1
00:00:03,440 --> 00:00:06,840
Speaker 1: Global business news twenty four hours a day at Bloomberg

2
00:00:06,880 --> 00:00:09,960
Speaker 1: dot com, the Radio plus Mobile Act and on your radio.

3
00:00:10,240 --> 00:00:14,640
Speaker 1: This is a Bloomberg Business Flash from Bloomberg World hand Quarters.

4
00:00:14,720 --> 00:00:17,599
Speaker 1: I'm Charlie Pelot. Stocks are wrenching higher than now, the

5
00:00:17,800 --> 00:00:20,840
Speaker 1: SMP NEZDAK all making games. Let's head right over the

6
00:00:20,880 --> 00:00:24,239
Speaker 1: first word breaking news TSK for today's afternoon call big

7
00:00:24,280 --> 00:00:27,520
Speaker 1: welcome back and here he is Bill Maloney, Thanks Charlie

8
00:00:27,640 --> 00:00:30,639
Speaker 1: MANUS averages are quiet today, with the Dow currently higher

9
00:00:30,680 --> 00:00:33,000
Speaker 1: by twenty three point, sesames game two and a half

10
00:00:33,320 --> 00:00:36,519
Speaker 1: and as that rises eighteen to small cap six hundreds

11
00:00:36,520 --> 00:00:39,199
Speaker 1: down three points, and the US tenure yield fell on

12
00:00:39,240 --> 00:00:42,239
Speaker 1: weekend and expected I s M number is currently at

13
00:00:42,240 --> 00:00:46,720
Speaker 1: one point five four percent. Sup sector leaders included energy, telcom,

14
00:00:46,840 --> 00:00:51,040
Speaker 1: and utilities, while financials and industrials led to the downside

15
00:00:51,360 --> 00:00:54,920
Speaker 1: down Transports drop fifteen as a Bytex rise thirty and

16
00:00:54,960 --> 00:00:58,000
Speaker 1: the VIX is higher by two point three percent. Down

17
00:00:58,040 --> 00:01:00,920
Speaker 1: Leaders to the upside included Chevron, Varie, An, n Intel,

18
00:01:01,400 --> 00:01:05,039
Speaker 1: g E, N, Nike. Each fell one percent. Goodyear rose

19
00:01:05,080 --> 00:01:07,840
Speaker 1: as much as five point six percent. Shares the upgraded

20
00:01:07,880 --> 00:01:10,920
Speaker 1: over at Deutsche Bank pre market, while Cummins fell seven

21
00:01:10,920 --> 00:01:14,880
Speaker 1: percent after the VW steak in Navis Star. Also note

22
00:01:14,880 --> 00:01:17,720
Speaker 1: that Amazon and Facebook a new all time highs today

23
00:01:17,880 --> 00:01:19,959
Speaker 1: Live from the first Breaking News desk on Bill Maloney.

24
00:01:20,040 --> 00:01:22,679
Speaker 1: Charlie and we thank you very much, Bill Maloney, and

25
00:01:22,720 --> 00:01:25,959
Speaker 1: to hear live breaking news over your Bloomberg type squawk

26
00:01:26,200 --> 00:01:30,920
Speaker 1: squ a w k on your terminal, and we are

27
00:01:30,959 --> 00:01:33,679
Speaker 1: brought to you by Marks Paneth l LP, ranked among

28
00:01:33,720 --> 00:01:36,640
Speaker 1: the top three for rensick accounting firms in New York

29
00:01:36,959 --> 00:01:39,360
Speaker 1: by the New York Law Journal for the sixth year

30
00:01:39,400 --> 00:01:42,919
Speaker 1: in a row. Visit Mars Panneth dot com. I'm Charlie

31
00:01:42,959 --> 00:01:47,680
Speaker 1: Pellett and that's a Bloomberg business flash. You're listening to

32
00:01:47,800 --> 00:01:51,559
Speaker 1: Taking Style with Kathleen and Pim Box on Bloomberg Radio.

