No Room For Both In The Permian – Oil And Gas Versus Nuclear Waste

The Permian remains the premiere U.S. basin.

The peak of crude oil production in the Permian before the pandemic was 4.9 MMbpd. But production in the Permian will rise to a record 5.7 MMbpd in this month — May 2023.

Associated gas in the Permian has risen from pre-pandemic 17.4 Bcfd and will reach 22.5 Bcfd this month – a surge of 29%.

Five watchdog heavyweights forecast Permian crude oil production rising steadily through 2028 before peaking in the range of 7.3 – 8.0 MMbpd around 2030.

Federal forecasts suggest total U.S. oil production will stabilize in the range of 12.3 – 13.3 MMbpd through 2050. The Permian is an outsize contributor.

U.S. oil production in 2022 was 11.9 MMbpd and about 12% of global production and looks like a good bet to last the distance until 2050.

What is the potential energy clash in the Permian?

Are they building a nuclear power station in the Permian? No.

Are they wanting to ship nuclear waste into the basin? Yes. At least this is the plan that’s just been approved by NRC, the U.S. Nuclear Regulatory Commission, a federal outfit.

A nuclear waste repository in the Permian has been in the planning process for 5 years. The NRC has just approved a license application by Holtec International to build a storage site for radioactive nuclear waste just 60 miles from Carlsbad in southeast New Mexico (NM). This site lies in the middle of the Delaware basin, a prolific oil and gas partr of the larger Permian basin that extends into west Texas.

As reported this month, “The license would allow the Florida-headquartered company [Holtec] to receive, possess, transfer and store 500 canisters of spent nuclear fuel — a total of 8,680 metric tons of spent fuel — for 40 years. Holtec plans to eventually store up to 10,000 canisters throughout 19 expansions phases, according to the NRC.”

Risks were evaluated by the NRC at the Holtec site and included (1) failure of storage canisters, (2) potential sinkholes opening up, (3) playa lakes and aquifer contamination, (4) earthquake damage.

It seems the safety analysis, and the earthquake predictions, were done by Holtec before the shale-oil revolution took off in the Delaware basin around 2009. In fact, one Holtec graphic of earthquake probability was dated in 2009 (14 years ago) when the shale oil and gas technology was just a child in its Permian life. In 2009, virtually no produced water had to be disposed of and there were no induced earthquakes.

But earthquakes are sometimes associated with oil and gas production, and the proposed Holtec site is close to hundreds of oil and gas wells in the Delaware basin. The earthquake swarm south of Carlsbad in Figure 2 is about 60 miles from the proposed Holtec site.

So was the 5.4 magnitude earthquake of November 16, 2022. And the second M5 quake was only a little further away from the Holtec site (Figure 2).

So is there a risk of a large earthquake that could damage the canisters of hot radioactive material and allow it to leak out of the Holtec storage site? This is the risk issue that has been ignored so far.

It is clear that oil and gas operations that trigger earthquakes down below are not an ideal neighbor to a nuclear waste storage site at the surface – because dangerous earthquakes that can travel hundreds of miles have already been recorded in the Permian basin, including New Mexico. Let’s dive a bit deeper into this.

Earthquakes in the Delaware basin.

These are primarily caused by oil and gas operations, which are extensive in the Delaware basin. It’s the biggest and most active oil basin in the US.

Saltwater comes up from a well with oil and gas and must be disposed of. The cheapest way is to inject the waste water deep underground through vertical disposal wells. As the water accumulates in a layer underground its pressure rises and it spreads outward from an injection well. When it hits a fault that is at a tipping point (close to a stress imbalance) the fault may slip and give rise to an earthquake.

Government regulators monitor earthquakes in the Permian using arrays of seismic detectors. When earthquake numbers or magnitudes reach a certain level they mandate that water injections into the usual rock strata be reduced or directed into another strata, to alleviate the water pressure underground.

The recent history of earthquakes in the Permian basin of NM and Texas is shown in Figure 3. The bad news is that earthquakes were increasing exponentially before the Texas regulators stepped in during 2021. The good news is the regulations curtailed (but did not stop) the growth of earthquakes.

