Last year we reported on a case in Oklahoma that involved allegations by a property owner that an oil company was negligent in causing an earthquake that damaged her house. Oklahoma has, what some would say coincidentally, experienced a massive surge in earthquakes at the same time that it has experienced a massive surge in fracking operations. The case, along with a string of higher-profile earthquakes, has made the state take a hard look at exactly how they are going to deal with the escalating problem. The solution, though, may leave homeowners and residents with a bit less in their wallets.
The case, Ladra v. New Dominion, asked the Oklahoma Supreme Court to determine what the proper venue is for a claim of negligence against an oil company; is it a state court or is it the Oklahoma Corporations Commission? A decision that found a state court is the proper venue would be profound because it would allow the Oklahoma court system to find a legal connection between fracking and earthquakes, which would open the door to allowing courts and juries to award damages.
While scientists around the world, including scientists with the Oklahoma Geologic Survey, have generally concluded that obtaining natural gas by injecting water into shale rock (fracking) causes seismic activity, politicians have been reluctant to make the connection. That may be changing quickly .
In Ladra, the Oklahoma Supreme Court ruled that a state court is the proper venue for a negligence claim against an oil company. That’s a huge decision considering the magnitude of fracking operations in Oklahoma and the historical lack of political will in the state to recognize any connection between fracking and earthquakes.
Perhaps it’s because of the Ladra decision or perhaps it’s because the earthquakes finally hit wealthier areas of the state, but the Oklahoma government seems to be reversing course. This past Monday the Oklahoma Corporations Commission asked well operators in Central Oklahoma to reduce the amount of waste water and gas they are injecting into the ground by 40 percent, the same waste that scientists believe is causing the increased seismic activity.This comes after a series of earthquakes rattled the wealthy and influential suburbs of Oklahoma City this past January.
So option one in protecting your house from fracking-induced earthquakes is to sue after-the-fact and get compensation. But what if you don’t want to do that or think it’s unfair? Well, the state is also pursuing legislation that would allow it to create a reinsurance program for earthquake insurance. So individuals will have to pay insurance themselves or tax payers may have to front the cost of insurance. Add that to your monthly mortgage payment.
Clearly something needs to be done to prevent earthquake damage, but should the burden be on homeowners and landowners to either sue or purchase insurance? Flood and other natural disaster insurance is protecting against events that are largely not caused by human behavior (though we are now seeing more climate-change induced disasters); that isn’t the case with insurance protecting against fracking-induced earthquakes. Such an insurance scheme is similar to allowing power companies and gas companies to construct and maintain lines haphazardly with no regulation, repeatedly watching damage occur due to the lack of regulation, and then just telling homeowners to get insurance when bad things happen. We would likely find that to be an unacceptable solution.
Since it appears Oklahoma is taking action now that wealthier neighborhoods have been hit, one could come to the conclusion that earthquakes have previously only been a problem in poorer parts of the state. The map above seems to confirm that conclusion. This raises the environmental justice argument that the state is allowing the degradation of the environment in poorer areas and placing the burden on those residents to protect themselves. It may also be safe to assume that if the earthquakes begin to strike more frequently in wealthier neighborhoods, the state will reconsider its scheme and start taking action to prevent earthquakes altogether.
Though it’s certainly progress to see the state finally addressing fracking-related earthquakes, the proposed solution leaves a lot to be desired. As oil and gas companies look for more fracking destinations, homeowners across the country could see higher costs in the form of additional insurance if other states also decide to place the burden on the homeowner. While this may be an acceptable scheme for those disasters that are infrequent and aren’t directly caused by human activity, it’s hardly acceptable for frequently occurring disasters that are clearly induced by human activity.
Cover photo courtesy of Colorado River Connected.