FI L ED - Oklahoma Corporation Commission

FI L ED
BEFORE THE CORPORATION COMMISSIO
OF THE STATE OF OKLAHOMA
FEB 262015
COURT CLERKS OFFICE OKC
CORPORATION COMMISSION
OF OKLAHOMA
-
APPLICANT:
COBALT ENVIRONMENTAL
SOLUTIONS, LLC
RELIEF SOUGHT
COMMERCIAL DISPOSAL
WELL (FORM 10 15)
APPLICATION NO.
1500180133
PD 201400129
LEGAL DESCRIPTION:
COBALT MARIETTA SWD #1,
NE/4 NW/4 NW/4 SECTION 24,
T7S, RIW, LOVE COUNTY,
OKLAHOMA
REPORT OF THE ADMINISTRATIVE LAW JUDGE
This Cause came on for hearing before Michael Porter, Administrative Law Judge for the
Oklahoma Corporation Commission for the State of Oklahoma, on the 26th day of November
2014, in the Oklahoma Corporation Commission's Courtroom, Jim Thorpe Building, Oklahoma
City, Oklahoma, pursuant to notice given as required by law and the rules of the Oklahoma
Corporation Commission, for the purpose of taking testimony and reporting to the Oklahoma
Corporation Commission.
CASE SUMMARY:
Applicant made a request for administrative approval to develop a commercial disposal
well in the NE4 NW4 NW4 of Section 24, Township 7 South, Range 1 West Love County,
Oklahoma. The Application was opposed by Falconhead Home Property Association. The
Protestants are concerned about the effect the location of the disposal well may have to their
property. Applicants maintain they have followed the rules of the Oklahoma Corporation
Commission and should be granted an order to operate the commercial disposal well in Section
24, Township 7 South, Range I West Love County, Oklahoma.
RECOMMENDATION:
It is the recommendation of the Administrative Law Judge that Cobalt Environmental
Solutions, LLC be granted a permit to operate a Commercial Disposal well in Section 24,
Township 7 South, Range 1 West Love County, Oklahoma as requested in PD 201400129.
Report of the Administrative Law Judge
PD 201400129
HEARING DATES: November 14th and 15th 2012
APPEARANCES: Russell Walker. Attorney at Law, appeared on behalf of the Applicant
Cobalt Environmental Solutions, LLC (Cobalt).
Eric King, Attorney at Law, appeared on behalf of Turner School District
and Luther and Doris Malone.
Darryl Roberts, Attorney at Law, appeared on behalf of Falconhead
Home Property Association (Falconhead).
Keith Thomas, Attorney at Law, appeared on behalf of the Underground
Injection Control Department of the Oil and Gas Division, Oklahoma
Corporation Commission (UIC).
FINDINGS AND SUMMARY OF EVIDENCE
FINDINGS:
1.
PD 201400129 is the Application of Cobalt Environmental Solutions, LLC to operate a
Commercial Disposal Well in the NE/4 NW/4 NW/4 of Section 24, Township 7 South, Range 1
West Love County, Oklahoma.
2.
The Commission has jurisdiction over the subject matter and notice has been given in all
respects as required by law and the rules of the Commission.
3.
The following numbered exhibits were accepted into evidence on the 261h day of
November 2014:
#1.
0CC document regarding the Traffic Light system
#2.
0CC paper regarding its approach to seismic activity in Oklahoma
0.
Oklahoma Geological Survey Position Statement on Triggered or Induced
Seismicity
44.
Aerial Photo Map showing the area in and around Falconhead and proposed
Cobalt SWD Well
#5.
Oklahoma Department of Environmental Quality TOPO map showing the DEQ
drainage basin, Cobalt SWD, Falconhead, Turner Schools, Public Water Supply
Wells, Wellhead Protection areas and Total Retention Lagoon
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#6.
Oklahoma Department of Environmental Quality TOPO map showing Walnut
Bayou, Impaired Water body, Impaired use: Primary Body Contact Recreation
due to Enterococcus
#7.
Oklahoma Department of Transportation Map of Love County with superimposed
fault lines shown in the Marietta Basin
#8.
Earthquake and Fault Map showing where witness believes a fault actual is
located
#9.
Comparison of Richter Magnitude Scale and MMI Values
#10.
Well Plat for Cobalt Marietta SWD #1 Commercial Disposal Well showing a fault
near the proposed well location
#11.
Stick Cross Section showing the deep fault near proposed Cobalt Marietta SWD
#1 with no faulting above 10,600 feet
#12.
Well Plat for Poteet #1-16 Commercial Disposal Well showing a fault near the
well
#13.
Stick Cross Section showing a deep fault near the Poteet #1-16 Commercial
Disposal Well that is about 2000 feet below the disposal formation
#14.
0CC Base Treatable Water Map of area around Falconhead and Cobalt Marietta
SWD#1
#15.
Well Log from Woodruff #1 showing no treatable water between 495 feet and
640 feet
#16.
Well Plat showing wells within
Marietta SWD #1
V2
mile and 1 mile of the proposed Cobalt
917. Cobalt Marietta SWD #1 well schematic
#18.
Stratigraphic Cross Section of wells near the proposed Cobalt Marietta SWD #1
well
#19.
Well Logs for the Frisco Energy Campbell #9-14
SUMMARY OF EVIDENCE
Prior to hearing evidence regarding the proposed Cobalt Marietta SWD #1 well, Mr. King made
a statement regarding his representation of some of the parties to this proceeding. Mr. King was
allowed to withdraw his representation of Falconhead. A short In-Camera hearing was held that
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PD 201400129
has no effect on the evidence relating to whether or not the Application of Cobalt should be
granted for a commercial salt water disposal well.
