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Disposal well operator challenges state agency over earthquake actions

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A disposal well operator is challenging a state agency over earthquake actions.

It all boils down to who has the authority to do what.

Does the Oklahoma Corporation Commission, the group that regulates the oil and gas industry, have the power to make a company reduce volumes or even shut down wells?

Marjo, an oil company out of Tulsa, said  no.

The company filed an application challenging the authority of the OCC to force a reduction in volume at its Payne County location - an action one lawmaker said is not surprising.

“Not even a little bit. This is one of those things identified as a problem about six months ago," said Rep. Cory Williams (D) Stillwater. "We've been discussing it. It's been an internal debate at the corporation, as to whether or not they are actually acting under clear authority."

Williams said, because of increased seismic activity, the legislature needs to enable OCC to truly regulate oil and gas.

“For years, the OCC regulatory authority with regard to oil and gas has been primarily pollution based. The protection of natural resources,” he said.

But, those are the exact provisions Kim Hatfield with the Oklahoma Independent Petroleum Association said the commission can stand behind.

“I think the commission has all the authority they need to enact the actions they have requested,” Hatfield said.

He said the commission has done a good job working with oil companies and Marjo's decision to challenge the commission is unfortunate.

“So far, everyone else has been able to work within the guidelines," Hatfield said. "We don't feel it's in the best interest to start out with a confrontation."

In response to an increase in earthquakes, the OCC has asked companies to make changes.

Most have done so voluntarily.

Williams said the OCC shouldn't have to rely on voluntary compliance.

“It should have a stick," Williams said. "It should be able to force a company to do the thing that it wants it to do or cease to exist in the state of Oklahoma."

An issue he hopes the legislator will take a look at next session.

As far as Marjo's complaint: a hearing was held today.

As a result of the hearing, the company will meet with oil and gas staff to talk about specific issues at their site.

If they can’t reach an agreement, this issue could end up in court.