33
00:01:52,280 --> 00:01:55,680
Speaker 1: The U S Geological Survey is examining whether the five

34
00:01:55,720 --> 00:02:00,120
Speaker 1: point six magnitude earthquake that shook Oklahoma on Saturday was

35
00:02:00,160 --> 00:02:03,160
Speaker 1: also tied for the strongest trembler ever recorded in the state,

36
00:02:03,600 --> 00:02:06,920
Speaker 1: whether that earthquake was triggered by the underground disposal of

37
00:02:07,040 --> 00:02:10,920
Speaker 1: wastewater from oil and gas production. Here to tell us

38
00:02:10,960 --> 00:02:14,320
Speaker 1: more is Rob Barnett. He is Senior Energy policy analyst

39
00:02:14,400 --> 00:02:18,720
Speaker 1: for Bloomberg Intelligence, providing unique and real time research and

40
00:02:18,800 --> 00:02:21,680
Speaker 1: context for a variety of industries, and all of the

41
00:02:21,720 --> 00:02:25,920
Speaker 1: markets and government factors that affect businesses are terminal. Customers

42
00:02:25,960 --> 00:02:30,760
Speaker 1: can access this function by typing b I go, Rob Barnett.

43
00:02:30,840 --> 00:02:35,000
Speaker 1: Thank you for being with us. The us GS going

44
00:02:35,040 --> 00:02:39,520
Speaker 1: to examine this earthquake and these tremblers tell us. So

45
00:02:39,639 --> 00:02:43,679
Speaker 1: what we know so far about the relationship between disposal

46
00:02:43,720 --> 00:02:47,560
Speaker 1: of wastewater from oil and gas production and these kinds

47
00:02:47,600 --> 00:02:52,120
Speaker 1: of natural or unnatural events. Well, the state's regulator, the

48
00:02:52,200 --> 00:02:56,359
Speaker 1: Oklahoma Commissions Corporation, is already taking action. They're not waiting

49
00:02:56,360 --> 00:02:59,000
Speaker 1: on the u s G as So, in the wake

50
00:02:59,120 --> 00:03:01,680
Speaker 1: of the earthquake ake, which was a five point six

51
00:03:01,720 --> 00:03:06,480
Speaker 1: magnitude on the Richter scale on Saturday, they issued an

52
00:03:06,600 --> 00:03:14,000
Speaker 1: order requiring thirty seven wells to stop disposal or injection

53
00:03:14,200 --> 00:03:17,720
Speaker 1: of this waste water. So, when you frack whales, you

54
00:03:17,840 --> 00:03:23,560
Speaker 1: actually produce about ten times more UH kind of water

55
00:03:23,720 --> 00:03:26,720
Speaker 1: stand other sediment than you do oil and gas, and

56
00:03:26,760 --> 00:03:29,520
Speaker 1: you've got to put that somewhere. And the practice has

57
00:03:29,600 --> 00:03:33,000
Speaker 1: been tied two earthquakes in Oklahoma, or at least the

58
00:03:33,000 --> 00:03:35,600
Speaker 1: regulator there and that state believes so, and so they're

59
00:03:35,640 --> 00:03:39,320
Speaker 1: they're taking action today. The number of earthquakes measuring three

60
00:03:39,360 --> 00:03:42,920
Speaker 1: point oh Ohio reached at least eight hundred ninety last year,

61
00:03:43,000 --> 00:03:46,920
Speaker 1: followed by about three d seventy this year through June, two,

62
00:03:47,480 --> 00:03:50,120
Speaker 1: far cry from only two and two thousand eight before

63
00:03:50,160 --> 00:03:52,400
Speaker 1: the fracking boom. So it doesn't seem too hard to

64
00:03:52,440 --> 00:03:55,720
Speaker 1: make a connection, is it? Will it just be totally