Testimony of Charles Lord:
Charles Lord was called to the witness stand and testified as a petroleum geologist. He stated he
was the Program Manager of Underground Injection Control for the Oklahoma Corporation
Commission. He agreed he was one of the persons who primarily deals with the emerging
concerns about seismicity and saltwater disposal at the Commission. He testified that the
Commission has developed a categorization system by which they categorize the likelihood of a
seismic event resulting from a proposed or ongoing disposal operation. He said the Commission
has criteria that determines whether an application can be approved administratively or would
require a hearing. He indicated there are no seismic swarms within two miles of the proposed
disposal well in this case. Continuing, he said the latest seismic event in the area was within two
miles, stating it was a single event with a 1.5 magnitude, which is an event that can't be felt or
determined without instruments. He said the Commission is implementing a traffic light system,
developed by Stanford University, for wells that are in areas of high seismicity. Mr. Lord said,
based on information he viewed that morning, the location of the proposed well would not
qualify and the Commission would not put this under the traffic light system. He agreed but for
the protest, this application by Cobalt would have been approved administratively by the
Commission. Upon cross examination he testified that the Love County Saltwater Disposal
Number 1 was never a green light at any point. It was approved prior to seismicity concerns, thus
it was never in the traffic light system. He testified the well was shut in. He continued saying the
Commission issued them criteria to continue and they never began to inject after that point. He
said technically, that well was never under the traffic light system. He said that well did not
cause the institution of the traffic light system to be put in place. He said the Commission had
been thinking about the traffic light system prior to that well being drilled. He agreed no order
was entered by the Commission to shut that well in or to reduce injection into that well. He said
the Commission, through the Manager of the Oil and Gas Division, instructed the operator to
shut the well in. He agreed he had that authority. He said he believed the well operated for two
weeks. Mr. Lord was handed Exhibit 8 where he was asked to show where the Love County
Disposal well was located. He agreed the well was located below an indication of a fault line. He
said it was not on his map. He believed it was placed on the map by Oscar Goode. He said, to his
knowledge, he did not know if the fault line existed or not. He testified for clarification that
faults that are marked on this map (Exhibit 8) are received from the Oklahoma Geological
Survey and that the faults that have not been vetted. Continuing, he said we don't know the depth
of the faults nor how far up they come, and they are used in the permitting process. Personally.
Mr. Lord said he could not speak for the veracity of the faults. He agreed the map showed the
intersection of two faults where the proposed Cobalt disposal well is to be located. He testified
he had studied this application as it pertained to the protection of treatable water and for
seismicity. He agreed he was aware that the proposed site lies over two major aquifers in the
State of Oklahoma. He also noted he knew the base of treatable water, which was 620 feet at this
point, but was not familiar with the names of the aquifers. He admitted those aquifers were
identified in the protests that were filed. Mr. Lord said the Commission treats all aquifers the
same. If the water is less than 5,000 parts per million chlorides, he stated the Commission treats
it as fresh water. He testified there are many aquifers in the state and the Commission takes
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protection of treatable water very seriously. He testified the Commission protects brine water or
brackish water at 5,000 [sic] the same as we would fresh water at 50. He admitted he was not
aware if those aquifers are the sole source of water for a public water system that serves the
Falconhead development or residents outside of Falconhead. He said the map depicts the
seismic activity prior to August 4, 2014. He could not verify there was a well near the cluster of
earthquakes in the upper right area of the map. He said that was because there were no wells
shown there. He said he made the map on August 4, 2014, but that there were additions to the
map he did not put on the map. Mr. Lord admitted he saw the cluster in the area of a saltwater
disposal well near Wilson, Oklahoma. He stated he was not aware the well pressures went up in
the area of the Love County Disposal Well Number 1. He indicated that if anyone was aware of
the pressure going up, the operator of the surrounding wells would know. He added this was an
Arbuckle disposal well and the injection pressures were reduced to 375 pounds by the
Commission to overcome friction pressure. The Arbuckle in this particular area will take water
on a vacuum. In a conversation Mr. Lord had with that operator, the Commission was not aware
of anyone in that area having increased pressure on their wells.
Mr. Lord agreed he was acquainted with the Love County Disposal Well 1. He testified they
would have to go to hearing if they wish to start their well again. He said when they approved the
Love County Disposal Well 1, there was no seismicity that would have required a hearing. He
testified seismicity in the area at that time did not meet the criteria to go to traffic light and he
would agree that this particular well doesn't meet the criteria currently. Mr. Lord explained that
the reason why the Cobalt well need not go to traffic light is because he was not seeing a seismic
cluster within two miles of the well. He added any seismicity in the particular area is all less than
a 2.0 and normally people can't feel anything below a 2.5 according to seismologists. He said
they try to be fair and consistent as they are implementing the traffic light system. He testified if
there is a cluster of seismic events within two miles of a well, then they will go to traffic light. If
a well is within two miles of a stress fault as delineated by the OGS, then they will need to go to
a hearing. He admitted UIC did not request the hearing in this case. He admitted the criteria
necessary to get on the traffic light is not written down somewhere, but confirms it is a UIC
practice. He said there was nothing on paper because the criteria changes, and evolves as we
learn more. He admitted that if there is a seismic cluster two miles or closer to a proposed
disposal well or if it's within two miles of a stretch of stressed fault as delineated by the OGS,
then we would require the traffic light system and a hearing. He also admitted they would also
take into account magnitude of seismicity and past activity. He admitted the earthquake near the
Love County Number I was rated above a 3 point and less than 3.5. He said he was furnished
photos taken by field inspectors and Austin Holland of the Oklahoma Geological Survey. He
agreed there were objects that fell from shelves, pictures from a wall, bricks falling off houses,
and a chimney that had fallen over. He testified that on the Richter magnitude or Modified
Mercalli values and the damage would be consistent with a 5 on that scale.
