It was only back in 2017 that the TexNet Seismic Monitoring Program started recording data. Over the years, the monitoring area has increased, mostly in response to concerns seen in Ohio and Oklahoma over induced seismicity.
Induced seismicity refers to seismic activity being induced by other activities and, in this case, the target has been injecting produced water into disposal wells. There are many, who will argue that the verdict is still out as to what causes seismicity from disposal well injection, to hydraulic fracturing, to combinations of the two or something else entirely. We don’t have the time to debate this issue but will cover it in future columns.
Introduction of SRAs. Regardless of your opinion on this topic, the regulatory response has been consistent—they are willing to act, to reduce injection of produced water in disposal wells. This brings me to Seismic Response Areas, a relatively new term that I am afraid may have resounding effects on how produced water is managed in the Permian basin.
The first SRA was established in late September of this year, referred to as the Gardendale SRA. In the period between February 2020 and September 2021, six earthquakes of a magnitude greater than 3.5 occurred in the Midland basin, from northeastern Ector County to southwestern Martin County. The Gardendale SRA encompasses 76 disposal wells operated by 25 different operators. Notices were sent to these 25 operators, asking that they reduce disposal volumes to 10,000 bpd and that any new wells—which have not been commissioned—be terminated. There will be no new permits in the Gardendale SRA for at least one year. It has been estimated that the Gardendale SRA impacts 900,000 bpd of produced water injection.
Within 30 days, and before the impact of Gardendale SRA could set in, a new SRA was established. This SRA is North Culberson-Reeves. In this case, not six, but 15 earthquakes occurred over a similar period, from January 2020 to October 2021. Additionally, these earthquakes were at a greater magnitude than Gardendale, raising the bar from magnitude 3.5 to 4.0. Even more concerning, during a one-month period—from Sept. 3, 2021, to Oct. 3, 2021—there were six earthquakes over magnitude 4.0. This new SRA impacts 89 disposal wells and 22 different operators. There are reports that the North Culberson-Reeves SRA impacts up to 1.988 MMbpd.
This program’s goal is to eliminate earthquakes greater than magnitude 3.5 for 18 months following implementation of the plan. We will have to keep a careful eye on how individual operators respond to the original notices, and if there is continued seismic activity, how the RRC responds. The other issue is “What happens when you impact close to 3 MMbpd of disposal capacity” in the Permian basin?
Many have called for an increase in produced water recycling. There seems considerably more activity in that direction, but is the solution really that simple? This is a much more complex issue, and the solution will need to be much more complex.
Uncertainty. We cannot predict whether establishment of SRAs will impact earthquake activity, so there is the potential that volumes could be further restricted or new SRAs could be established. The RRC also has called for no new disposal permits in this area, which will impact future activity.
Well completion uncertainty is another concern. If recycling is going to be a solution, then you have to have an outlet for your recycled product. In the case of produced water, the outlet is reuse as a frac fluid on new well completions. We have seen well completions become erratic over the last couple years when we need them to be consistent to become a reliable outlet. There hasn’t been any significant increase in frac crews over the last quarter, and frac crew growth is predicted to be flat. Although most people predict a stable or increasing oil price, any sudden decreases will result in less completions.
Now, finally add the SRA impact—will you plan more well completions within an SRA, when you cannot permit new disposal wells? If you don’t plan further well completion activity within the SRA, how can you use recycling as a completion fluid, as an option? So, a tremendous amount of uncertainty surrounds this issue.
But let’s add some more complexity to the problem. Some landowners restrict produced water on their property to encourage fresh or brackish water sales or just require that well completions on their property use their water. Any agreements like this will reduce recycling opportunities and increase the complexity around the impact of SRAs on produced water management.
Looking for solutions. So, how do we solve this complex problem? With multiple options, obviously recycling on its own can’t be the only solution, and the most economical alternative has been evaporation. Unfortunately, conventional evaporation also spreads salt contamination, resulting in it becoming all but abandoned-to-limited in most highly saline produced waters. The good news is there are a few new evaporation technologies that limit salt dispersion. We developed our own, which just completed a 90-day trial and will be going into full scale in December.
Increasing recycling is progress, but the complexity of the impacts of SRAs and uncertainties they bring will challenge opportunities to recycle, as well as other issues, including landowner agreement. SRAs require a more complex solution that will integrate multiple outlets for produced water, starting with disposal wells, followed by recycling and then supplemented by improved evaporation technologies or other options. We need to understand, as an industry, that we need diversification in our produced water management programs to respond to SRAs and other regulatory impacts coming our way.
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