Agenda Memorandum

Date
21 February 2012

Memorandum to Chairperson and Members Taranaki Regional Council

Subject:
Item: Approved by:

Hydraulic fracturing and seismic activity in Taranaki

9 G K Bedford, Director-Environment Quality B G Chamberlain, Chief Executive

Document: Purpose

1005661

The purpose of this memorandum is to advise the Council that GNS has prepared a report to the Council, An assessment of the effects of hydraulic fracturing on seismicity in the Taranaki region. The report was not ready for distribution at the time of agenda preparation and will be tabled at the meeting and be available on the Councils website www.trc.govt.nz . Staff will present the key facts and findings of the report at the meeting.

Executive summary
An assessment of data from the GeoNet seismic monitoring network was undertaken by GNS to determine whether there was any evidence of an effect upon seismic activity within the region from hydraulic fracturing (HF) or deepwell injection activities within the region. GNS further evaluated the potential for HF activities to have an effect on seismic events. The detailed report sets out the findings of the assessment and evaluation, in respect of the magnitude, frequency, timing, or distribution of seismic events.

Recommendations
That the Taranaki Regional Council: 1. 2. 3. receives the memorandum Hydraulic fracturing and seismic activity in Taranaki notes the assessment was prepared by GNS utilising date from the GeoNet seismic monitoring network established in Taranaki notes the assessment concludes that there is no evidence that long-term deepwell injection activities in Taranaki have had any observable effect on natural earthquake activity notes the assessment concludes that there is no evidence that hydraulic fracturing activities in Taranaki have had any observable effect on natural earthquake activity

4.

5. 6.

notes the assessment concludes that it is unlikely that hydraulic fracturing would induce any earthquakes in the Taranaki region that would have a significant effect notes the assessment concludes that there is no evidence that hydraulic fracturing or deepwell injection activities in Taranaki would have any observable effect on volcanic activity notes the regulation of hydraulic fracturing and deepwell injection activities will be further considered in the review of the Regional Fresh Water Plan (2001) notes the report will be distributed and made available to key and interested stakeholders.

7. 8.

Background
Members will be aware that at the Policy and Planning meeting of 24 November 2011, the Committee received a report, memorandum, and presentation on an assessment of the hydrogeological risks associated with the practice of hydraulic fracturing (HF) of hydrocarbon reservoirs in Taranaki between 2000 and mid-2011, that had been undertaken by the Council. The detailed report set out the results of the assessment and drew out a number of key findings. The oil and gas industry co-operated with the Council in providing the hydraulic fracturing data for the risk assessment. The key findings of the Councils assessment included as follows: Oil and gas companies operating in the Taranaki Region that have undertaken hydraulic fracturing operations between 2000 and mid-2011 provided data for this investigation and assessment. The data provided shows that during the period a total of 43 hydraulic fracturing activities were undertaken in 28 wells accessing oil and gas reservoirs that are up to 4 km underground, with the majority deeper than 2.4 km. The shallowest fracturing that has occurred is at 1.15 km at the Manutahi well sites and at 1.75 km at the Cheal well sites. These relatively shallow activities were assessed in more detail in the report. The assessment found that if managed and regulated according to good practice, there is no credible risk to shallow groundwater aquifers in the region. The assessment had been independently peer reviewed by the Institute of Geological and Nuclear Sciences. This dealt to one of the main community concerns raised around the practice of hydraulic fracturing. However, a second concern has centred around whether the practice of HF can lead to increased seismicity (more earthquakes, and/or earthquakes of greater severity). In early November 2011, local and national news media, and international social media, picked up on a report published in the United Kingdom, that stated it was highly probable that hydraulic fracturing related to gas production near Blackpool had triggered two nearby earthquakes of magnitude 2.3 and 1.5. There has been some suspicion in Ohio, Oklahoma,

and locations in Europe, that earthquakes in a particular location were linked in some way to nearby HF activities. Articles were published that expressed concern about whether earthquakes could be caused in New Zealand in a similar way. Council staff have received several items of correspondence either asserting generally that HF can cause earthquakes, or that particular earthquakes were the result of HF activity within the region. Even prior to the recent increased speculation, Taranaki Regional Council (TRC) asked GNS Science to determine if there is any evidence for hydraulic fracturing triggering seismic activity in Taranaki, how that is assessed, and what the effects on people and structures could be if hydraulic fracturing were to trigger earthquakes in Taranaki. The report being presented at todays meeting is the conclusion of GNSs investigation into whether seismic activity as a result of HF has ever been detected in Taranaki, and whether it is possible that HF could cause seismic events of a magnitude that could cause adverse effects.

