On liability issues concerning induced seismicity in hydraulic fracturing treatments and at injection disposal wells: What petroleum engineers should know

The rates of oil and natural gas production in the United States have increased dramatically during the past decade, largely due to the use of hydraulic fracturing and horizontal drilling. This has benefitted the U.S. economy and generated hopes that the "shale revolution" could be replicated elsewhere. At the same time, however, public concern has grown regarding potential adverse impacts that tracing or other operations like gas flooding, waterflooding, waste disposal, and other production processes may have. One of the main public concerns relates to induced seismic events - that is, man-made earthquakes. Geologists have concluded that a variety of human activities can induce seismic events. Such operations include the operation of injection disposal wells, though a relatively small fraction of such wells are suspected of inducing seismic activity. Further, available public data shows that, on very rare occasions, hydraulic fracturing itself has caused tangible seismic activity. Although such events have been uncommon, they have attracted significant public attention and strengthened the opponents of oil and gas development. Further, although seismic events induced by oil and gas activity appear to have caused little damage, the potential legal liability could be substantial if such an event ever caused significant damage. Accordingly, industry should give increased attention to minimizing the likelihood of such events. The paper provides context for this issue by briefly reviewing information regarding recent cases of induced seismic activity, current technology for monitoring these events, and the inherent limitations in measurements and interpretation involved in using these techniques. This paper also discusses techniques that operators can use to reduce the likelihood of induced seismic events at hydraulic fracturing sites and at injection disposal wells. These include use of pretreatment geomechanical analyses to assess the likelihood of significant seismic events and, in appropriate circumstances, to guide a modification in perforation clusters design to reduce the likelihood of nearby fault reactivations. Finally, the article provides additional context by discussing relevant laws, including regulatory responses to suspected events of induced seismic activity and the possible legal theories for imposing liability for such events. The new regulations will compel operators to take certain actions and the potential for legal liability may incentivize additional action.