Oklahoma's new fracking rules aim to reduce earthquake risk

HOUSTON, Dec 20 (Reuters) - Oklahoma is imposing guidelines to reduce the risk of earthquakes caused by hydraulic fracturing in its oil-rich shale formations, the first rules in the state to target the controversial production technique.

The guidelines are aimed at the South Central Oklahoma Oil Province (SCOOP) and Sooner Trend Anadarko Basin Canadian and Kingfisher counties (STACK) formations, which are anticipated to account for most new oil and gas activity in the state, authorities said on Tuesday.

The moves by the Oklahoma Corporation Commission’s Oil and Gas conservation Division and the Oklahoma Geological Survey came as earthquakes in the state have risen sharply since the shale boom and the use of hydraulic fracturing, or fracking.

The guidelines, which go into effect immediately, require producers to implement mitigation plans following an earthquake of magnitude 2.5 or more and to suspend operations following a quake of magnitude 3.5 or greater.

While the guidelines are technically voluntary, the Oklahoma legislature this year gave the Oklahoma Corporation Commission powers to make compliance mandatory.

So far, directives have focused on curbing use of injection wells for the disposal of saltwater, a normal byproduct of production.

Oklahoma experienced almost 900 earthquakes magnitude 3.0 or greater in 2015 versus just two or three a year before 2009. A magnitude 5.0 earthquake in November near Cushing, Oklahoma, the largest oil storage hub in the United States, renewed concerns a quake could damage energy infrastructure.

That quake came just two months after a 5.8 magnitude temblor, the strongest on record for the state.

Production in the STACK and SCOOP may rise if oil prices keep rising following a deal last month by the Organization of the Petroleum Exporting Countries (OPEC) to curb output.

While STACK and SCOOP produce much less water than the Mississippian Lime formation, where most of Oklahoma’s quakes have occurred, some seismic anomalies have been observed in the area and are believed to be related to hydraulic fracturing.

“The commission isn’t concerned about it, but wants to give guidelines to make sure they don’t grow in magnitude. They’re taking it as a proactive approach to this new emerging formation in the SCOOP and STACK,” said Chad Warmington, president of the Oklahoma Oil and Gas Association.

A study in May found about 90 percent of earthquakes in Texas over 40 years were caused by oil and gas activities, and frequency of those quakes rose in tandem with the shale boom. (Reporting by Liz Hampton; Editing by Cynthia Osterman)