Discussion
Seismic monitoring in Taranaki is carried out by GNS Science through the GeoNet project . GeoNet operates seismic monitoring sites (seismographs) throughout New Zealand at an average spacing of about 100 km. There are additional seismographs at a closer spacing in Taranaki to provide specific monitoring for volcanic activity at Mt Taranaki. The regions network was installed in 1993 and has been operational since 1994. In the last decade it has been upgraded to state-of-the art equipment and has been expanded considerably, to give better coverage of the entire region. The sensitivity of the system is such that its ability to locate and catalogue individual seismic events is compromised by the seismic signals caused by surf breaking on the regions beaches, as well as by traffic on roads. While an individual site can detect very small events nearby (down to approaching Magnitude 0), any signal must be detected by at least 3 sensors if the event is to be isolated, location and size confirmed, and the event catalogued. This restriction means that the lowest catalogue-able seismic event in the region is around M2.0. Putting that into human terms, a person inside a house immediately above the epicentre of a very shallow M2.0 event (ie worst case scenario) might experience a sensation equivalent to that induced by a truck driving past the house. The Taranaki region experienc es every year some 200-400 seismic events big enough to be catalogued, with 5-35 earthquakes above M3.0 and 0-5 above M4.0. Perhaps around 5 earthquakes each year are of large enough magnitude and shallow enough epicentre to be felt by an observer. GNS was asked to interrogate its entire catalogue of detected seismic events in the region, to see if there was any correlation with any HF activity. This study covers the period from 2000 to late 2011, the period for which the Council has comprehensive record of HF activity as set out in the study into the hydrogeologic risks of HF. The GNS study identifies the realistic maximum scope for an HF activity to have any conceivable link with a nearby seismic event. This evaluation identifies a maximum horizontal influence as being 5 km, and a maximum link in time as being 3 months. It should be noted that this analysis doe not suggest in any way there will actually be a causal link within those parameters; rather, it indicates that unless these criteria are met, there cannot be any possibility of there being any link.

Because the GeoNet system can locate earthquakes only to a general accuracy of 4 km on a regional basis (although much more closely in some areas), the GNS review sought to identify any seismic events that occurred within 10 km of any HF wellsite and within 3 months of any HF operation. In a region that experiences some 200-400 catalogued earthquakes every year in any case (some 3,300 seismic events over the course of the study period), the GNS study found only one earthquake event that could even meet these criteria, out of 43 HF events within the period. This one seismic event occurred some 3 months after the HF operation in question, and was located by the GeoNet system as being 5 km away from it (ie it could theoretically been as close as 1 km to the HF location, or alternatively actually 9 km away). Within the same distance criteria around the particular wellsite, 11 seismic events had occurred prior to the HF operation over the course of 6 years, followed by a spell of 5 years in which no events occurred, followed in turn by another seismic event a couple of months before the said HF operation. GNS noted some seismicity is to be expected on the fault in any case, and concluded in terms of the likelihood of triggered seismicity in this one case it is possible that hydraulic fracturing in June 2011 triggered seismicity, but with only one earthquake in the database the evidence for a temporal correlation is slim. The GNS report then goes on to consider whether it is plausible that HF could trigger a significant seismic event anywhere in the region. Having evaluated the properties of the geological structures of Taranaki, the report concludes that the possible maximum size of any HF event in Taranaki would be an event of Magnitude 2.0. An analysis set out in the report demonstrates that it is scientifically inconceivable that a damaging earthquake (which requires a minimum magnitude of M4-5, some 1,000-30,000 times greater energy than any HF event) could be caused by HF in Taranaki. The study concurs with a finding in respect of the Blackpool earthquakes, which is that they represented a worst case scenario (It can be noted in passing that the Blackpool earthquakes only just reached the threshold for human detectability). The GNS report concludes when placed in this context, it is unlikely that any earthquakes that may be induced by hydraulic fracturing operations in the Taranaki Region would have a significant effect. The GNS study then examines the potential for effects from deep well reinjection. This activity is one that is bundled within the public awareness with HF, although quite distinct in several key factors. In particular, while HF is undertaken as a single event and at high pressures designed to fracture the targeted rock formation, deepwell re-injection (usually of saline produced water that is part of the flow from a hydrocarbon-producing well) is undertaken over an extended period of time, with much greater volumes than HF, but at much lower pressures that are selected so as to not fracture the formation. Several stories from overseas that form part of the discussion around HF, are actually reporting on alleged effects from deep well injection activities. The GNS study concludes: There is no evidence that long-term deep injection activities, typically associated with waste water disposal at oil and gas operations in Taranaki, have had any observable effect on natural earthquake activity.

And in terms of perhaps the most significant question of all for the Taranaki region, the GNS study finds Given the location of hydraulic fracturing and deep well injection operations there is no evidence of any effect on volcanic activity at Mt Taranaki. The study notes that all HF and deep well injection activities in the region occur too far from the mountain to have any conceivable influence.

Conclusions
The GNS investigation and study brings scientific objectivity and robustness to a topic where comment is often emotive and fanciful rather than factual. It should introduce relevant and meaningful data to any decision-making process. The findings, both in respect of the evidence of a lack of effects to date, and in terms of the findings around the lack of potential for any effects in the future, are reassuring for the Taranaki region. Together with the earlier GNS report on the hydrogeological aspects of HF, and data that the Council is generating from monitoring activities and investigations, this Council is becoming increasingly well-informed on a contentious subject.

Decision-making considerations
Part 6 (Planning, decision-making and accountability) of the Local Government Act 2002 has been considered and documented in the preparation of this agenda item. The recommendations made in this item comply with the decision-making obligations of the Act.

Financial considerationsLTCCP/Annual plan

This memorandum and the associated recommendations are consistent with the Councils adopted Long-Term Council Community Plan and estimates. Any financial information included in this memorandum has been prepared in accordance with generally accepted accounting practice.

Policy considerations
This memorandum and the associated recommendations are consistent with the policy documents and positions adopted by this Council under various legislative frameworks including, but not restricted to, the Local Government Act 2002, the Resource Management Act 1991 and the Biosecurity Act 1993.

Legal considerations
This memorandum and the associated recommendations comply with the appropriate statutory requirements imposed upon the Council.