Testimony of Oscar Goode:
Mr. Goode testified as an oil and gas consultant on the subject of petroleum engineering and
geology. He agreed he was familiar with this application and the relief sought. He testified there
has been a lot of resource activity in Love County for the Woodford and Caney Shale around
Marietta and to the west, mostly with XTO as the primary operator. Mr. Goode pointed out that
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Continental was also operating in the area. He testified these were horizontal wells using a
massive hydraulic fracturing technique with multi-stages and with large volumes of injection
water to recover the resource from the shales. He stated there is a need for commercial disposal
or disposal in the area. He added that most of the water from this location is trucked to Wilson or
in that area. Some of the water goes to Clarita, which is a long way away. He stated he had put in
a small disposal well for another client, to the east of Marietta, which will have limited capacity.
He testified when he did the initial work up for the exhibits, XTO had somewhere around 18 or
19 wells they had not filed completion reports on. He said, in his opinion, they were holding off
on completion because of disposal resources and fresh water resources available to them. He
agreed the facility is proposed to be constructed on a site Cobalt will be purchasing. He testified
the location was approximately 60 acres, located seven or eight miles west of Marietta on the
south side of Highway 32. He agreed the facility will set up a place where the water would be
offloaded and the disposal well would be on the tract, but some distance away from that the
offload area. Mr. Goode stated there was not an exhibit to show the facility itself. He said other
people are involved in the facility design, permitting, and construction. He added the facility
needs a way to handle the sand that's produced from flowback water, oil recovery capability, a
small amount of storage to help with the disposal operations and pumps, and some surface
storage to be used both for the oil and water. Since there was no permit at this time, he indicated
he did not know exactly what would be constructed. He agreed the water to be disposed of would
be offloaded on the west side of the facility with the possibility of it being pipelined in. He also
agreed the well would be on the east side of the facility because that's down gradient to the
Marietta Basin and the sands would be thicker. He then described what was shown on Exhibit
Number 4, which he stated was a Google aerial photo map. He testified it was highlighted to
show where the proposed well location and the retention lagoon associated with Falconhead is
located. It is also highlighted to show where Falconhead and Turner Schools are located. He said
Falconhead is a residential community with a golf course, clubhouse, as well as a resort in the
area. He said he thought the Turner School probably addresses the Falconhead community and
the surrounding area. He agreed the entrance to Falconhead is about three and a half miles west
of the proposed facility with the Turner School District another half mile west of Falconhead. He
then testified about Exhibit 5. He said it was a topographic (topo) map showing some additional
features including the public water supply wells that are of record with the OWRB, the DEQ
drainage basin. It shows the down gradient for the drainage basin is down to the Red River and
to the southeast. Mr. Goode testified there was a creek that goes south of the well and east of
Falconhead called Walnut Bayou, which is associated with Walnut Creek. He agreed it shows the
drainage would be away from Falconhead and the Turner School system. He testified Exhibit 6
was the topo map with the Walnut Bayou indicated in a red color. He said according to the
Oklahoma Department of Environmental Quality, the Walnut Bayou is an impaired water body
due to bacteria and is an impaired use for the body-for-body contact recreation. He said this
impairment is probably a result of agricultural grazing, septic systems, wildlife, and other
unknown sources. He said the reason for this exhibit is to show where the location of the creek is
relative to the total retention lagoon and its closeness to Falconhead. He said he presumes there
are septic systems in Falconhead. He agreed the closeness refers to the total retention lagoon to
Falconhead. Mr. Goode did not say the total retention lagoon had bacteria in it. He said the
Walnut Bayou did.
He then described Exhibit 17 shows how the disposal well is to be constructed. He agreed that
the well is proposed to be constructed in such a way that the fresh and treatable water will be
Report of the Administrative Law Judge
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protected from contamination. He testified the disposal well, as required by the Commission, will
have surface casing set at least 50 feet below the base of treatable water and would be cemented
to the surface. He said the Commission, especially on commercial disposals, will be present to
verify the cement is circulated. He said then the well will be drilled, logged, and a 7 inch
production string casing set at TD right above or at the Daubee Lime, which is a marker. He said
that would expose a significant volume of high porosity sands for disposal. Mr. Goode testified
he selected the bottom portion of the sands in the shallow well to be the disposal interval. He
said he thought there should be 400 plus feet of sands and, above that, another 300 to 400 foot of
sands that are acceptable for disposal. He said it was best to start deeper and then find out the
performance of the well. He said the well will also have a packer and packer fluid for corrosion
purposes and that everything will be corrosion protected as far as the injection tubing and the
packer is concerned. He added the casing will be cemented in accordance with or better than
Commission rules. He said he would either use a permanent packer or As- 1X mechanical packer,
which is a set-and-leave packer with an on/off tool. He added he likes to put a second seating
nipple below the packer to allow shut-in of the well. He testified the surface pipe would be a new
9 5/8ths OD, 36 pound per foot pipe. He agreed they would run a 7 inch production string inside
of the surface pipe clear to the bottom of the well. He also testified it would be 23 or 26 pound
casing which is much stronger than what is needed for that depth of well. Mr. Goode stated the
cementing would be done by pumping cement down the casing and circulating it on the back side
to bring cement to the surface. He agreed the well would be a relatively shallow well. He then
discussed that Exhibit 14 was a map obtained from the Department of Environmental Quality
(DEQ). He said DEQ has a data viewer and Exhibit 14 is a printout of that map, with blue
contours on the printout. He said he highlighted the values so that they are easier to see on the
contours. He added it shows the public water supply wells, the location of the Cobalt well, and
the location of a well that was drilled in 1964 near Falconhead. He testified he had a log that
shows the base of treatable water is above 495 foot. He discussed Exhibit 15 saying that there is
no treatable water where the casing is set at 495 feet. He said this supports his position because
there is an area of 400 to 500 feet of contours on Exhibit 14. So I believe looking at the log, the
base of treatable water is probably higher than what is being mapped. Mr. Goode agreed the
DEQ showed the base of the treatable water was slightly below 600 and that, for Cobalt's permit,
they would use the DEQ depths since the Commission will use that as the base of treatable water.
