Obsidian Energy Ltd. OBE-T has been slapped with an environmental protection order for causing earthquakes with its oil sands operations in northwestern Alberta.
The order relates to a series of quakes that rocked the Peace River region in November and March, including one of the largest ever recorded in Alberta. The 5.6-magnitude quake hit in the early evening on Nov. 29, 2022, and was felt as far as 500 kilometres away in Edmonton.
Initial findings from the Alberta Geological Survey, a branch of the Alberta Energy Regulator, indicated that the quake was a result of natural tectonic movement.
But late on Thursday, the provincial energy regulator issued an environmental protection order against Obsidian, saying the Calgary-based oil and gas producer had induced the events with its liquid disposal operations.
The order was issued the same day Stanford University released a study that concluded the Nov. 29 quake was most likely caused by wastewater being injected underground by oil sands operators. It was the first study to link seismic activity in the area to industry.
Peace River is Alberta’s smallest oil sands region. Deposits there are deeper than around Fort McMurray, so instead of mining them producers use in-situ methods, in which steam or solvents are injected into the ground to recover the bitumen.
Wastewater used in the process is then pumped back into the ground. That can place pressure against fault lines and cause earthquakes.
The large Nov. 29 quake was part of a series of seismic events that began late that afternoon and lasted for around 24 hours. They were centred near Reno, Alta., a tiny rural hamlet about 40 kilometres southeast of Peace River.
Corinna Williams, the reeve of Northern Sunrise County, which includes Reno, described the quake as a wave of movement through her home. It shook pictures on the wall and bounced around china in a cabinet. And it prompted the municipality to revisit its earthquake emergency plans.
The Alberta Geological Survey set up seismic monitoring around Reno in December, in response to the earthquakes.
For the next few months, it kept an eye on the equipment and conducted research and analysis to determine the cause of the seismic activity, and whether regulatory intervention was required.
The next large quake hit on March 16, with a local magnitude of 5.1. The following day, the geological survey received new information from its seismic monitors and determined the earthquakes were related to Obsidian’s liquid disposal operation, including a well authorized for water disposal through injection into the ground.
The Alberta Energy Regulator said in its order that the unique geological features of the area also contributed to the seismic events.
Obsidian has seven days to submit a plan to the regulator and implement a series of immediate steps to reduce the frequency and magnitude of seismic events caused by its liquid disposal.
It has 15 days to take other actions, including establishing seismic monitoring in the area and installing other vibration measurement devices at various locations within a 10-kilometre radius.
Obsidian did not return a request for comment. On Friday morning, shares in the company fell as much as 4 per cent before markets opened. They rose later in the day and closed slightly down.
Emma Graney