on the subject since the senior exec announcement over the summer...
Adam Wilmoth 10:15 a.m. There is still uncertainty in the Chesapeake and its future, but the stock price is climbing and Wall Street seems to be growing more comfortable with the company's direction.
Paul Monies 10:15 a.m. Matt, OGE said last week in a conference call with analysts that the search is ongoing for a CEO at Enable. They're still on track for an initial public offering in the first quarter of 2014.
Jay Marks 10:16 a.m. I checked in with those folks today. They're still searching for a CEO to run the company (with the combined midstream assets of OGE Energy Corp. and Houston's CenterPoint Energy) with an eye toward an IPO early next year.
Jay Marks 10:16 a.m. Nothing new to report at this point, however.
Paul Monies 10:17 a.m. Stand by for earthquake questions...
Jonathan 10:17 a.m. In light of all of the recent earthquakes in Oklahoma, do stakeholders in the energy industry have a response? I've only read articles from the USGS and other researchers.
John 10:17 a.m. Any idea on what new regulations the Oklahoma Corporation Commission might explore in regards to public concern over recent earthquakes?
Adam Wilmoth 10:18 a.m. The Corporation Commission is working on establishing best practices for injection wells, which may or may not be contributing to the earthquakes.
Adam Wilmoth 10:18 a.m. The rulemaking process is slow.
Adam Wilmoth 10:19 a.m. The commission is working with companies and the Oklahoma Geological Survey to determine what practices could contribute to earthquakes and the best way to avoid those.
Adam Wilmoth 10:20 a.m. Commissioner Murphy compared it to the fracking fluid disclosures.
Adam Wilmoth 10:21 a.m. The commission worked with companies to establish best practice guidelines for reporting fracking chemicals on frackfocus.org. Those guidelines later became rules.
Adam Wilmoth 10:21 a.m. I think the oil and natural gas industry is watching this closely.
Jay Marks 10:22 a.m. The correct name of the fracking registry is fracfocus.org
Adam Wilmoth 10:23 a.m. At this point, it's still unclear whether or how much the industry activity is contributing to the earthquakes. The companies are reluctant to weigh in too much until more information is known.
Adam Wilmoth 10:23 a.m. Thank you, Jay.
Billy Joe 10:23 a.m. Will the southern leg of the Keystone pipeline have much of an effect on Okla interests if the northern leg is never built? If the northern leg is built, how will that impact Okla?
Adam Wilmoth 10:24 a.m. The southern leg already has worked to reduce the glut of oil in Cushing.
Jay Marks 10:24 a.m. The new line is expected to reduce the longstanding glut of oil at the Cushing hub once it is operational.
Adam Wilmoth 10:24 a.m. Correction: The line will soon work to reduce the glut in Cushing. It's not operational yet.
Adam Wilmoth 10:25 a.m. But other lines have been built to move oil out of Cushing or to bypass the Oklahoma hub.
Jay Marks 10:25 a.m. The Gulf Coast line will move more oil from the Mid-Continent to Houston area refineries, likely allowing area producers to get a better price for their product.
Adam Wilmoth 10:26 a.m. As a result, Oklahoma producers are receiving a stronger price for their oil, which had been selling for significantly less than the international Brent Crude price.
Jay Marks 10:26 a.m. The full Keystone XL line is more a concern for producers in Canada's oil sands or the Bakken Shale in North Dakota and Montana, but Continental Resources Inc. CEO Harold Hamm made waves recently when he said the Bakken doesn't need KXL.
Jay Marks 10:27 a.m. Continental is moving a lot of its North Dakota production by rail, which allows greater flexibility in delivery since there are more rail routes than pipelines.
Adam Wilmoth 10:27 a.m. While the northern leg of Keystone has been delayed and is still very uncertain, other pipeline companies are building similar lines.
Jay Marks 10:27 a.m. The industry though maintains that pipelines are the safest, most efficient way to transport oil.
Adam Wilmoth 10:28 a.m. Enbridge, for example, has announced plans to expand its existing line from Canada through Chicago and on to Cushing.
John 10:28 a.m. Could you anticipate any of the anti-hydraulic fracturing sentiment that resulted in moratoriums and bans in Colorado and North Texas municipalities to find their way into Oklahoma?
Jay Marks 10:29 a.m. Not likely. I have seen very little opposition to fracking in Oklahoma in the four years I have covered the industry.
Jay Marks 10:30 a.m. I'm not aware of any bans or moratoriums in Texas, which is still the nation's leading oil producer, but the Colorado bans approved by voters last week are interesting.
Paul Monies 10:30 a.m. New York state continues to have a moratorium, right?
Jay Marks 10:30 a.m. I'm not sure if those cities are in prime oil and gas development areas, but I've seen some reports indicating those bans are likely to be struck down in court.
Jay Marks 10:31 a.m. New York still is studying the environmental impacts of fracking so there has not been much drilling there.
Paul Monies 10:32 a.m. We're at about the halfway point. Thanks for sticking with us; got a few more questions in the queue we hope to get to.
Matt 10:33 a.m. Any big things going on at Access Midstream? With everything going on at Sandridge and Chesapeake you don't hear as much about Access these days.
Jay Marks 10:33 a.m. Such is the nature of midstream companies.
Jay Marks 10:33 a.m. News usually tends to come from new oil and gas discoveries. The pipeline that gets those new resources to market typically doesn't garner as much attention.
Paul Monies 10:34 a.m. Here's what we had in our special Oklahoma Inc. section last weekend on Access Midstream. They came in at No. 5. http://newsok.com/no.-5.-access-midstream-partners-grows-through-acquisitions-fixed-fees/article/3898730
Jay Marks 10:34 a.m. Access, which started its life as Chesapeake's midstream subsidiary, is working to broaden its reach in the industry, while expanding its customer base.