He testified the water sands will be in stringers. He testified that in looking at fresh water wells
in the area, there was no tabulation of sand shale sequences from OWRB. He also said he
thought Falconhead had a well that was 500 feet deep but that it probably ended up in shale. He
said that well was more than three miles away from the disposal well.
Mr. Goode said he believes the disposal formation would be the Cisco Sands. He estimated a
1900 foot top down to a depth of 3470. He testified he tried to locate the well where it has
maximum Cisco and Hoxbar Sands. He then explained his wellbore drawing. He said it shows a
base of treatable water at 6')0 feet. He testified the well drawing showed 9 5/8ths inch casing. He
estimated about 600 to 710 sacks to circulate cement. He said this is based on whole volume plus
excess and it will have lost circulation material in it because the sands are poor and this prevents
the cement from dehydrating too fast. He then said there will be a 7 inch production casing, with
either 2') or 26 pound pipe, which will remain unknown until they secure the permit. He said he
would not know until they get the permit. He said he intends to cement the 7 inch pipe to the
surface, but could not guarantee it would circulate to the surface because if there is some cement
lost due to water dehydrating out of the cement, it may fall back from the surface. He testified
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he has no problem with pressure due to the light weight cement that he uses. He said the cement
has additives to prevent it from shattering when it is perforated and that will cause it to adhere to
the well. He testified the dots on the left side of the weilbore edge indicated where the sands
were located, based on the logs to the northwest of the deep wells. He agreed the sands he was
referring to are the Cisco Sands and the Hoxbar Sands. He further agreed this is where the water
would be disposed. He said tried to locate the well where it has maximum Cisco Sands and
Hoxbar Sands.
Mr. Goode testified the green on Exhibit 17 would be the disposal fluid inside of the 7 inch pipe.
He said it was mostly flowback fluids which have bactericides and chemicals used for the
fracturing process and not a whole lot of chlorides. He agreed the drawing showed 4 1/2 inch or
5 inch tubing set with packers. The packers are required by Commission rules. He further agreed
the pink color would be the annular space between the long string and the tubing. He testified it
was filled with a fresh water fluid that's treated with bactericide and oxygen scavenger inhibitors
or an inhibitor which gets rid of corrosion problems. He said an inhibitor is not needed in that
closed space once you get rid of anything that could cause either bacteria or oxygen corrosion.
He agreed it will be coated tubing. He said the packer would be set within 50 feet of the top of
the perforations. He explained that if he was at 1900 or 1870, you take 1870 plus or minus 15 or
16 feet for your tubing length and that's where the packer would be set. He agreed the well will
be served by a flow line coming from the offloading facility which would be on the west side of
the property. He said the offloading facility is a sandy surface and that you have to concern
yourself with that type of material when you construct your facility. He continued saying that
you don't want leaks to permeate into the sand. He agreed Cobalt is considering a leachate
collection system and tanks on the surface. He further agreed that in his opinion this was the best
way to make sure that no pollution emanates from the offloading facility. He testified that they
are discussing the design part of preventing pollution and he had given them some basic
parameters. He indicated they have used another company before to do the actual design and
construction. Mr. Goode added they will be looking intently into this because they are concerned
with preventing pollution. He agreed that the fresh and treatable water will be protected from
contamination due to the way the well is proposed to be constructed. He then explained Exhibit
Number 16 was the well plat presented with the application. He said he prepared it and that it
shows the location of the well and offset wells within a mile radius of the well. He testified that
was done so that notice would be given to the offset operators of producing units or leaseholds
within a mile of the proposed disposal well. He stated L. E. Jones is one of the operators shown
and Frisco Energy is another operator a little farther than a half a mile away. He testified both
were notified and there had been no objections received from them. He continued saying those
wells were drilled as deeper wells and therefore have deep surface casing.
Mr. Goode then testified about Exhibit 18. He said it was a log cross-section of wells in the area
that extend to the north and to the south. He testified it shows, what he calls, the massive Cisco
Sands that are the primary disposal zone in the Hoxbar Sands. Continuing, at the bottom of it is
the Daubee Lime. The green sands are the sands that they are using for the disposal interval. The
yellow sands are significant additional sands that are available that would meet the Oklahoma
Corporation Commission criteria as disposal sands, due to how far their depths are from the base
of the treatable water. He said there is a significant volume of those high porosity sands and
,again, this well is starting out deeper. He stated the sands are widespread and, in his opinion,
they increase as you go to the southeast in the Marietta Basin, especially in the Cisco and
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Hoxbar. He testified he had multiple reasons to show Exhibit 18. He said one reason is to show
the large amount of disposal interval in these massive sands. Another reason, he said, is that it
shows backup sands if you had to come up due to problems. He testified that if you had a
problem or possible fracture from that well up to the surface of the ground, the massive sands
would intersect anything like that. He said Exhibit 19 is a multi-page exhibit showing a log of the
nearby well called the Campbell Number 9-14 where porosity and resistivity logs show the sand
in the right-hand column. It shows how much sand is present and the different intervals. Mr.
Goode testified the Campbell Number 9-14 is in the northeast southeast of 14. 7 South, I West
just to the northwest of the proposed location. He stated he color coded the upper sands and
possible sands yellow with the actual sand green, with the sands colored yellow and green for the
disposal intervals. He said the porosities are upwards of 25 to 27 percent or higher with 374 feet
of sands in the yellow, 305 feet of sands in the massive Cisco, and 232 feet of sand in the Hoxbar
based on this log. He said he expects similar sands in the new disposal well to be drilled.
