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USGS revises seismic risk map to include quakes caused by humans

The seismic risk maps are used by emergency management officials as well as the country's major engineering and design associations to guide how strong to construct buildings.

"By including human-induced events, our assessment of earthquake hazards has significantly increased in parts of the U.S.," Mark Petersen, Chief of the USGS National Seismic Hazard Mapping Project, said in a statement.

Some 7 million people in the Central and Eastern United States live or work in areas threatened by so-called induced seismicity, and in parts of these regions, the damage caused by earthquakes could be at parity with that seen in high-hazard regions of California, the USGS said.

Oklahoma is at the greatest risk for hazards associated with induced seismicity, the USGS said, followed by Kansas, Texas, Colorado, New Mexico and Arkansas.

Oklahoma in 2015 experienced 907 magnitude-3.0 or greater earthquakes, compared with just two of similar size in 2009. In February, a 5.1-magnitude temblor shook the area around Fairview, Oklahoma - the third strongest recorded in the state.

The uptick in quakes has prompted serious concern among locals, particularly those in close proximity to the oil storage hub at Cushing, Oklahoma, which is home to some 66 million barrels of oil and the delivery point for the widely-traded West Texas Intermediate futures contract.

"We have had some earthquakes that were way to close to those tanks," said Michael Teague, Oklahoma's Secretary of Energy and Environment.

The disposal of saltwater - a natural byproduct of oil and gas drilling - into wells has been tied to earthquakes. Oklahoma regulators have already ordered many wastewater well companies to curb operations.

The USGS said building code committees are still determining whether to include induced earthquakes in their revisions, in part because they could be temporary.

The American Society of Civil Engineers is already in the process of publishing 2016 guidelines that do not take into account man-made earthquakes.

But the group does not anticipate updating those standards again until 2022.

"There is always a delay in design codes adapting the USGS Seismic Hazard Maps," said Muralee Muraleetharan, a civil engineering professor at the University of Oklahoma.

Abengoa has won approval from 75 per cent of creditors it needs to push through a restructuring plan that it hopes will help it avoid the biggest corporate bankruptcy in Spanish history.

The heavily indebted renewable energy group had required the support of 60 per cent of lenders by Monday morning to secure a standstill agreement, designed to give it more time to convince the market that its restructuring plan is viable.

Ahead of a hearing in its home city of Seville, the company announced that 75 per cent of lenders had backed the agreement.

The news suggests that the company, which has a debt pile of €9.4bn, is likely to secure the level of backing it needs to press ahead with the full restructuring — also three-quarters.

“This key step in the restructuring process of Abengoa . . . will permit the company to complete the Financial Viability Plan that has already been accepted by lenders in order to stabilise business and protect its leadership in the energy and environmental sectors,” the company said.

A person close to Abengoa said it expected to have the deal implemented by May or June, when new management will be in place. Delays in the Spanish legal system and the complexity of the agreement present the only risks to the deal falling behind schedule, the person said.

“This is good news for Abengoa,” said Maxime Kogge, an analyst at Spread Research. “It appears to have gone quite smoothly. Now the company has to work hard to rebuild confidence among its suppliers and trade partners in the sector.”

Under the restructuring proposals, Abengoa would receive €1.5bn-€1.8bn in fresh funding. The company raised €137m in emergency loans last week to pay suppliers and staff wages. Those lenders that extended the funding, which included Elliott Management, KKR and Oak Hill Advisors, would receive 55 per cent of the equity in the company. Investors, would be among the new backers.

Existing creditors, who face a 70 per cent haircut as part of the restructuring deal, would get 35 per cent of the shares in compensation. The shareholding of existing equity holders, including the founding Benjumea family, would fall to 5 per cent.

“There have certainly been some mistakes along the way with Abengoa,” said Pedro Nueno, emeritus professor of entrepreneurship at the IESE business school. “But it looks like the business plan it now has in place is the correct one. It has been able to raise some short-term cash, which shows that investors want it to keep breathing. The cost to everyone involved of Abengoa going bankrupt is high — the creditors also have a lot to lose.”