Oklahoma town sues energy companies over earthquakes

The town of Pawnee, Okla., is bringing a class action lawsuit against oil and gas companies, saying the companies caused more than 50 earthquakes by injecting wastewater into the ground.

Following a record-strength earthquake in September, residents of Pawnee, Okla., hope legal action will compensate them for injuries and property damage.

Weitz & Luxenberg, a New York-based consumer protection firm, is bringing a class action lawsuit on behalf of affected residents. The firm announced on Friday that it will sue more than a dozen energy companies in district court. The plaintiffs plan to argue that the companies’ practice of injecting wastewater from fracking caused the September quake – and more than 50 smaller tremors.

It’s a complex issue for the court, which must balance a growing scientific consensus against energy companies’ criticisms of the science, in a state where oil and gas companies dominate the economy. It has historically been hard to get courts, wary of setting problematic precedents, to rule on these issues. However, the lawsuit may shine a light on the problems, encouraging further regulation and alternative disposal methods.

“Dangerous tremors have become a constant threat to the residents of Pawnee, but the energy companies behind them don’t seem to care,” said Robin Greenwald, head of Weitz & Luxenberg’s Environmental and Consumer Protection Unit, in a statement. “With this lawsuit we hope to hold them accountable for their actions.”

A number of industrial processes dispose of contaminated water by injecting it deep underground, to avoid polluting drinking water, which tends to be found closer to the surface. Fracking – oil and gas extraction via hydraulic fracturing – is the leading source of such wastewater, according to the US Geological Survey.

There is a growing scientific consensus, hotly disputed by energy companies, that wastewater injection causes earthquakes. According to scientists, when water is injected deep underground, it increases the pressure level in the surrounding rocks. The more water injected, the higher the pressure becomes. And when rocks near existing fault lines become highly pressurized, the pressure can be relieved by shifting along those fault lines: that is, by earthquakes.

Oklahoma officials have long insisted that the link between quakes and disposal wells was not clear. In April 2015, however, they reversed that position, paving the way for a Supreme Court verdict that allows homeowners to sue oil and gas companies for earthquake damages in state trial courts. 

That move made Friday’s decision to bring a collective action lawsuit possible. The plaintiffs can nevertheless expect progress to be slow.

Cases take a long time to come to trial. Many are dismissed or settled out of court. And the court is often asked to seal the records of these cases, making it hard to predict how future cases will be resolved.

The energy industry vigorously opposes the lawsuits and has cast doubt on courts’ efforts to establish liability in the past. 

It’s impossible to link specific energy companies to given seismic events, argued Catrina Rorke, director of energy policy at the R Street Institute, a free-market think tank in Washington, DC, in the Wall Street Journal last year. Many companies' wells are close together, and seismic effects can be felt miles away.

Given the prominence of oil and gas companies in these states’ economies, courts may be concerned about setting problematic precedents through the cases they decide. In previous cases, this has led to very narrow judgments, like in a Texas Supreme Court ruling that dodged the question of whether wastewater injection could constitute trespassing.

“Without the ability to dispose of wastewater, we cannot produce oil and gas in the state of Oklahoma, and this is our lifeblood,” Kim Hatfield, president of Oklahoma City-based Crawley Petroleum and a member of the governor’s task force studying the earthquake problem, told the Associated Press in January.

The class action suit may encourage a search for solutions that benefit both the energy companies and Oklahoma residents.

Oklahoma regulated wastewater injection last year, cutting the number of earthquakes in the first eight months of the year by more than 100 compared to the same period in 2015. And Kansas’s success with similar regulation may provide a roadmap for further state action.

The expense of trying and settling court cases may push companies to find alternative ways of disposing of wastewater. In Oklahoma, the US Geological Survey reports that wastewater is composed of 90 percent saltwater and just 10 percent contaminants, meaning solutions like water purification and desalination may become viable as technology improves.

“Managing and mitigating practices that contribute to damaging earthquakes can be part of successful, continuing investment in oil and gas development, but not if the judgment is left to the courts,” Ms. Rorke wrote.