Mr. Goode agreed they were asking for an injection rate of 19,000 barrels a day at 935 pounds of
disposal pressure, which is based on Commission guidelines for pressure. He testified that they
need to drill and complete the well and find out what it really can do. He said there are massive
amount of sands with high porosity. He said these sands are sands being produced to the north
for waterflood sources which may have depressured it some, although they are miles away. If the
permeability is right it should take 19,000, possibly more. He was not sure the well would take
19,000 barrels a day. He said the amount was dependent upon the size of the tubing. If it is 4
1/2" casing, that would restrict the well to 15,000 barrels per day. If it is 5" casing then the well
could take 20,000 barrels a day or less. He admitted it would be coded tubing and agreed he did
not know if they would actually need 935 pounds until the well was drilled. He said he is hoping
that it would be in the low hundred pound range. He said as time goes by he was sure the
pressure would creep up as the water was pushed farther away. He testified there was no threat to
the environment based on the construction of the well. Mr. Goode stated that, from the surface
activity, there may be a slight threat if there was a truck wreck, a spill from a truck unloading, or
a rogue truck driver dumping his load elsewhere, outside of the facility. According to Mr.
Goode. the Applicant has agreed to put three monitor wells along the west side of the property.
Mr. Goode agreed the wells would be monitored on a quarterly basis. regularly. He agreed that,
in some instances, the wells would be monitored on an annual basis for a number of different
substances and conditions that might be in the disposal water. In addition, he agreed that there
would be base lines determined from sampling and testing when those wells are first constructed
before any disposal operation begins. Continuing to agree with Counsel, Mr. Goode indicated
changes in the base line could be monitored to detect potential problems from those types of
spills at the offloading facility. He also agreed Cobalt has also agreed to carry ten million dollars
worth of insurance against any consequence of pollution from their facility.
When asked if he believes that saltwater disposal might actually in some way influence the
occurrence of earthquakes, he agreed. He said in certain instances it's slightly more than possible
that it could trigger a seismic event or, shall we say, trigger it before it naturally occurs. He said
he understands there are others who disagree with him. That said, he did not believe this could
happen with this disposal well. He testified Exhibit Number 1 was the recent Oklahoma
Corporation Commission position on seismicity concerning disposal wells that sets up a green
light, yellow light, red light traffic system. He said in his opinion this is a green light well.
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He then identified Exhibit 2 saying it was the position of the Oklahoma Geological Survey. He
said the Commission and the Geological Survey talk to each other. He added he thought both of
them think there needs to be additional data before they absolutely say what triggers seismicity.
He testified that when there is induced seismicity when a well is fractured, the rock is broken
open and that creates the sound signals for seismicity. He continued saying that is automatic, but
that is limited to that wellbore. Mr. Goode stated there is instrumentation where you can actually
see where the fractures are going if you look at it closely. He said that, most likely, that does not
automatically trigger earthquakes. He testified that disposal has indicated it might have more
potential to create early earthquakes over the fracturing process. He continued that if you're
going into the basement rock, which would be in the Ordovician Precambrian or Cambrian, these
deep rocks can have faults from the basement up into their section. He said if you are close to
those faults at the right position and the right conditions, it might be possible that it could trigger
a situation. He testified in this case they have 7,000 feet of sediment above any faulting. He said
there is no way any of the materials are going to get to those basement faults with the clastic
sediments with shales, limes and sands. He agreed that at 935psi disposal pressure, they would
not be exceeding the frac gradient and would not be fracturing the disposal zone. He also said
they would not be able to fracture anything down deeper either. He testified the guidelines of the
Commission not only include fracture pressure gradient, but also friction pressure losses.
Continuing, he said if you have certain tubular requirements you try to pump fluid faster than
what you have there. The Commission has no restraint on your pump capacity. In other words, if
you have a well that is authorized to take 5,000 barrels a day you can put a 20.000 barrel a day
pump on it. You're hurting yourself if you do that, but the Commission is not concerned with
that. The Commission is concerned with pressure at the wellhead. That has multiple components
such as the head of the fluid and the friction pressure. Therefore, most of the times the pressure
guidelines they have do not create any problems. He again agreed it was his opinion that the
proposed operation here will not induce any seismicity, which means lubricating a fault system
so that it would move earlier than it would under normal circumstances.
Mr. Goode then explained Exhibit 7. He said it was an Oklahoma Department of Transportation
(ODOT) map. He testified that some disposal wells and some horizontal wells were shown in
red, and green showed the location of the Marietta Cobalt well and Falconhead. He stated it also
shows a fault. He said the faults are explained on additional exhibits. He testified that shown on
this map is the Roman SWD Number 2 and the LCD Number 1. The LCD Number I is the well
that might have triggered a 3.4 magnitude earthquake in Love County. He said he thought an
earthquake occurred after they started disposal, about seven to ten days at 6,000 or 7,000 barrels
a day. This well is also next to the Criner Hills, which is an Arbuckle at the surface situation
where you have actual basement faults showing at the surface. Mr. Goode said if you go just a
short distance south of that area, the Arbuckle is at 15.000 feet. He stated he thought if it did
have an effect, it affected those Criner Hill faults right there where it's located. He testified the
fault near the location of the proposed well was at 10,500 feet and he agreed the well would be
disposing no deeper than about 3400 feet.
Mr. Goode said Exhibit 8 was a fault map obtained from Mr. Lord of the UIC (Underground
Injection Control) and it shows also some earthquakes have occurred in Love County. He said
the map shows the Cobalt well and the Falconhead area. He stated the map shows natural
earthquakes have gone on in the Falconhead area, which are not very high magnitude in the
range of 2, 2 1/2 or less. It also shows another large earthquake or swarm of low energy
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earthquakes in the very northwest of the map, as well along 1-35 to the northeast center of the
map where the LCD well was, as well as the recent earthquake that was in the 3.4 range. He
testified he also shows a fault up/down next to that. He stated he noticed that one of the
completion reports said that XTO cut a fault on one of their horizontal laterals, which is where he
put a question mark and a fault. This is located north of Marietta, more specifically north of
Highway 32 where it intersects 1-35. There's a black line with a question mark and they showed
that a well crossed a fault on the lateral. He said he disagrees with the location of their fault. He
stated it is shown going south of the Poteet disposal well and, in his opinion, the fault goes near
it. We agree, based on rk49, the position is otherwise. He agreed he was speaking about the area
with the Poteet well, the fault, and earthquake which are right next to the label Township 6
South, Range 1 East on Exhibit 8. He stated he thinks there might have been some seismicity
triggered by the Poteet disposal well.