65
00:03:55,880 --> 00:03:58,320
Speaker 1: out of the question now too expensive and how in

66
00:03:58,400 --> 00:04:00,240
Speaker 1: the heck would you do it? Anyway? For company needs

67
00:04:00,280 --> 00:04:02,680
Speaker 1: not to inject the wastewater back into the earth, but

68
00:04:02,800 --> 00:04:05,640
Speaker 1: find into something else to do with it. Right, there

69
00:04:05,680 --> 00:04:08,800
Speaker 1: are a number of options, so you don't have to

70
00:04:08,880 --> 00:04:13,480
Speaker 1: always inject. You can treat the water. The problem though,

71
00:04:13,600 --> 00:04:16,839
Speaker 1: is that some of the other options are more expensive,

72
00:04:16,880 --> 00:04:19,440
Speaker 1: and so the common practice has been to do this

73
00:04:19,480 --> 00:04:24,400
Speaker 1: wastewater injection because it's the most economic. And so if

74
00:04:24,520 --> 00:04:27,600
Speaker 1: the state regulator really continues to hammer away on this

75
00:04:27,800 --> 00:04:31,960
Speaker 1: point and put additional regulations in place, it will force

76
00:04:32,040 --> 00:04:36,120
Speaker 1: the industry to really take those other options more seriously.

77
00:04:36,400 --> 00:04:40,400
Speaker 1: If if they're going to continue to produce at the

78
00:04:40,480 --> 00:04:43,760
Speaker 1: kind of volumes that they've been in Oklahoma, and perhaps

79
00:04:43,800 --> 00:04:47,080
Speaker 1: neighboring states too. It's not there's nothing special about the

80
00:04:47,839 --> 00:04:51,720
Speaker 1: geology of Oklahoma. Other states are wrestling with this same

81
00:04:51,760 --> 00:04:54,120
Speaker 1: kind of issue right now too, right and then, and

82
00:04:54,240 --> 00:04:59,360
Speaker 1: the geology of Oklahoma is sort of getting new attention

83
00:04:59,440 --> 00:05:04,080
Speaker 1: because this most recent earthquake was on a fault line

84
00:05:04,120 --> 00:05:09,640
Speaker 1: that had been previously unknown. That's right, But not all

85
00:05:09,720 --> 00:05:13,279
Speaker 1: regulators in all states see it the same way. Texas

86
00:05:13,279 --> 00:05:16,200
Speaker 1: has been looking at the issue as well, and their

87
00:05:17,080 --> 00:05:20,840
Speaker 1: their commission in their state basically said that they don't

88
00:05:20,880 --> 00:05:25,800
Speaker 1: think that there's anything to the connection between earthquakes and

89
00:05:25,800 --> 00:05:31,160
Speaker 1: wastewater disposals. So really is a big mismatch between kind

90
00:05:31,160 --> 00:05:33,560
Speaker 1: of where the science is, where the regulators are, and

91
00:05:33,680 --> 00:05:37,800
Speaker 1: right now it's completely a game that is being handled

92
00:05:37,839 --> 00:05:40,680
Speaker 1: by the states. The federal government really hasn't taken a

93
00:05:40,720 --> 00:05:43,720
Speaker 1: strong view on this, and there really isn't regulatory authority

94
00:05:44,040 --> 00:05:46,920
Speaker 1: coming from Washington on this. It's all being managed by

95
00:05:46,920 --> 00:05:49,800
Speaker 1: the states right now. Is there less of it? We

96
00:05:49,880 --> 00:05:53,520
Speaker 1: I just read the numbers on the increase in earthquakes

97
00:05:53,520 --> 00:05:56,359
Speaker 1: since two thousand eight in Oklahoma. Has Texas not had

98
00:05:56,920 --> 00:06:02,240
Speaker 1: a similarly proportionately large increase in the number of earthquakes

99
00:06:02,240 --> 00:06:06,000
Speaker 1: they've experienced since they started doing a lot more fracking

100
00:06:06,240 --> 00:06:11,360
Speaker 1: and injecting the wastewater back into the ground. The geology

101
00:06:11,400 --> 00:06:15,480
Speaker 1: does matter, so uh there there has been an uptick

102
00:06:15,640 --> 00:06:18,400
Speaker 1: in many of the places that are doing uh this

103
00:06:18,480 --> 00:06:24,279
Speaker 1: oil and gas exploration. But the the I guess it's

104
00:06:24,320 --> 00:06:28,240
Speaker 1: it's all about how whether you believe in correlation causation.

