COVID-19 took the world into its grasp and the industries started shutting down all across the globe. Locomotive industries came to halt as the Earth took a break.
These recent conditions have created havoc for the oil industries. Not only are the oil prices in negative owing to plummeting demand, but the traders are finding it difficult to store the surplus oil.
With fewer sales and increased storage costs, oil and gas companies are exploring other storage alternatives, such as unconventional geological formations. Underground storage of oil and liquified gas is not a new concept, and the Strategic Petroleum Reserve has been around for quite a while now. There is a potential danger of the oil contaminating groundwater supply, but oil is kept in specially designed salt caverns. Unfortunately, these caverns are running out of space, and oil companies are out in search of other alternatives.
As mentioned above, they are looking to store oil underground in unconventional geological formations, i.e., outside the salt caverns. The Texas Railroad Commission has granted these oil companies to pump oil back into the ground and store it in the unconventional geological formations. This decision has triggered the environmentalists, as they fear the widespread contamination of the groundwater supplies.
Texas receives 60% of its water supply from nine major aquifers and they lie under the oil fields. As dangerous as unconventional underground oil reserves may seem, salt caverns are equally dangerous. Several explosions have been reported in the past inside salt caverns, resulting from leakages.
Hence, the safest way to store oil is, perhaps, to consume it. We do not know how long these conditions will last, and for how long the oil industry will have to suffer, but we do know that black gold is not black gold anymore.