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U.S. oil company shakes up quake plans after Oklahoma temblors

by Reuters
Tuesday, 24 November 2015 12:00 GMT

By Liz Hampton

HOUSTON, Nov 24 (Reuters) - Phillips 66 has overhauled how it plans for earthquakes, a sign U.S. energy companies are starting to react to rising seismicity around the world's largest crude hub in Cushing, Oklahoma.

The changes include new protocols for inspecting the health of crude tanks, potentially halting operations after temblors, and monitoring quake alerts.

The revisions, fully implemented in 2015 and first detailed to Reuters this past week, appear to mark the most significant acknowledgement by a major energy company that its seismic procedures were recently updated.

They also come as some researchers say tougher standards for energy infrastructure such as pipelines and tanks could be needed to handle an uptick in quakes since 2009 in Oklahoma.

Scientists have tied a sharp increase in the intensity and frequency of quakes in Oklahoma to the disposal of saltwater, a normal byproduct of oil and gas extraction work, into deep wells. Oil fields have boomed in Oklahoma over the past decade thanks to advances in hydraulic fracturing and horizontal drilling.

A 4.7 magnitude quake struck in Oklahoma on Thursday, the strongest temblor there since 2011. About a month earlier, a 4.5 magnitude quake hit near Cushing. Regulators responded by calling for nearby disposal wells to shut or curb intakes.

Phillips, a refiner, has 167,000 barrels per day of pipeline capacity and 700,000 barrels of storage tanks at Cushing, home to about 57 million barrels of crude and a nexus for U.S. supply, according to a 2015 investor presentation.

Though its new protocols apply to all its U.S. infrastructure, when asked specifically about potential Cushing risks, Phillips said its "seismic response protocol was developed as part of our enhanced geohazard program, which addresses geotechnical, hydrotechnical and seismic hazards."

To be sure, most oil companies test the integrity of tanks on an on-going basis and many told Reuters their tanks are built to the latest construction standards and building codes.

But some scientists are questioning whether standards should be tightened.

Geologists led by D.E. McNamara of the USGS said in a September academic paper that including human-caused quakes in the National Seismic Hazard Model, a reference for engineers, "would result in serious implications for design standards."

Currently, man-made quakes are also not accounted for in tank standards published by the American Petroleum Institute (API), an industry group, and design loads from the American Society of Civil Engineers.

Strong quakes in regions outside Oklahoma have split steel as rolling ground motion puts the weight from the liquids on one side of the tank, known as "elephant footing," said Thomas Heaton, a professor at California Institute of Technology.

Engineers told Reuters most tanks in Cushing rank in Seismic Use Group 1, the weakest classification in API standards. TransCanada Corp said its seven Cushing tanks are in SUG 1.

The largest quake in Oklahoma was 5.6, a level with potential to damage tanks. Tanks normally have containment berms to catch leaking oil.

"Anything more than a 5.0 you have to worry about a little more," according to Muralee Muraleetharan, a civil engineering professor at the University of Oklahoma. (Reporting By Liz Hampton; Editing by Terry Wade and Christian Plumb)

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