Paul Monies 10:35 a.m. Access has about 600 employees in Oklahoma City and continues to hire.
John 10:39 a.m. Any new news on Tom Ward's new venture, Tapstone Energy?
Jay Marks 10:40 a.m. Ostensibly, he's still building his company.
Adam Wilmoth 10:41 a.m. Ward said last month that the company is looking to grow slowly.
Adam Wilmoth 10:41 a.m. He is looking for the right properties, which he said are those that have potential, but are not especially popular.
Jay Marks 10:41 a.m. It took Aubrey McClendon a long time between when we learned he had formed American Energy Partners and the new company's first move.
Paul Monies 10:43 a.m. If you're looking for a little more about McClendon and Ward and the behind-the-scenes intrigue at both Chesapeake and SandRidge, check out "The Frackers" by Wall Street Journal reporter Gregory Zuckerman. We had a review of the book recently. http://newsok.com/book-review-the-frackers/article/3900747
John 10:44 a.m. It seems like there has been a lot of interest in drilling in Oklahoma lately from companies like Devon, Continental Resources, EnerVest and Newfield. Do you have any idea on the economic implications for rural Oklahoma from all of this investment?
Adam Wilmoth 10:45 a.m. Rural Oklahoma has been active for the past several years, and it doesn't look like that will change soon.
Jay Marks 10:45 a.m. I'm sure it has been a boon to local businesses, which are feeding, clothing and housing the workers who come in to drill in these areas.
Adam Wilmoth 10:46 a.m. Hotels have been booked and restaurants full throughout western, southern and northern Oklahoma.
John 10:46 a.m. You recently ran a story on the Lesser Prairie Chicken. Do you think the Endangered Species Act could hurt oil and gas production in Oklahoma?
Jay Marks 10:47 a.m. Plus royalty owners benefit from oi land gas development on their property. Those funds most often go back into the local economy as well.
Jay Marks 10:48 a.m. I haven't heard about many issues linking the lesser prairie chicken and oil and gas development.
Adam Wilmoth 10:49 a.m. The Lesser Prairie Chicken and the American Burying Beetle have been issues for the industry for a while.
Jay Marks 10:49 a.m. Usually the concern is wind turbines disrupting the LPC's habitat because the birds have evolved to avoid tall structures that might be roosts for predators.
Paul Monies 10:50 a.m. They are still studying how to best site wind farms so it won't affect the lesser prairie chicken habitat.
Jay Marks 10:50 a.m. That could be true of drilling rigs too, I suppose.
Paul Monies 10:50 a.m. Adam, you wrote about the beetle recently, didn't you?
Adam Wilmoth 10:51 a.m. The plan announced last month could keep the prairie chicken off the federal list of protected species, which might help development in the oil and natural gas and wind energy industries.
Adam Wilmoth 10:51 a.m. Chaparral Energy recently spent $6 million to trap and relocate 12 beetles in Osage County.
John Campbell 10:52 a.m. When are the oil and gas industries going to admit that their practices are causing damaging earthquakes in Oklahoma, and man up and pay for those damages??
Adam Wilmoth 10:53 a.m. That's still under investigation.
Jay Marks 10:53 a.m. To be clear, there also has not been a lot of damage reported.
Paul Monies 10:54 a.m. OK, we have a couple more questions after this one, and then we'll wrap it up.
Jay Marks 10:54 a.m. That's the first thing anyone will have to prove before seeking reimbursement from anyone thought to be responsible for the earthquakes.
Adam Wilmoth 10:55 a.m. Oklahoma Geological Survey seismologist Austin Holland has said he thinks a small percentage of the increased earthquake activity is caused by oil and natural gas industry activity and that much of it appears to have natural causes.
Adam Wilmoth 10:55 a.m. Others have pointed more to the oil and gas industry.
Edd 10:55 a.m. Why on OCC website do they not mind showing gas production on individual wells, but are reluctant to show the oil production on each well?
Jay Marks 10:57 a.m. I haven't looked at those figures lately, but I imagine it is standard to report production in natural gas equivalent.
Jay Marks 10:58 a.m. Most companies choose to report one figure, rather than breaking down oil, gas and liquids. OCC probably does the same.
Pete 10:58 a.m. Do you believe that McClendon will look into buying the Occidental Petroleum assets in the West Mid-Con area?
Jay Marks 10:58 a.m. I believe he might consider it, but that doesn't mean anything.
Jay Marks 10:59 a.m. McClendon and other energy execs probably consider a lot of deals, but most of them are rejected without any real interest. That's just part of the business.
Paul Monies 11:00 a.m. OK, I think we're going to end it there. Thanks again for joining us this morning.
Jay Marks 11:01 a.m. We'll be back to take more questions on Dec. 10.
Paul Monies 11:02 a.m. In the meantime, feel free to contact us about your questions and concerns offline. Thanks, everyone.

by Jay F. Marks
Energy Reporter
Jay F. Marks has been covering Oklahoma news since graduating from Oklahoma State University in 1996. He worked in Sulphur and Enid before joining The Oklahoman in 2005. Marks has been covering the energy industry since 2009.
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by Adam Wilmoth
Energy Editor
Adam Wilmoth returned to The Oklahoman as energy editor in 2012 after working for four years in public relations. He previously spent seven years as a business reporter at The Oklahoman, including five years covering the state's energy sector....
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by Paul Monies
Energy Reporter
Paul Monies is an energy reporter for The Oklahoman. He has worked at newspapers in Texas and Missouri and most recently was a data journalist for USA Today in the Washington D.C. area. Monies also spent nine years as a business reporter and...
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