Over a two year period, the Barnett Shale area in central Texas, has had 68 recorded earthquakes. This area is a land flat, larger than England and includes the Dallas/Fort Worth metro area. Dozens of quakes rocked the area over a two year period, and it has left some fingers pointing at Chesapeake Energy Corporation (NYSE:CHK).
Chesapeake Energy Corporation (NYSE:CHK), who owns many of the oil and gas leases in the Barnett Shale, has been practicing a common procedure called fracking in the area for several years. Fracking involves pumping pressurized water into a drilled well in order to cause the rock veins to open or fracture.
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Some people believe that this could be a cause in the small earthquakes felt in the are over the last few years. Twenty three of these quakes were centered closely around high volume waste water wells. These wells are injection points, through which more than 150,000 gallons of water are pumped each month, according to Reuters.
A study authored by Cliff Frolich of the University of Texas at Austin, has been looking into the quakes. Frolich told sources in a phone interview, “Drilling never causes earthquakes. Fracking almost never causes earthquakes….While there are probably millions of hydro-fracking jobs, only a few have caused earthquakes, and they have all been little tiny earthquakes.”
Frolich stated that he believes fracking will only cause an earthquake if a nearby fault is experiencing “tectonic stress”, or in other words, if they were stuck. He says that pumping fluid under ground could cause the faults to free up and move. However, in order to actually test this theory, would require data that isn’t yet available.
British scientists and engineers reported on June 29, 2012 that drilling and fracking were not likely to cause large earthquakes.
All of this seems to relieve the blame from Chesapeake Energy Corporation (NYSE:CHK)’s shoulders, which is a good thing. They have enough problems with their former chairman, Aubrey McClendon being accused of borrowing from a company that Chesapeake Energy Corporation (NYSE:CHK) does business with. Chesapeake Energy Corporation (NYSE:CHK) has been under fire as well in Ohio, where land owners are arguin that Chesapeake is treating them unfairly in their leases.
Where will all this lead for the energy giant? We will have to wait and see. Chesapeake Energy Corporation (NYSE:CHK) reported earlier today, that their revenues were up 2%, thanks to the sales of some of their assets. The company rose as much as 4% in after market trading yesterday on the news.
(Please Note: In a previous version of this article, I mistakenly stated that Chesapeake Energy owned the oil and gas rights to the Barnett Shale, I have corrected that statement. Chesapeake owns many of the leases in the area, but there are many other lease holders as well. Thank You)