The similarities with Oklahoma are alarming. For every barrel of oil produced from a well in the Delaware basin, 3-10 barrels of water were produced. The ratio in north Oklahoma was 7-20 barrels water/oil.

In 2017, the Permian as a whole produced 63 billion gal or 1.5 billion bbl per year. A large fraction of this was injected in disposal wells. This enormous volume of water was as much as Oklahoma produced in 2015 when that state recorded 890 earthquakes of M > 3.

The largest three of the Oklahoma earthquakes – two of magnitude greater than 5 – caused significant damage to surface buildings in the period around 2015.

New Mexico legislation.

Here is a brief history of New Mexico’s actions on the proposed Holtec site to date:

· On November 16, 2022, the governor of New Mexico, Michelle Lujan Grisham, asked President Biden to oppose and block the Holtec initiative for a nuclear repository in southeast New Mexico.

· The letter listed potential physical threats to residents living in the area plus controversial effects on people and environment such as uranium mining and atom bomb testing related to past nuclear history.

· Physical threats included accidents at the site or accidents while nuclear waste is transported to the site that could spread radioactive material. It doesn’t take much – one leaky drum at the WIPP site in southeast New Mexico closed that facility down for 3 years and cost upwards of $1 billion to cleanup.

· The letter did not mention earthquakes despite the appearance of two quakes with magnitude greater than 5 which can cause damage to buildings. Fortuitously, one of these, M = 5.4, occurred on the same day, 3 pm on November 16, of the letter from the governor to the president.

Earthquakes are a real risk as shown by the increase in earthquakes in the Permian basin in recent years, most of which so far have originated in Texas, although many have been felt in NM. Although earthquake frequency has been trimmed by Texas regulators that have reduced the injection of produced water, the quake trend may increase in NM since volumes of produced water in the Permian increased exponentially through 2017.

So what is the current position of New Mexico view regarding the Holtec repository?

The NM legislature have recently passed 2023 Senate Bill 53 that “prohibits public agencies from granting permits for a nuclear-waste disposal project unless the state consents and other conditions are met”. The governor, Michelle Lujan-Grisham, signed the bill into law on the same day, March 17, 2023.

“It’s time that our voice be heard and honored, and that this project be shut down,” said state Sen. Jeff Steinborn, a Las Cruces Democrat who co-sponsored the state law intended to block the project.

The legislation addresses the environmental issue, first. This is because nuclear waste remains radioactive for thousands of years, with attendant risks of waste leaking out.

Second, the Holtec site is billed as a “temporary” storage site, when the feds haven’t worked out a plan or site for permanent storage of U.S. nuclear waste. What single state wants to end up on the receiving end of the waste from all the nuclear generating stations across the U.S.? What is especially disconcerting to many citizens of NM is that 10,000 canisters of spent nuclear fuel are planned to be shipped and stored in NM over 40 years.

It appears to be a standoff. The builders, Holtec International, are reviewing the situation and trying to decide their next step. One strategy would be to file a lawsuit against NM. Another would be to go home and drop the project. After 5 years of planning the project, it would be surprising if Holtec left quietly.

Takeaways.

It’s safe to say that oil and gas operations will continue through 2050 in the NM side of the Permian basin, and the potential for magnitude 5 earthquakes, although regulated by state governments, will remain.

It seems the safety analysis, and the earthquake predictions, were done by Holtec before the shale-oil revolution took off in the Delaware basin, and before the shale-induced earthquake problems in Oklahoma. In fact, one Holtec graphic of earthquake probability was dated in 2009 when there was virtually no produced water to be injected and no earthquakes.

The proposed site of the Holtec nuclear waste repository would be surrounded by hundreds of oil and gas wells. A definite risk is earthquakes induced by injection of produced water in disposal wells that lie near or far away. Produced water in the Permian had increased exponentially through 2017.

The earthquake risk at the surface of a site now surrounded by hundreds of wells needs to be re-evaluated, and is an additional reason to stop the development of the Holtec nuclear waste repository in southeast New Mexico.