Climate

This One Suit Could Take Down Oklahoma’s Oil And Gas Industry

CREDIT: AP Photo/Sue Ogrocki

Chad Devereaux works to clear up bricks that fell from three sides of his in-laws' home in Sparks, Okla, after two earthquakes hit the area in less than 24 hours. Oil and gas companies say the industry can't survive if they are held accountable for earthquake damage.

Less than a week after state regulators shut down seven waste disposal wells in Oklahoma, two companies being sued for earthquake damages are asking the case be dismissed.

Spess Oil Company and New Dominion LLC say that plaintiff Sandra Ladra waited too long to file her suit, which asks for $75,000 in damages stemming from being hit by falling rock when an earthquake struck her home and damaged her chimney. The earthquake was allegedly triggered by the fracking companies, who were conducting wastewater injection nearby.

“When you look at the actual science and you look at the data, you can’t help but go, ‘It’s the injection wells, stupid.’ It’s just that obvious,” Scott E. Poynter, Ladra’s lead attorney, told the Associated Press. “Oklahoma shouldn’t have more earthquakes than anywhere on the planet, but it does.”

Earthquakes have proliferated across Oklahoma in recent years as oil and gas production from fracking, or hydraulic fracturing, has exploded. During fracking, chemical-laced water is injected at high pressure into the ground, allowing pockets of trapped oil and gas to loosen and be captured. The process creates a huge amount of wastewater, which cannot be reused due to the chemical content and contamination from elements in the ground, often including oil itself. Fracking companies typically inject the wastewater into lined wells.

The U.S. Geological Survey has linked disposal wells to Oklahoma’s earthquakes, which have gone from one or two a year to an expected 941 this year. By August, the state had already seen more earthquakes than 2014, the previous record year.

EarthquakesOK

This data is expected to be a key part of Ladra’s case, which hinges on linking the activities of the companies to her injuries. The Oklahoma Corporation Commission, which oversees oil and gas production in the state, has clearly made that link. Last week, it shut down disposal operations at seven wells and told owners of 66 additional wells to reduce the volume of water being pumped into the wells. The state launched a website earlier this year to address the issue, but it has also passed a law prohibiting towns and cities from banning fracking.

If Ladra’s case prevails — and the companies are held accountable for damage they allegedly caused — the oil and gas in Oklahoma could be sunk, industry insiders say.

Kim Hatfield, president of Crawley Petroleum, told the Associated Press that the ramifications of finding the companies guilty would be Depression-Era bad for the state.

“Are you familiar with ‘The Grapes of Wrath’? This would make that look like a comedy,” Hatfield told the Associated Press. “That would be a self-inflicted wound of tremendous magnitude for the state, and oil companies will say, ‘We’re not going to drill in Oklahoma.'”

Earthjustice managing attorney Stacey Geis told ThinkProgress that suggesting Oklahoma’s economy would collapse without fracking is “fear-mongering,” and, moreover, paying for the damage caused by the industry is part of normal business practice.

“You, the industry, needs to pay the cost of your operations,” Geis said. “If that turns out to be uneconomical, than you need to rethink your economic model.”

Oil and gas is huge in Oklahoma. According to the American Petroleum Institute, a trade organization, Oklahoma is fourth in the country for natural gas production and sixth for oil production. Crude oil production in the state has nearly doubled since 2006, while natural gas production has increased by a third. The industry group claims oil and gas is responsible for more than a fifth of Oklahoma’s economic activity and employs 364,300 in “direct, indirect, and induced jobs.”

In June, the Oklahoma Supreme Court ruled that oil and gas companies could be sued for earthquake damages, but Ladra’s case is the first of its kind.

Geis said that fracking-caused earthquake damage is a good example of externalities. “It is a cost that is arising from these operations, and it is a cost that the the industry is asking the public and the communities to bear,” she said.

The presiding judge has not yet ruled on the defendant’s request to throw the case out because of when Ladra filed.

To give some timelapse context to Oklahoma’s rise in earthquakes, check out this video from the U.S. Geological Survey: