U.S. Geological Survey seismologist Susan Hough recently commented that the link between fracking and earthquakes is “a red herring.” The statement was issued in conjunction with the release of a study by the USGS finding that deep underground injection to dispose of wastewater from oil and gas operations has had a long and vaunted history in Oklahoma—well before the recent fracking boom.
Simultaneously, the issue of induced earthquakes in Oklahoma is increasingly gaining attention among insurers of policyholders large and small. A recent report projects that the risk of a large seismic event near the Cushing, Oklahoma oil storage hub—the largest in the nation—could have a disruptive, and costly, impact on critical storage infrastructure.
In addition, on October 20, Oklahoma Insurance Commissioner John Doak ordered insurers in the state to issue notices within 45 days to policyholders and insurance agents clarifying whether their policies cover earthquake damage induced by oil and gas exploration and other industrial activity. Policies have historically excluded seismic events that cannot be classified as an “act of God” because they are attributed to human activity, so-called “anthropogenic” earthquakes. As a result, although 100 insurance claims to date have been filed due to damage from Oklahoma quakes, most claims have been denied because of induced quakes—policyholders have recovered on only 8 claims so far.
Although the EPA has not taken major measures involving induced seismicity risks, its latest annual report indicated the need for improvement in Oklahoma’s use of the Risk Based Data Management System (RBDMS). RBDMS was created by nonprofit group the Groundwater Protection Council, and has the potential for tracking and releasing mechanical integrity test reporting and annual injection reporting that Oklahoma already collects as part of Class II injection well permit requirements.