He testified Exhibit Number 10 is a map he prepared based on the Herndon map for well
locations and it shows the Cobalt well and wells he used in the stick cross-section. He said he
placed the deep fault he thinks goes near there. He shows the relative up side is to the southwest
and the down side is into the Marietta Basin to the northeast. He also outlined the Falconhead
area as well as the Red River and Texas border. He stated it is an index map for his stick section
that shows the basement fault in Exhibit 11. He said Exhibit 11 is a one-to-one stick section, with
the horizontal scales as one unit and vertical scales as one unit. He said the wells were the
Anschutz Corporation Campbell Number 8-14 and the Frisco Energy 9-14 originally drilled by
Anschutz Corporation. He testified if you look at Exhibit 10 there is a dry hole symbol in the
northeast quarter of Section 14. He said that dry hole symbol is the 8-14 and immediately to the
south of it, is 9-14. He said those two logs were used to determine the stick section on Exhibit
11. Continuing, he testified that, on the stick section, he shows Cisco Hoxbar disposal interval in
green to the right of the depth scale but on the left-hand of the stick. He shows the Frisco 9-14 as
the up dip well on the Muenster Arch feature. He said the Anschutz Campbell 8-14 well is on the
Marietta Basin side of the feature. He testified that starting at the top, all of the formations dip
into the Marietta basin. He said the formations gain thickness as you go into the basin of all these
clastic sediments. He stated as you get down to what he calls marker A, which is a
Pennsylvanian marker, the Viola in the Frisco well in the south is below the Woodford. He said
in other words, there is a Viola/Penn Unconformity, then going below to the down dip side there
is the Penn/Woodford Unconformity. He states there is a fault between those two wells. He
testified the fault has to go no higher than about 10,400 feet to 10,600 feet in depth. He indicated
the disposal interval is separated by about 7,000 feet of sediments from the base of the disposal
interval. This is by a series of sand, shales, and limes that are called clastic. He continues by
stating these types of materials tend to get clastic with the heat and temperature and the
overburdened pressure as depth increases. He said they do not fracture between them.
Mr. Goode agreed, on Exhibit 8, there are two lines depicting faults running northwest to
southeast very near the proposed disposal location. He testified that it does not indicate that there
are two faults running through the area. He stated there is only one fault and that it was his
interpretation of where it goes based on well control. He agreed the placement of where he
thought the fault was is different than where the OGS shows the fault. He further agreed the
wells were 1900 feet apart with a 200 foot structural decline in the Dees over a 1900 feet span.
He added that it was probably more like 180 foot difference. He agreed there was some
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significant down dip trend and a thickening between the wells. He said the downdip trend
continues to the southeast, as the Marietta Basin trends to the southeast.
Mr. Goode then discussed Exhibit Numbers 12 and 13. He agreed they appeared similar to
Exhibits 10 and 11. He said Exhibit 13, has a green line showing the disposal interval in an offset
commercial disposal well. He said the disposal well has been operating for a long time. He
testified on Exhibit 12 the two producing wells are to the east of that commercial disposal well,
which was north of the proposed location. He said the disposal well? was in Section 16 of
Township 6 South, Range 2 West. He said on Exhibit 8 it would be the green triangle shown
with a red outline. He added the two dots represent the producing wells near that disposal well.
He agreed that, in his interpretation, Exhibit Number 8 shows the disposal well is about as
close to the northwest southeast trending fault as is the proposed location in this case. He
testified that he thought that the disposal well defines his fault trace, which is where I drew the
solid line on Exhibit 8. He gave a narrative explanation of Exhibit 13 as a one-to-one stick
section the same scale as Exhibit 11. He said there is a couple thousand foot of normal sediment
above the basement type fault. He stated in one well the Viola is at about 8800 feet, with the
Mississippi Caney at about 10,000 foot. He indicated there is some fill in there that is sort of
jumbled up and it's hard to say exactly what it is. He said what this means is that the fault doesn't
carry through. He said he is showing that the fault carries through to the Viola and into the base
of the Penn in that area. He testified there has been no seismic activity shown at that well and, in
fact, the only thing shown is a small seismic activity a couple miles to the east. Then there is a
cluster of activity that was there prior to the disposal well, most of it less than four or five miles
northeast [sic] of the well. He said he got the permit for the disposal well but did not construct it.
He said he had reviewed it and worked with his client on it. He said it has been there ten or
fifteen years and that it was disposing into the Hoxbar and Deese. He agreed it would be the
same as what Cobalt is asking for in the Cisco and Hoxbar or the Hoxbar and Deese. He added
this is the lower interval and that the Hoxbar also goes below the Daubee Limedown to the
Deese. He agreed in ten years, as far as he knew, no seismicity has resulted from this particular
well. He testified he thought he has a practical example showing that 2.000 feet above the fault
shows no seismicity. He added he thought there will be some natural risk already there. The well
is not going to create any increased risk. He agreed the natural risk is just the natural stresses that
are on various faults as a result of the movement of the tectonic plates below the elastic
sediments that sit on top of them. He indicated there was a need for the disposal well due to
activity by XTO and others in the area.
During cross examination by Mr. King, Mr. Goode indicated it was his understanding that three
monitor wells were placed on the west side of the property, but that he had no details about those
monitoring wells. He agreed there are a number of elements that are going to be tested and that a
base line is going to be established as a starting point. He agreed that Chloride, hardness,
magnesium, potassium, pH, sodium, specific conductance, electric conductivity, calcium,
alkalinity as CAC03, TDS or TSS will be tested every three months. He also agreed the testing
will be done independently by a third party, not the company that is injecting the disposal. In
addition, he agreed every year they will test for iron, benzene, toluene, xylene, ethylbenzene,
diesel range organics and total petroleum hydrocarbons, BTEX and other solvents. He said in his
opinion the testing of all of these elements will adequately protect the owners who lie to the west
of the proposed injection well.
