Oil companies can be sued by earthquake victim, Oklahoma court rules

An Oklahoma woman who was injured when an earthquake rocked her home in 2011 can sue oil companies for damages, the state's highest court ruled on Tuesday, opening the door to other potential lawsuits against the state's energy companies.

Oklahoma has experienced a dramatic spike in earthquakes in the last five years, and researchers have blamed the oil and gas industry's practice of injecting massive volumes of saltwater left over from drilling.

The state saw nearly 600 quakes of magnitude 3.0 or greater in 2014, compared to just one or two per year prior to 2009, according to the Oklahoma Geological Survey.

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Oil production in Oklahoma has doubled in the last seven years, in part because drillers can dispose of vast amounts of saltwater found in oil and gas formations relatively cheaply by injecting it back into the ground.

That practice is separate from hydraulic fracturing or fracking,which has been linked to some smaller quakes but is not believed to be causing Oklahoma's tremors.

Oklahoma, home to major energy companies including Chesapeake Energy Corp., Devon Energy Corp., and Sandridge Energy Inc., has already tightened regulations on injection wells. The state is considering tougher rules, and lawsuits would further boost costs for energy companies.

Other potential suits

Falling rocks injured Sandra Ladra's legs when a 5.0magnitude quake the most intense in the state's history toppled her chimney in 2011. She has sued two Oklahoma oil companies, New Dominion LLC and Spess Oil Company, which operate injection wells near her home in Prague, Okla.

A lower court ruled that the case had to go before the Oklahoma Corporation Commission, the regulator overseeing oil and gas, and dismissed Ladra's case in 2014.

On Tuesday, the Oklahoma Supreme Court reversed that decision, ruling that the commission's authority does not extend to the power to "afford a remedy" to those harmed by the violation of its regulations. The case will return to district court to decide whether Ladra should be granted any damages.

Ladra's lawyer, Arkansas-based Scott Poynter, told Reuters he can now move forward on several other potential suits from Oklahoma residents seeking compensation from energy companies for damages resulting from earthquakes.

Attorneys for New Dominion and Spess did not immediately respond to requests for comment.

Industry advocates on Tuesday downplayed the significance of the court's ruling, and cast doubt on whether Ladra and her attorneys could prove specific wells were responsible for the earthquake that caused her injuries.

Researchers say more work needs to be done to determine the exact mechanism of the link between underground injection and earthquakes, and whether location, volume, pressure, or other factors are the most significant.

Fracking under fire in Canada

Players in the Canadian oil and gas industry, especiallythose withfracking operations,are similarly coming under increasing scrutiny for both theconnection to an increase in earthquakes and the alleged contamination of groundwater reserves.

Increased seismic activity throughout the natural-gas rich regions has been definitively linked to natural gas development, particularly to fracking. British Columbia's oil and gas commission recently tied 231 seismic events in the province's northeast to nearby fracking projects, for example.

• Albertafracking case to be heard by Supreme Court of Canada

That being said, no damage to infrastructure caused by fracking-related quakes has ever been recorded in Canada.Generally onlyearthquakes of at least magnitude 6.0 pose a significant structural threatto buildings. While B.C. and Alberta have recorded tremorsof magnitude 4.4, no event of magnitude 6.0 or higher has ever been linked tofrackinganywhere in the world.

As fracking projects continuein Canada, however, there will likely be legal challenges from residents and environmental groups who oppose the practice.

In April, the Supreme Court of Canada ruled it would hear the case of an Alberta woman who claims frackingoperations have so badly contaminated her well that the water can be set on fire.

Jessica Ernst first took legal action against energy giant Encana in 2007 and later amended her claim to include Alberta Environment. A lower court ruled the provincial regulator was exempt from the suit, but Ernst and her legal team appealed the decision.

The Supreme Court will decide if Alberta Environmentcanbe included in Ernst'ssuit.

Ernst says that frackingon her land northeast of Calgary has resulted in contamination of her well waterand that her concerns were not properly investigated by the company and the province.

It's not clear when the top court will hear the case.