Some Texas shale oil and gas producers could lose as much as half of their wastewater disposal capacity in key operating areas of the top U.S. oil field under a growing state crackdown to stem a surge in earthquakes, energy consultancy Rystad said on Jan. 6.

The Texas Railroad Commission, which regulates the state’s oil industry, in December suspended deep disposal wells in four oil-rich counties in West Texas amid a spike in tremors. Saltwater typically produced with oil and gas production often is shunted into wells drilled specifically to handle the wastewater.

West Texas experienced nearly 2,000 magnitude 2.0 or higher earthquakes in 2021, nearly double the prior year’s levels, according to Rystad. The earthquakes have not caused major damages.

But the state’s new ban will require producers in those areas to find other options to handle their wastewater, including piping or trucking it longer distances to wells that are underutilized on adjacent acreage.

“The cost dictates the adoption of such solutions,” Rystad said in the report.

A magnitude 4.5 quake near Stanton, Texas, in the last week of December further raised questions as to whether the regulator will take new actions to curb water disposal linked to the quakes.

ConocoPhillips, Diamondback Energy’s Rattler Midstream, NGL Energy Partners, Coterra Energy and Chevron Corp. have disposal wells in areas where the Texas Railroad Commission is shutting deep injection wells or is likely to reduce disposal volumes.

Those companies could face a loss of as much as 50% of their saltwater disposal capacity in key acreage positions if the state’s oil regulator takes additional actions, Rystad said.

Chevron said it was studying and piloting recycling, beneficial uses and other options for produced water as alternatives to underground injection. It is also participating in water consortiums in Texas and New Mexico, which are aimed in part at finding alternatives to wastewater injection.

Coterra did not immediately comment on the report. ConocoPhillips, Rattler and NGL Energy did not immediately respond to a request for comment.

When the state’s energy regulator shut the deep wells in an area northwest of Midland, Texas, in December, it cut top Permian shale producer ConocoPhillips’ disposal capacity by 186,000 bbl/d, Rystad said in the report.

Diamondback’s subsidiary lost 150,000 bbl/d of capacity.