Tuesday, 31 March 2015

Oklahoma Earthquakes Rattling the Fracking Industry

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Sandra Ladra was sitting in her recliner in her home in Prague, Oklahoma, on the evening of November 5, 2011, when the largest earthquake in the state’s history shook her house so violently that her chimney collapsed, sending stones through the roof and hitting her legs. Said Ladra: “I nearly went into shock. You just really don’t think you’re going to live through it.” She added, "It was just like an explosion or something. The rocks and the cement from the fireplace were hitting the fireplace so hard it was like a white fog in here [with] everything falling off the walls."

The earthquake was rated at 5.6 on the Richter scale which, according to the U. S. Geologic Survey, “can cause damage of varying severity to poorly constructed buildings. At most [there is] none to slight damage to all other buildings [but the quake can be] felt by everyone.”

Two and a half years later, Ladra, with the help of some attorneys, filed suit against a couple of oil and gas producers, claiming that their drilling activities nearby — specifically their disposal of waste water — were the cause of the 2011 quake. No doubt embittered by her experience (it cost more than $75,000 to repair the damage to her home, and she still has pain in her knees from the incident), she is asking the companies to reimburse her for her expenses, plus an amount “that will punish the energy companies for their reckless disregard for public safety and deter them from such conduct in the future.”

In October a trial judge dismissed her case, concluding that she must first take it to Oklahoma’s Corporation Commission and prove “a scientific basis” for her claim that the earthquake was caused by the energy companies’ disposing of the waste water by pumping it miles beneath the earth’s surface.

The reasoning goes like this: The water, pumped under pressure, seeps into soft rock and sandstone causing underground “sinkholes” that collapse, sending shudders upward to the surface. Some experts think the water often acts as a lubricant as well, allowing rock formations to shift, also resulting in earthquakes.

The number of earthquakes and the amount of fracking have both been going up in Oklahoma, though correlation does not necessarily mean that there is a cause-and-effect relationship. Between 1972 and 2008, the USGS recorded just a few earthquakes in the state, but since then, coinciding with the expansion of fracking, the number of earthquakes has gone vertical. In 2008 there were more than a dozen; in 2009, 48; and in 2010 the number of earthquakes exceeded 1,000. The 2011 5.6 magnitude earthquake that brought down Ladra’s chimney also destroyed 14 other homes in the area.

In December the Oklahoma Supreme Court, in an unusual decision, agreed to review the lower court’s dismissal. Ladra’s attorney, Scott Poynter, is prepared for World War III. Previous lawsuits by families suing developers have been settled out of court for undisclosed sums. This time Poynter is looking to persuade a jury that the connection is real and can be proved. Said Poynter: “The science has been there since the 1960s to link injection wells to earthquakes,” and both the USGS and the Oklahoma Geological Survey (OGS) have confirmed a connection between the oil and gas boom and the increase in seismic activity in the state. This is a reversal of a previous position by the OGS which said in March 2013 Ladra’s chimney collapse was most likely “the result of natural causes.”

The oil and gas industry is getting nervous. Even if the state’s highest court rules against Ladra, it will likely order her insurance company to pay for her damages. That company will then no doubt sue the state’s regulator in an attempt to get off the hook. If that fails, the insurer could then sue the waste water well operators.

Bob Gum, a lawyer defending one of the companies charged in Ladra’s lawsuit, said this could be a game-changer for the industry: “The legal risk associated with operating them will become uninsurable.” Steve Everly, a spokesman for the energy industry’s Energy in Depth, said the Ladra lawsuit “is definitely something that has risen to a level of fairly high concern.”

Oklahoma’s seismologist, Austin Holland, isn’t that concerned, at least not yet. Poynter will have to work hard to prove the connection, he explained:

Broadly, we can say it looks like there are some strong correlations [between the wells and seismicity] but when you zoom in, the quakes aren’t happening next to the wells, [which is] where you’d expect to find them.

Given the glacial nature of the legal process (it took more than two years for Ladra to be persuaded to file her initial lawsuit, and many months before it was initially dismissed), it is reasonable to expect delays and appeals to give the industry more than enough time to determine what to do with the waste water. Already some developers are reusing the waste water in the fracking process in new wells, while others are treating the water on site. Still others are investigating getting state approval for waste water wells to be drilled in unpopulated areas.

But one woman from Prague, Oklahoma, just might have set off a seismic legal anomaly that, in time, could rock the oil and gas industry to its foundations.

 

A graduate of an Ivy League school and a former investment advisor, Bob is a regular contributor to The New American magazine and blogs frequently at www.LightFromTheRight.com, primarily on economics and politics. 

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