Fracking’s New Nemesis: Earthquake Lawsuits

Despite widespread environmental concerns and community opposition, in large swathes of the US, the fracking industrial complex has seemed unstoppable. That may finally be changing.

One major risk, which we’ve discussed at length, is how many shale gas companies are deeply indebted and depend on continued access to cheap credit. With energy prices low, many are having to continue to produce to service debt, keeping the supply glut going longer than it would if more could afford to cut supply and wait for prices to recover.

But even if the more financially fragile and/or higher cost fracking plays go bust, for the most part, that means they’ll be restructured, with the lenders taking losses and the new buyers having a go with a cleaned-up balance sheet. Thus quite a few of the current shale gas operators will go away, but not their operations.

However, a more fundamental threat to the industry looms: that of costly earthquake litigation. Oklahoma is ground zero. In the last year, the state has had more earthquakes of magnitude 3.0 or greater than in the previous 30, including a 5.6 magnitude tremblor, the strongest in recorded state history. Two different geology journals attributed the quake to fracking activity in the immediate vicinity. The earthquake risk apparently does not result from the fracking (the fracturing of geological structures) per se but fluid disposal. From the Wall Street Journal:

[R]esearchers say the most serious seismic risk comes from a separate process: disposal of toxic fluids left over from fracking and drilling by putting it in wells deep underground. Geologists concluded decades ago that injecting fluid into a geologic fault can lubricate giant slabs of rock, causing them to slip. Scientists say disposal wells are sometimes bored into unmapped faults. The practice isn’t new, but has proliferated with the U.S. drilling boom.

Some states are trying to mitigate earthquake risk by limiting the depth and greatly lowering the injection rate of waste water. The Wall Street Journal story does not discuss what economic impact restrictions like that would have.

The article focuses on Sandra Ladra, who sustained injuries and whose home was several damaged in the magnitude 5.6 Oklahoma earthquake. She sued the operators of disposal wells close to the epicenter, New Dominion and Spess Oil.

Energy companies are worried about how much damage a successful suit could do. Again from the Journal:

Industry executives said a verdict against an energy company would be devastating. “If a lawsuit was successfully prosecuted that would have a huge impact,” said Kim Hatfield, president of closely held Crawley Petroleum Corp. in Oklahoma City and an official of the Oklahoma Independent Petroleum Association….

Bob Gum, a lawyer representing New Dominion, said at an October hearing that disposal wells—and the oil-and-gas industry broadly—would be jeopardized if the court allowed the lawsuits to proceed, saying: “The legal risk associated with operating them will become uninsurable.”

Ladra’s case was dismissed in lower court, based on the argument that the court did not have jurisdiction. However, the state Supreme Court had agreed to take it and to determine whether her case can proceed or whether she needs to go to state regulators first. Note that another homeowner in Ladra’s town sued the same well operators and is seeking class action status, so even at this early stage of this type of litigation, there is a lot riding on this decision.

The Oklahoma state insurance regulator has taken the point of view that insurers can’t wriggle out of paying out claims on earthquake-damaged homes by arguing the quakes were caused by fracking. So even if the Oklahoma Supreme Court rules against Ladra, he will presumably order her home insurer to pay the damage. They in turn would be likely to sue the regulator, since they don’t want to be stuck paying out on the upsurge of earthquake claims in Oklahoma and Texas. And if they lose a suit against the regulator, they would think hard about possible grounds for suing the disposal well operators.

Even with the fact set in Oklahoma appearing to be favorable to plaintiffs, new legal arguments often have a rough time in court. But that does not mean if Ladra is defeated that later lawyers, learning from her experience, won’t prevail. Indeed, some of the bigger players appear to have decided it’s best to keep these cases out of the press if possible. BHP Billiton and Chesapeake Energy settled a 2013 case lodged by five homeowners for a confidential amount.

Fracking has long looked like it is not worth the environmental cost. And while it’s been an uphill battle to win that political fight, fracking does enough damage that the costs to property will put a big damper on development. Most people would find that to be a very desirable outcome.


Print Friendly, PDF & Email


  1. PlutoniumKun

    I’m glad you’ve focused on the specific point that while fracking is associated with earthquakes, the most serious cause is not the extraction process, but the sub-surface disposal of the fluids – this is a point which confuses many non-specialists. Deep geology injection of wastewater is very much an American thing – so far as I know it is not done in any other country in the world – as one example, much secondary sewage wastewater in Florida is injected into deep sandstone beds. This really is a ‘cheap and cheerful’ way of avoiding proper treatment of contaminated wastewater from all sources. That it creates a potentially high earthquake risk has been obvious to geologists for a long time.

    I don’t think it is a fatal problem for fracking companies – there are alternatives, albeit not ones that are cheap. The main attraction of deep geology injection is that apart from being relatively cheap, it has the merit of making a problem seem to disappear, in comparison to having to, for example, build large impoundments which would treat through gradual soakage and evaporation, or through appropriate upgrades to municipal systems to allow them to take frack water. For example, there are no proposals to my knowledge in Europe for injecting frack fluid to geology – it simply would not be permitted under any national or EU code. All license applications in Europe propose different wastewater treatment methods.