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Mr. Roberts conducted a cross examination of Mr. Goode. Mr. Goode was asked if he
determined that the site location lies over the Antlers Bedrock Aquifer from his research for his
testimony regarding this disposal well. Mr. Goode replied that he knows the Antlers is a
widespread area that contains varying degrees of water and different sands and clays. He
continued, stating that if you look at the few OWRB well records available, you will see some of
the sands aren't saturated in the Antlers according to the drillers.
There was back and forth discussion between Mr. Goode and Mr. Roberts concerning the well's
proposed location and the Red River Alluvial Aquifer. Mr. Goode admitted he knew the Red
River Alluvial Aquifer lies over the Antlers. He further admitted looked at the general state maps
that were available on the DEQ site as well as OWRB site. Mr. Goode stated he did not look at
the Red River Alluvial Aquifer as he was more concerned with any aquifer that was at the
proposed well location. He said whether you call it Red River or the Antlers, he thinks the
alluvial is recent sediment at the surface whereas Antlers is more widespread. He added alluvial
can mean a river bed, too, as well as what is between its banks. He said Alluvium is not
necessarily defined as a hydrologically sensitive surface geology, but it's a general term for
recent sediment. When asked what research was done for the preparation of the exhibits relating
to this disposal project and his testimony to determine if this proposed well site was over an
aquifer, Mr. Goode answered he looked at the surface geology and what data he had on fresh
water wells in the area. He said there were quite a few in the Falconhead area. If you go outside
of the Falconhead area there are not as many. He also looked at the hydrological atlases
published by the Oklahoma Geological Survey. He indicated he was familiar with the Oklahoma
Water Resources Board maps of aquifers in the State of Oklahoma from 1974. He was asked if it
would make a difference whether there was a Red River Alluvial Aquifer under this site. He
responded that it would depend on if it is classified as a complete aquifer and he did not know if
this site was or not. He said the KA on the map indicated the site is Cretaceous Antlers. He
continued saying that the surface geology shows it to be the KA, which is Antlers at the surface
with the K standing for Cretaceous.
He said on an overall basis, we have to protect it because it's all the same based on the way we
treat fresh water and brackish water to the standards of 5,000 chlorides. If it is the Red River
Aquifer or the Antlers, Arbuckle. the Oogalah or whatever the aquifer is, we have to protect it.
He could not say this relates to a well in Mr. Robert's backyard as it may be an alluvial sitting
and may not be on an aquifer.
A discussion was had between Mr. Goode and Mr. Roberts concerning the distance to features at
Falconhead. The matter was thoroughly discussed by the parties. The result was Mr. Goode
testified he knew where the airport is on the map, the location of the retention lagoon , and that
the water wells are located about 2 1/2 or more miles away as determined by using the topo map
on Exhibit 5. He was asked about the Van Eaton well, identified as Woodruff Number 1. He
indicated he did not inspect that well because it was plugged and covered up. The well site was
also covered up and, therefore, not inspected.
Mr. Goode agreed that the proposed site lies over the Red River alluvial aquifer and that the
Antlers probably ducks under it. There was then a discussion between Mr. Roberts and Mr.
Goode regarding the three classes of wells and who regulates which class. The essence was the
n
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Oklahoma Corporation Commission regulates oilfield wells which are Class 2 wells. Mr. Goode
agreed Class 1 and 3 wells are regulated by the Department of Environmental Quality (DEQ).
Mr. Goode estimated the top of the Hoxbar at Falconhead would be somewhere around nineteen
hundred to two thousand foot range. He said the Hoxbar on Exhibit 11 was between 2,300 and
2,350 feet on the left side of the drawing and on the right 2,400 feet plus. He said that
Falconhead dips, so the depth depends on what part of Falconhead you were located.. He said
that in any part of Falconhead it would be about 1,965 feet. He said the Beaver well was one and
three quarter miles from the proposed Cobalt disposal well. He could not say what the dip was
from the Beaver well to the proposed well until the disposal well was drilled. Looking at top of
the Hoxbar in Exhibit 11 to the Beaver well, Mr. Goode said it looked like the top of the Hoxbar
would be 340-345 feet higher at the Beaver well. He agreed the Hoxbar is trending up towards
Falconhead. He added the master [sic] arch, which is the major structural feature, causes the
Hoxbar to trend up at that location losing sand as it goes up on the arch.
There was an extended discussion relating to where the 10 acres, of the 60 acre tract owned by
Cobalt, would be with the disposal well location. Mr. Walker clarified the off-loading was going
to occur on the west side of the tract and the water is going to be taken east to the well
somewhere on that sixty-acre tract, inside a ten-acre area. Mr. Walker added it was an
application for the permission of a disposal well located on a ten-acre tract, which happens to be
a part of a sixty-acre ownership tract. Mr. Goode described the location of the 60 acre tract as
part of the northwest quarter northwest and part of the southwest northwest, with Highway 32 as
the north boundary. Mr. Goode said the notice was given from the ten acres.
Mr. Goode was asked what formations would provide the fluids to be injected. He answered that
it would be from fluids that were injected into the Woodford and fluids from Red River or water
wells. In other words, frac fluids or flow-back fluids would be used. Mr. Goode explained that
the Woodford formation does not contain water in its own right, it is a resource shale. Continuing
his narrative, any water that comes out of it and the water that will come out of the Woodford is
most likely water that was injected into it during the frac stimulation. He testified it was his
understanding that XTO built a system to take water from the Red River to use as frac fluids for
these wells. He said produced water, by Commission rules, only comes after you recover all the
injected fluid, which would mean that all of the fluid that comes from the frac wells would,
necessarily, be flow-back. He said they anticipate the majority, if not all, of the water will be
flow-back water. He indicated there could be other formations involved, but he had no idea what
they would be.
