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Oil, gas drilling has Oklahoma all shook up. Can anything be done about it?

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Forget California—Oklahoma is now the most earthquake prone state in the lower 48, according to the U.S. Geological Survey. And in this case, the reason appears to be man-made.

More than 900 magnitude 3.0+ earthquakes shook the state last year. So far in 2016, two earthquakes exceeded 5.0 – causing damage in several areas.

Scientists are pointing the finger at the oil and gas industry. Hydraulic fracturing, also referred to as fracking, is a method to extract oil and gas from the earth, and it's been around for decades. However, the amount of fracking dramatically increased in the last few years, helping drive U.S. oil domestic production to near 9 million barrels per day.

According to the Energy Information Administration (EIA), the number of fracking wells in the U.S. went from 23,000 in 2000 to 300,000 wells in 2015. Meanwhile, the output of oil from these wells made up more than 50 percent of the U.S. daily oil production last year.

But it's not necessarily the fracking that's causing Oklahoma's earthquakes: It's the disposal of fracking wastewater.

"With the increased production and increased production of wastewater, we've had higher injection rates and that's caused a lot of earthquakes. We feel them, at its peak, several times a day," Todd Halihan, a geologist from Oklahoma State University told CNBC's On the Money in an interview.

"Basically you're turning the air on an air-hockey table and getting the puck to move around. In this case we're getting pressure changes around faults," explained Halihan. "They already want to move and you're just allowing it to move a little easier."

While there are other technologies to dispose of the wastewater, such as recycling or evaporation, it comes at a higher cost.

"Injection is one of your cheapest ways to go," Halihan told CNBC. "Disposing of water costs about 50 cents a barrel, and so if you have 10 barrels of water per barrel of oil—you got about 5 dollars in disposal cost."

Halihan added: "You've got to try and figure out technologies that will work and management strategies that will work, and at the same time keep the economics in check."


Even though fracking is happening in other parts of country and the world, Halihan said Oklahoma's specific geography creates an added risk factor in the volume of earthquakes.

"Our formations have a lot more water, and so people producing a barrel of oil elsewhere are not producing as much water. We're getting about 10 barrels of water per barrel of oil on average….and the formation its going into is geologically more prone to have earthquakes than other areas."

Regulators responded to a magnitude 5.8 quake earlier this month by ordering a number of the disposal wells in the area to be shut down. However, Halihan said more research is needed to make decisions about the right course of action to stop the quakes.

The geologist acknowledges it's an expensive investment, but "in order to move forward we need information at what's going on at depth."


On the Money airs on CNBC Saturdays at 5:30 am ET, or check listings for air times in local markets.