    1. Jabba

      So why do we get fracking-related earthquakes in England then, if it is all deep-water burial and we don’t do that in Europe? Also there is apparently at least one report which appears to link earthquakes in Oklahoma to the fracking itself, not water dispoal. So maybe things are not as straightforward as you paint them?

      ‘Cases of clear anthropogenically-­‐triggered seismicity from fluid injection are well documented with correlations between the number of earthquakes in an area and injection, specifically injection pressures, with earthquakes occurring very close to the well.’

      1. PlutoniumKun

        I never said fracking didn’t cause earthquakes. It clearly does. However, those which can be ascribed to direct fracking are far less in intensity that those identified in Oklahoma and elsewhere with deep fluid disposal of frack fluid and other waste fluids. The primary hazard with fracking related earthquakes are to certain highly sensitive industrial uses such as microprocessor manufacture (which in certain places may alone be enough to create huge problems for the fracking industry). However, to my knowledge there have been no records of earthquakes caused by fracking which have caused any significant structural damage, and its questionable whether there is any theoretical reason why it can cause a major earthquake (although there is no consensus on this point among seismologists). This recent report does, however, strongly suggest there may be such a problem with subsurface wastewater disposal, which is a much bigger issue in the US than just frack fluid.

        Yves quite rightly makes the distinction in her article. There are many, many excellent reasons to oppose fracking, but confusing two largely separate issues to hype what is in reality a relatively minor impact (direct seismic impacts) does not do the anti-fracking cause any good whatever, because when it comes to proper scientific assessment, such arguments will not, under the current state of scientific knowledge, stack up.

      2. sd

        Coincidentally, there an interesting post over at Volcano Cafe on a little known volcano in the Netherlands that some are worried is waking up. The volcano sits just adjacent to a gas drilling platform and near salt mines that use brine extraction.

        Fascinating article.

  2. Jack

    I recently had an exchange with a ‘serious’ environmental activist. To paraphrase: he can’t stand all the damn stupid greenpeace-type idiot liberals who worry about ‘nonsense’ like earthquakes, flammable tap water and bomb-trains. He thinks we should stop focusing on distractions like that and oppose fracking for ‘real’ reasons.

    Oh, what’s that? Yes, he is aware our rail infrastructure got a pathetic C+ rating the last time it was reviewed. And yes, he is aware that there are 50x more oil tankers on the tracks now than in 2008. He still doesn’t see the problem.

    1. jrs

      Well if he’s opposing it on climate change grounds including the methane, that is the one that could be an extinction level event for the species and the planet. So I don’t think that priority is misplaced. But meanwhile, between here and extinction, water gets poisoned even in places drastically short of water, earthquakes happen, and trains blow up.

    2. different clue

      Did he say what those “real” reasons were? And did he explain why those “real” reasons would inspire more people to organize faster for anti-frack combat than silly little non-issues like poison in the only water source you have, earthquakes under-around your house, etc.?

    3. Otter

      Typical capitalist mole. “That group over there are not the right kind of socialists. We have to take them down before we can build our own pure solialist state.” “Those treehuggers don’t embrace the one true faith …”

  3. ambrit

    Oil and gas aren’t the only ones to do deep injection waste deposition. Our first property was five acres of semi swamp with a trailer on it in Bush Louisiana. About a quarter of a mile away was a small chemical plant that made dry copier for IBM. This plant pumped their waste into a, if I remember correctly, two thousand foot deep well. After a year or so, our water well started to produce “funny” tasting water. We have used distilled water for drinking and cooking ever since, no matter where we have lived. Just another of those pesky ‘externalities’ corporations dump on the general public. (We considered suing the plant for a new water well, but couldn’t afford the ‘seed money’ to get the legal ball rolling. We couldn’t find any pro bono legal representatives either. Another artifact of the financialization of “Modern Life.”)

    1. craazyboy

      I think fracking wastewater poisoning aquifers is more of a concern than earthquakes, at least outside of CA. In CA the little 5.0 tremblers were kinda fun, if you weren’t located right on the epicenter, until you realized it coulda been the Big One. But if you screw up an aquifer the damage is much more widespread and permanent. You can’t just sue and get money to fix it.

  4. wbgonne

    I think fracking is one of those areas that really illuminates how the United States has changed in the past 30 years. Businesses have always tried to evade being held accountable for their externalities. That is what the GOP’s war on lawsuits, activist judges and trial lawyers has been about: neutering the judiciary, one of the primary avenues for accountability. The anti-regulation project, which was joined by the Democrats as they turned to neoliberalism, proceeded simultaneously and was similar in intent but restrained the government executive from forcing the costs onto the businesses. But even that was not enough so the next level was to enact laws that actually prohibited legislatures from holding companies being held accountable for their externalities. That, of course, requires a fully subservient elective government and that is what we have today. When laws are written they are written by the industry and then enacted by the elected officials.