Mr. Goode testified the application calls for nineteen thousand barrels a day to be disposed in the
well. He agreed there were 42 gallons per barrel, and that would be 798,000 gallons. Mr. Goode
clarified that was the rate requested in the application, but was not necessarily what will go into
the well every day. He agreed that would be 6,900,000 barrels of water in a year. When asked
about the capacity of the disposal formation , Mr. Goode answered millions of barrels per acre.
He added the formation expands and gets thicker as you go into the basin and it should have the
capacity to take the water. He indicated he had no idea what the velocity would be from the tenacre application tract to other tracts of land until he finds out what the well is doing. He said he
had not made any velocity calculations. He also said the water might go to or trespass under
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other parties' land, but that he did not know if it would. He testified that all the wells in the area
penetrate Red River and Antlers aquifers.
He said the Arbuckle south of there takes a severe dip or steps down within echelon faulting. He
said that things were different along the boundaries of the Marietta syncline. He stated the
boundaries are pretty sharp at depth and are not as sharp or muted heavily at shallow. He agreed
the line immediately north of the syncline is the Criner Hills. He testified it?(the boundaries or
the dip?) begins to the southwest of the Criner Hills. He stated Falconhead is 12 to 15 miles
away and not immediately next to Criner Hills. He added Criner Hills is on the north boundary of
the syncline and Falconhead is past the south boundary. He did not agree the syncline runs from
the Criner Hills to Sherman, Texas. He said he did not know if it ran to Sherman. Texas, but he
knew it ran quite a ways. He said there could be other features before you get to Sherman. He
said the Arbuckle took a significant dip south of the Love County No. 1 well. He added that
about five miles to the south the Arbuckle was at fifteen thousand foot versus being at four
thousand. He said he thought it was an echelon faulting because it drops down. He agreed he was
familiar with the surface feature, Rock Creek, just to the east of the proposed Cobalt well. He did
not agree a road cut at that location exposed Woodford or Springer at the surface. Sedimentarywise, Mr. Goode agreed the formations in that area have draped over. He stated they were not
suddenly forced, but rather folded in a gentle manner and then they disappeared. He testified
because of the structure of the Muenster Arch, the sands thin up on the structure. He said it took
two to three miles for the Arbuckle to drop from 4,000 feet to 10,000 feet. He stated he calls that
echelon faulting and not necessarily draping over. He testified he thought they may have been
faulted down instead of falling over.
He agreed the proposed agreement had a list of substances that were to be tested. He did not
recall if Chromium six was to be tested. He testified he had not seen a list of substances that were
to be tested, but agreed there was a list. He did remember that BTEX was one of the substances
to be tested. He testified he understood there was to be a quarterly testing period and a yearly
testing period for different items. He continued saying he thought the quarterly test was for the
OSU lab type of testing and the other had additional testing, including BTEX, hydrocarbons,
other stuff. He added he did not know what was on the exact list. He also stated he was not
familiar with the studies of the Oklahoma Water Resources Board regarding chromium six along
the Red River. He also said he did not know if any of the fluids that are going to be injected in
this well will come from areas that contain chromium six, nor did he know if there is any or has
been any reported detectable chromium six in Love County.
Mr. Goode agreed that one of the fault lines on Exhibit 8 was placed there by the Oklahoma
Geological Survey and that he provided the other line. He said the line he added was because of
well control. He said the fault is actually different than what the Oklahoma Geological Survey
showed. He agreed that no one was disputing whether or not the fault placed on the map by
Oklahoma Geological Survey was not present. He said he was making a correction to where he
thought the fault is located. He said he looked at the Oklahoma Geological Survey stress fault
map, and the fault didn't show up. He did not think the faults shown on Exhibit 8 run along with.
nor are in, the same lay of the land as the Meers Criner Hills fault. He said the Love County No.
1 is just to the south of the surface outcrop of the Arbuckle at the Criner Hills. He testified the
Arbuckle is exposed at the surface in Criner Hills. He stated the faults in the Criner Hills run
from the southeast to the northwest, but in the Meers they run from the southwest to the
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PD 201400129
southeast at different angles. He added there are many faults in Criner Hills including cross faults
and other things as it is a chopped up area, and that is why the basement faults are right near the
surface. He testified the Commission concerns itself with the basement faults and if the
Arbuckle, for part of this determination, will affect any type of seismicity. He indicated there has
not been any seismic activity at the Poteet well location. He testified that most of the seismic
activity was to the northwest of the Poteet well and prior to the well beginning disposal
operations. He also testified there has been essentially no activity near that Poteet well since its
inception.
CONCLUSIONS AND RECOMMENDATIONS
After taking into consideration all the facts, circumstances, testimony, and evidence presented in
this cause, the ALJ recommends the application in PD 201400129 be granted as requested by
Applicants, subject to further action by the Commission, should conditions relating to seismic
activity warrant such action or other actions deemed by the Commission necessary to protect the
health, safety, environment, or welfare of the residents of the State Of Oklahoma, including but
not limited to prohibiting the use of this well for disposal. The Applicants have complied with
the Commission's rules regarding disposal wells as to the protection of the treatable waters,
notice, and construction of the disposal facility to prevent surface pollution. The evidence did
indicate there is a fault near the site of the proposed well. However, the uncontroverted evidence
showed this fault did not extend into the proposed disposal formation, thus it is not expected to
cause seismic events. Commission staff presented no objection to the proposed disposal well
based on seismic events. The evidence indicated there have been no cluster of seismic events
within two miles of the proposed location, thus the well site was not within the "yellow" or 'red"
light traffic light system.
RESPECTFULLY SUBMITTED THIS 26th day of February 2015.
42t
Mi chael J. Porter
Administrative Law Judge
kIi
cc:
Russell Walker
Darryl Roberts
Eric King
UIC
Michael Decker, Director of OAP
Oil-Law Records
Commission File
16