Can Energy Companies Be Sued for Causing Earthquakes?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Jan 20, 2016

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FrackingIs it possible to sue a company for causing an earthquake? A number of judges around the country are pondering that question. More are likely to do so in the coming years.

One of the key earthquake lawsuits is pending in the town of Prague, Oklahoma. Sandra Ladra was injured when an earthquake caused a fireplace chimney to collapse on her legs. She sued two oil and gas companies that operate injection wells near Prague, claiming that the disposal of wastewater after “fracking” was responsible for the earthquake that caused her injury.

A judge initially dismissed Ladra’s suit on the ground that only the Oklahoma Corporation Commission had jurisdiction to hear her claim. The Oklahoma Supreme Court rejected that conclusion and reinstated the lawsuit.

The Controversial Practice of Fracking

Hydraulic fracturing (or “fracking”) is a process that injects large volumes of water, sand, and chemicals into drilling sites under high pressure in order to release oil and gas by cracking rocks. The process creates wastewater. Injecting the wastewater into underground disposal wells is the most cost-effective way to dispose of it.

Fracking itself does not generally cause earthquakes, but a strong body of evidence suggests that the wastewater disposal process does. Researchers say they have found definitive links between disposal wells and earthquakes, particularly in Texas, Ohio, and Oklahoma.

States that have historically experienced little seismic activity, including Kansas, Oklahoma, and Ohio, have seen a dramatic increase in earthquakes in recent years. The increase corresponds to rapid shale oil and gas development in those states. Across the nation over the last three decades, 21 earthquakes of 3.0 magnitude have occurred in an average year. Between 2010 and 2013, there were more than 300 earthquakes of that magnitude.

Most earthquakes that have been associated with wastewater disposal after fracking are below 3.0 magnitude. Earthquakes generally do not cause damage until they reach 4.0 magnitude. Scientists are concerned, however, that the earthquakes linked to wastewater disposal are growing in both number and strength.

Ladra’s Lawsuit

Sandra Ladra was watching television in 2011 when a 5.0 magnitude earthquake shook her home, causing the rock facing to fall from her fireplace. The falling rocks caused significant damage to Ladra’s legs and knees.

Ladra’s lawsuit argues that New Dominion LLC and other entities in the oil and gas business acted negligently by engaging in an ultrahazardous activity — fracking and wastewater disposal — without taking the utmost care to avoid causing or contributing to seismic activity.

Having lost its motion to dismiss the lawsuit on the ground that the court lacked jurisdiction to hear it, the oil companies are now moving to dismiss on the ground that Ladra waited too long to file her suit. A decision on that motion is pending.

Other Earthquake Lawsuits

Scores of lawsuits around the nation have accused companies of polluting groundwater by their use of fracking. Lawsuits alleging that energy companies caused an earthquake are a fairly recent addition to the growing list of claims for compensation arising from fracking.

An Oklahoma class action lawsuit seeks compensation for property damage caused by earthquakes allegedly triggered by energy companies. A similar class action is pending in Texas.

At least a dozen earthquake-related lawsuits have been filed against energy companies in Arkansas. Most have been dismissed. Some have been settled on confidential terms. The lawsuits may have played a role, however, in the decision of the Arkansas Oil and Gas Commission to declare a moratorium on new injection wells within a 1,200 square mile area surrounding a newly discovered fault. A series of earthquakes revealed the existence of the fault after a number of new wastewater injection wells came online.

Should Companies Be Held Responsible for Earthquakes?

If Ladra can overcome the procedural hurdles to her suit, the possibility that she might win on the merits is unsettling to executives in the oil and gas industry. Lawyers and policy analysts have different opinions as to whether and when energy companies should be made to pay damages for the earthquakes they cause.

Energy company executives are complaining that “lawsuits such as Ladra’s could weaken the energy industry in Oklahoma and have devastating economic consequences.” Earthquakes also have devastating consequences, both to the economy and to injury victims. While one CEO told the Associated Press that it would be “a tragedy of monumental proportions” if oil companies stopped drilling in Oklahoma because of lawsuits like Ladra’s, the law holds businesses accountable for personal tragedies caused by their negligent acts. If companies cannot make profits without unduly endangering the public, they should either forgo those profits or be prepared to compensate the people they injure.

 

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