(Bloomberg) -- Pipeline owners near a crucial Oklahoma oil hub reported little damage and resumed normal service after a magnitude 5 earthquake struck late Sunday.
Oklahoma’s oil and gas regulator reported that all pipelines under its jurisdiction were operating again after shutting down as a precaution because of the temblor, centered less than 2 miles west of the city of Cushing.
It’s the second sizable quake in the past two months for the area, which serves as a delivery point for West Texas Intermediate crude and sets the benchmark U.S. oil contract price. Oil futures rose 38 cents to $44.45 a barrel at 10:34 a.m. on the New York Mercantile Exchange.
“It’s definitely a long-term negative development if you are getting earthquakes of that magnitude at such an important site,” Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York, said by telephone. “It doesn’t bode well for the future.”
The Oklahoma Corporation Commission hasn’t ordered the shutdown of any waste-water disposal wells in the area after the earthquake, Matt Skinner, a spokesman for the agency, said by phone. The regulator “is working on an action plan” regarding disposal-well operations in the Arbuckle formation, according to an e-mailed statement. When a similar-magnitude quake hit the state in September, the agency ordered 37 wells shut.
|Controlled shutdow after quake
Magellan Midstream Partners LP, a pipeline operator, resumed normal operations at Cushing late Sunday after a controlled shutdown of its assets after the quake, spokesman Bruce Heine said in e-mailed statements. Enbridge Inc. spokesman Michael Barnes said by email that there was no effect on the company’s facility in Cushing.
Magellan typically discontinues operations to check the integrity of assets if an earthquake over a certain strength occurs, Heine said. Kinder Morgan Inc., another pipe operator, hasn’t had any issues affecting its Cushing operations, Richard Wheatley, a Houston-based spokesman for the company, said in an e-mailed statement.
Electricity has been restored to almost all of Cushing, about 70 miles northeast of Oklahoma City, Jeremy Frazier, assistant city manager, told reporters at a televised press conference late Sunday. Authorities have been in contact with tank farms in the area and there has been no damage to terminals, he said. While some gas leaks occurred, they have been contained and are no longer a threat, according to Frazier. There was some structural damage to buildings in the city’s downtown area, he said.
|Other tremors
Several producers, as well as the U.S. Environmental Protection Agency, are facing lawsuits because of seismic activity allegedly linked to oilfield wastewater disposal in Oklahoma and other states. The OCC, which regulates oil and gas activity in the state, has been issuing restrictions for more than a year aimed at cutting down on the amount of wastewater injected into underground wells.
There are about 35,000 active wastewater disposal wells, though only a few dozen have been linked to quakes, according to a Bloomberg Intelligence report in May, citing the USGS. A 5.6 magnitude tremblor had struck Oklahoma in September, which tied a state record set in 2011. Following earthquake at Cushing on Sunday, minor tremors occurred at Nicoma Park, east of Oklahoma City, and Fairview, in the western part of the state.
The region, previously not known for intense seismic activity, began having a significant number of earthquakes in 2009, the same year area oil companies began using fracking to shatter deep rock layers to extract oil and gas. Fracked wells produce large quantities of wastewater, which drilling companies inject into ultra-deep disposal wells.
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