WEBVTT - Bloomberg's Barnett on Fracking Backlash in Oklahoma (Audio)

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<v Speaker 1>I'm Charlie Pelot. Stocks are wrenching higher than now, the

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<v Speaker 1>welcome back and here he is Bill Maloney, Thanks Charlie

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<v Speaker 1>Charlie and we thank you very much, Bill Maloney, and

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<v Speaker 1>The U S Geological Survey is examining whether the five

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<v Speaker 1>point six magnitude earthquake that shook Oklahoma on Saturday was

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<v Speaker 1>also tied for the strongest trembler ever recorded in the state,

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<v Speaker 1>whether that earthquake was triggered by the underground disposal of

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<v Speaker 1>wastewater from oil and gas production. Here to tell us

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<v Speaker 1>more is Rob Barnett. He is Senior Energy policy analyst

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<v Speaker 1>for Bloomberg Intelligence, providing unique and real time research and

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<v Speaker 1>context for a variety of industries, and all of the

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<v Speaker 1>markets and government factors that affect businesses are terminal. Customers

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<v Speaker 1>can access this function by typing b I go, Rob Barnett.

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<v Speaker 1>Thank you for being with us. The us GS going

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<v Speaker 1>to examine this earthquake and these tremblers tell us. So

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<v Speaker 1>what we know so far about the relationship between disposal

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<v Speaker 1>of wastewater from oil and gas production and these kinds

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<v Speaker 1>of natural or unnatural events. Well, the state's regulator, the

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<v Speaker 1>Oklahoma Commissions Corporation, is already taking action. They're not waiting

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<v Speaker 1>on the u s G as So, in the wake

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<v Speaker 1>of the earthquake ake, which was a five point six

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<v Speaker 1>magnitude on the Richter scale on Saturday, they issued an

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<v Speaker 1>order requiring thirty seven wells to stop disposal or injection

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<v Speaker 1>of this waste water. So, when you frack whales, you

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<v Speaker 1>actually produce about ten times more UH kind of water

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<v Speaker 1>stand other sediment than you do oil and gas, and

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<v Speaker 1>you've got to put that somewhere. And the practice has

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<v Speaker 1>been tied two earthquakes in Oklahoma, or at least the

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<v Speaker 1>regulator there and that state believes so, and so they're

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<v Speaker 1>they're taking action today. The number of earthquakes measuring three

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<v Speaker 1>point oh Ohio reached at least eight hundred ninety last year,

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<v Speaker 1>followed by about three d seventy this year through June, two,

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<v Speaker 1>far cry from only two and two thousand eight before

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<v Speaker 1>the fracking boom. So it doesn't seem too hard to

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<v Speaker 1>make a connection, is it? Will it just be totally

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<v Speaker 1>out of the question now too expensive and how in

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<v Speaker 1>the heck would you do it? Anyway? For company needs

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<v Speaker 1>not to inject the wastewater back into the earth, but

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<v Speaker 1>find into something else to do with it. Right, there

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<v Speaker 1>are a number of options, so you don't have to

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<v Speaker 1>always inject. You can treat the water. The problem though,

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<v Speaker 1>is that some of the other options are more expensive,

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<v Speaker 1>and so the common practice has been to do this

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<v Speaker 1>wastewater injection because it's the most economic. And so if

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<v Speaker 1>the state regulator really continues to hammer away on this

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<v Speaker 1>point and put additional regulations in place, it will force

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<v Speaker 1>the industry to really take those other options more seriously.

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<v Speaker 1>If if they're going to continue to produce at the

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<v Speaker 1>kind of volumes that they've been in Oklahoma, and perhaps

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<v Speaker 1>neighboring states too. It's not there's nothing special about the

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<v Speaker 1>geology of Oklahoma. Other states are wrestling with this same

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<v Speaker 1>kind of issue right now too, right and then, and

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<v Speaker 1>the geology of Oklahoma is sort of getting new attention

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<v Speaker 1>because this most recent earthquake was on a fault line

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<v Speaker 1>that had been previously unknown. That's right, But not all

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<v Speaker 1>regulators in all states see it the same way. Texas

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<v Speaker 1>has been looking at the issue as well, and their

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<v Speaker 1>their commission in their state basically said that they don't

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<v Speaker 1>think that there's anything to the connection between earthquakes and

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<v Speaker 1>wastewater disposals. So really is a big mismatch between kind

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<v Speaker 1>of where the science is, where the regulators are, and

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<v Speaker 1>right now it's completely a game that is being handled

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<v Speaker 1>by the states. The federal government really hasn't taken a

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<v Speaker 1>strong view on this, and there really isn't regulatory authority

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<v Speaker 1>coming from Washington on this. It's all being managed by

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<v Speaker 1>the states right now. Is there less of it? We

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<v Speaker 1>I just read the numbers on the increase in earthquakes

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<v Speaker 1>since two thousand eight in Oklahoma. Has Texas not had

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<v Speaker 1>a similarly proportionately large increase in the number of earthquakes

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<v Speaker 1>they've experienced since they started doing a lot more fracking

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<v Speaker 1>and injecting the wastewater back into the ground. The geology

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<v Speaker 1>does matter, so uh there there has been an uptick

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<v Speaker 1>in many of the places that are doing uh this

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<v Speaker 1>oil and gas exploration. But the the I guess it's

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<v Speaker 1>it's all about how whether you believe in correlation causation.

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<v Speaker 1>I mean, but they had this kind of big jump

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<v Speaker 1>in earthquakes in Texas or As, Oklahoma been much more

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<v Speaker 1>susceptible to this. Oklahoma has been particularly susceptible. So other states,

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<v Speaker 1>while they're experiencing the issue, they haven't had the same

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<v Speaker 1>staggering increase that you mentioned just a few minutes ago.

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<v Speaker 1>So Oklahoma is particularly put prone to this problem. But

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<v Speaker 1>it is an issue in other states as well. It's

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<v Speaker 1>not not specifically there, but the big the big jump

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<v Speaker 1>that you would see, I mean, depending on how you

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<v Speaker 1>cut the number. Oklahoma had three into thousand and five

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<v Speaker 1>that were greater than two point five magnitude, and they

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<v Speaker 1>had twenty five hundred last year. So complete order of

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<v Speaker 1>magnitude to orders of magnitude increase in a very short

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<v Speaker 1>amount of time. That's tied to fracking in the state

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<v Speaker 1>and greater oil and gas production. Other states haven't had

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<v Speaker 1>that same order of magnitude increase, but there is. It's

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<v Speaker 1>it's not specific to Oklahoma, but it's Oklahoma is a

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<v Speaker 1>hot spot for the topic. Sure sounds like and there's

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<v Speaker 1>someone who grew up in earthquake country out in Washington State.

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<v Speaker 1>I can just imagine when it feels to go from

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<v Speaker 1>almost no earthquakes to several. Rob Barnett, thank you so

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<v Speaker 1>very much, part of our Bloomberg Intelligence team in Washington,

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<v Speaker 1>d C. Senior energy policy analysts for b I. This

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