Texas Frackers Are Facing Water-Disposal Bans After a Slew of Earthquakes

(Bloomberg) -- Shale drillers in one of the busiest parts of Texas’ Permian Basin will have to find new ways to get rid of their wastewater after the state regulator tied their practices to a slew of earthquakes in the region.

For decades, oil drillers have disposed of the salty water that spews out of wells alongside crude by injecting it back into the ground. But the Railroad Commission of Texas, which oversees the oil industry, has recently told companies to stop injecting the water in northern Culberson and Reeves counties, two of the most active for drilling in the prolific Permian. The ban, which takes effect Jan. 12, applies to 23 deep disposal wells operated by companies including Chevron Corp., BP Plc and Coterra Energy Inc.

The suspension comes after seven earthquakes with magnitudes of at least 3.6 were detected in the region late last year, the commission said in an online notice. The spate of seismic activity included a near-record temblor on Nov. 8.

“These are the most recent events in a continuing sequence of earthquakes that have occurred in this area over the last three years,” the agency said in its Dec. 19 action. As a result, the regulator said that deep injection “is likely contributing to recent seismic activity in the Northern-Culberson Reeves Seismic Response Area.”

The Railroad Commission’s latest action is stronger than measures it has taken in the past, when it asked companies to reduce disposal volumes rather than outright suspending deep injections. The new policy will mean companies must truck or pipe their wastewater further away or dispose of it in shallower spots underground. 

The frequency of earthquakes in West Texas declined in 2023 for the first time in at least half a decade after regulators began asking drillers to restrict oil field activities in late 2021 and again in 2022 by limiting the amount of wastewater disposed of underground. Chevron Chief Executive Officer Mike Wirth said in October that “limits” on water disposal were partly behind its faltering Permian performance last year. 

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