105
00:06:28,360 --> 00:06:30,320
Speaker 1: I mean, but they had this kind of big jump

106
00:06:30,520 --> 00:06:32,920
Speaker 1: in earthquakes in Texas or As, Oklahoma been much more

107
00:06:32,960 --> 00:06:37,560
Speaker 1: susceptible to this. Oklahoma has been particularly susceptible. So other states,

108
00:06:37,560 --> 00:06:40,200
Speaker 1: while they're experiencing the issue, they haven't had the same

109
00:06:41,000 --> 00:06:45,520
Speaker 1: staggering increase that you mentioned just a few minutes ago.

110
00:06:45,560 --> 00:06:49,520
Speaker 1: So Oklahoma is particularly put prone to this problem. But

111
00:06:49,640 --> 00:06:51,400
Speaker 1: it is an issue in other states as well. It's

112
00:06:51,480 --> 00:06:55,200
Speaker 1: not not specifically there, but the big the big jump

113
00:06:55,279 --> 00:06:57,279
Speaker 1: that you would see, I mean, depending on how you

114
00:06:57,320 --> 00:07:00,960
Speaker 1: cut the number. Oklahoma had three into thousand and five

115
00:07:01,400 --> 00:07:03,880
Speaker 1: that were greater than two point five magnitude, and they

116
00:07:03,880 --> 00:07:07,000
Speaker 1: had twenty five hundred last year. So complete order of

117
00:07:07,040 --> 00:07:10,640
Speaker 1: magnitude to orders of magnitude increase in a very short

118
00:07:10,680 --> 00:07:13,880
Speaker 1: amount of time. That's tied to fracking in the state

119
00:07:13,960 --> 00:07:16,840
Speaker 1: and greater oil and gas production. Other states haven't had

120
00:07:16,880 --> 00:07:21,760
Speaker 1: that same order of magnitude increase, but there is. It's

121
00:07:21,800 --> 00:07:24,400
Speaker 1: it's not specific to Oklahoma, but it's Oklahoma is a

122
00:07:24,480 --> 00:07:26,840
Speaker 1: hot spot for the topic. Sure sounds like and there's

123
00:07:26,880 --> 00:07:30,119
Speaker 1: someone who grew up in earthquake country out in Washington State.

124
00:07:30,200 --> 00:07:32,240
Speaker 1: I can just imagine when it feels to go from

125
00:07:32,280 --> 00:07:35,600
Speaker 1: almost no earthquakes to several. Rob Barnett, thank you so

126
00:07:35,760 --> 00:07:38,520
Speaker 1: very much, part of our Bloomberg Intelligence team in Washington,

127
00:07:38,640 --> 00:07:41,680
Speaker 1: d C. Senior energy policy analysts for b I. This

128
00:07:41,760 --> 00:07:47,960
Speaker 1: is Bloomberg. Bloomberg Taking Stock is brought to you by

129
00:07:48,200 --> 00:07:51,480
Speaker 1: Triton Benefits and HR Solutions, one of the country's leading

130
00:07:51,520 --> 00:07:55,680
Speaker 1: benefits providers. Visit Triton Benefits dot com. That's t r

131
00:07:55,840 --> 00:07:59,119
Speaker 1: I t O N Benefits dot com called five Okay

132
00:07:59,160 --> 00:07:59,560
Speaker 1: Triton