In the last post in this series, I discussed man-made earthquakes and their connection to injection technology. Today, I’d like to dig a little deeper into the background of this issue and to focus on the future of this phenomenon.
Historically, earthquakes, especially major ones that have caused significant damage, have occurred along or near geological fault lines. However, as the previous post discussed, this may no longer be the case; reviewing the U.S. Geological Survey’s online list of all earthquakes over the preceding month should undoubtedly reveal a disproportionate number in Oklahoma compared to other areas set apart from fault lines.
Is there any chance we can generally mitigate this problem by not engaging in more advanced drilling techniques? Sadly, that’s unlikely. For one thing, even while per capita energy consumption has decreased slightly in the US, overall consumption has remained fairly constant. This doesn’t even account for the rest of the world; per capita consumption has continued to increase slowly but steadily as the world develops, while the overall population, especially in developing countries, continues to increase. This means that energy consumption will only continue to rise, and even with new innovations in alternative energy sources that offset these increases, it is still very unlikely that they will manage to significantly eliminate the need for petroleum in the short to medium term.
In the meantime, we continue to exhaust conventionally accessible oil resources. Furthermore, the effect of geopolitical considerations (the restriction of oil production by OPEC, or the inaccessibility of certain markets such as – until recently – Iran) will frequently make it more cost effective to target resources that require enhanced recovery techniques. Therefore, it will still be necessary to engage in more extreme extraction methods to offset these losses.
So where will this extraction take place? Ultimately, there are reserves all over the world, and the extent to which they are each tapped will depend, generally, on the speed with which we eventually replace fossil fuels and, specifically, on local reception. Different countries and regions have different laws regulating the kinds of enhanced recovery that can be used and allowable disposal methods. For example, multiple European countries have outright banned fracking.
However, in those countries where these potentially dangerous techniques are permitted, regulation may still be very important. This is because man-made earthquakes are not a necessary result of injection – if that were the case, there are many regions where injection is used where earthquakes should be more common. A recent study has demonstrated that a major factor leading to earthquakes is the speed of injection at these sites, as this tends to correlate with increased pressure along fractures (an interesting consequence of this is that fracking and enhanced recovery techniques are actually less likely to induce earthquakes than wastewater injection, given that the increased pressure of injection is offset by the removal of oil from underground). However, even with this taken into account, it isn’t entirely clear to what extent other factors, such as natural geological stress in a particular region, may contribute. For example, another study in Texas showed that injection was not the primary factor in increased earthquake activity. As such, it will take time before we have a good idea of how to engage in injection while simultaneously mitigating the risk of further earthquakes, and even then, there will likely be a great deal of guesswork and trial-and-error.
This uncertainty could put many regions at risk. Take the drilling of shale deposits. The US has more than a dozen that are in the early stages of development, with a number at or approaching full-scale operation. The previously mentioned earthquakes in Texas have not caused any major damage or injury thus far, but multiple urban areas, including Dallas-Fort Worth, have begun to show seismic activity, and could sustain heavy damage. Meanwhile, the Marcellus Shale, among the most promising, stretches through the Appalachian region, meaning that the continued development of drilling over the next 15 years could very well begin to threaten Pittsburgh and nearby cities in West Virginia; nearby Ohio, meanwhile, has already begun to experience earthquakes in urban areas.
Of course, this danger is present even if regulation is continuously reevaluated and enforced. Such a situation is unlikely in the US, but it’s even less likely in less developed countries, especially those that have a history of corruption and environmental damage in relation to the petroleum industry. This problem may be compounded by lower standards of construction and maintenance in many of these more at-risk regions.
Just with respect to shale, this likely wouldn’t apply significantly in South America, despite concerns of previous corruption and current political trends. While Argentina, and, to a much lesser extent, Brazil, Uruguay, Paraguay, and Bolivia have major reserves, the vast majority are located in sparsely populated and/or particularly developed portions of these countries.
However, this could be a much more significant concern in Asia. Pakistan, for example, has prospective deposits underlying some of their biggest cities, including Karachi and Hyderabad. Meanwhile, China has been projected as the country with the largest recoverable shale gas deposits in the world, with basins underlying or near many major cities, including Shanghai, Chongqing, Wuhan, and Nanjing. Perhaps even more disconcerting is the proximity of several reserves to the geologically active sections of Sichuan Province, near Chengdu, which were the site of major earthquakes in 2008 and 2013, the former of which was responsible for the deaths of almost 100,000 people and the homelessness of nearly 5,000,000. Some theories postulate that this event was precipitated by the construction of a dam nearby, and the uncertainty surrounding both that theory and the possibility that injection could aggravate natural faults leaves the potential risk nearly unmeasurable but potentially catastrophic.
In the next and final installment of this series, I’ll consider some potential scenarios resulting from man-made earthquakes and examine the legal, risk management, and insurance concerns that these entail.