    I expect that laws will be proposed that will immunize frackers from environmental damages, including earthquakes. Will the science and the obvious damages be enough to stop the neoliberal onslaught?

    1. wbgonne

      Yes, excellent question. TPP represents the culmination of what I detailed above. Moving beyond state-by-state and even nation-by-nation takeovers, Big Business intends to run the world permanently. TPP sets the framework for that New World Order. So what happens if (when) the science and harms become so clear that states (or localities or nations) are moved to regulate or ban fracking? Big Oil will sue for lost future profits and, under TPP, Big Oil will likely win. This effectively guarantees that no such regulation or prohibition will be enacted.

      1. JTMcPhee

        And I guess it also guarantees that existing common and statutory law on negligence, assault, public and private nuisance, trespass, and all that will also be by the board. Interesting. People wake up one fine day and their kids have cancer and they now have to pay a corporation to have their drinkable water delivered and they have these sores on their bodies that won’t heal, and their grandparents tell them to “Sue the bastards!” and lo and behold, there’s an admission fee to get onto the public square where sit the newly privatized courthouse and Great Big Annex… And they get SLAPPed by some tribunal for even thinking about damaging the reputation of some post-national corporation by complaining or, God between us and the devil, filing suit for damages or injunctive relief…

  5. TomAZ

    When will the Oklahoma legislature take up legislation to shield the industry from any liability from earthquakes?

    1. mark

      They just have to pass a law declaring that there are no earthquakes in Oklahoma.

      Problem solved!

  6. Peter Pan

    I can recall as a child living in the Denver area during the 1960’s, all of the earthquakes that rattled our home and school. The disposal of waste fluids into a well and subsequent earthquake activity is far from being a new phenomenon. Here are some excerpted highlights.

    In 1961, a 12,000-foot well was drilled at the Rocky Mountain Arsenal, northeast of Denver, for disposing of waste fluids from Arsenal operations. Injection was commenced March 1962, and an unusual series of earthquakes erupted in the area shortly after.

    Then, on April 10, the largest since the series began in 1962 occurred; 118 windowpanes were broken in buildings at the Rocky Mountain Arsenal, a crack in an asphalt parking lot was noted in the Derby area, and schools were dismissed in Boulder, where walls sustained cracks.

    In September of that year (1968), the Army began removing fluid from the Arsenal well at a very slow rate, in hope that earthquake activity would lessen. The program consisted of four tests between September 3 and October 26. Many slight shocks occurred near the well during this period.

    Regarding Oklahoma and Texas, should the insurance companies have to pay out on claims by the homeowners for damages then I would anticipate the home insurance companies will no longer offer earthquake damage insurance in areas where fracking fluids are being disposed into wells.

    1. dw

      well insurance companies get a few choices to avoid paying for the damage. they can leave the state(s) and fix their pay out problem that way, or try to exclude damage from quakes. depending on the regulator, they may or may not allow the later, so they will do the former. course that will become a problem as mortgage companies will now have to take that into account (which ever choice) and either stop issuing mortgages, and raise rates where possible. or both. and of course loosing access to insurance will become a big problem for business, but if you are in an oil state your goose is cooked

    2. Night-Train

      Peter Pan:
      Good catch. Learned about the Rocky Mountain Arsenal deep fluid injection induced earthquake activity as a geology grad student in late 70s. Yet when the earthquake activity started in Arkansas a couple of years ago, O&G spokespersons pled ignorance. Par for the course. Deny, deny, deny. And if you get caught red-handed, deny some more. I wish those damaged by this man-made seismic activity well as they seek redress.


  7. direction

    And what if the new fracking wells cause earthquakes that damage nearby old ones holding even deadlier toxic crapola? This piece has been making the rounds lately and I didn’t see it in a quick search of NC, so either I failed to see it linked here or maybe it just slipped under your radar. Either way, it looks well documented. In the article are examples of:
    #1 Many other noxious substances buried in deep wells
    #2 Ties between these waste wells and 5.00 earthquakes going back to 1967
    #3 Radioactive waste found in water near a deep injection well at a government nuclear facility
    #4 More fun reasons to Hate on Halliburton.
    Here is a link to source material from ProPublica containing a wealth of other material and a handy graphic depicting well depths.

  8. ian

    I’m curious how the lawsuits would work. In many of these oil producing areas, you have many operators pumping waste water back down. Who’s to say who caused the earthquake, or whether it was really caused by the injection wells at all?

  9. Lyle

    Note that it is possible to treat the waste water but currently more expensive. If you raise the disposal fee charged to cover earthquake costs, then the economics will change and other methods will be used. As noted earlier in this chain Rocky Flats was the first case of waste water injection causing earthquakes. It should be noted that at the depths the fluid is injected most waters are already saline. (The deeper one goes the more likley water is to be saline so there is little chance of fresh water pollution and if it was going to happen it would already have happened. The waters in the reservior rocks are in general saline by nature already, and are shallower than the injection wells)

Comments are closed.