Bart Binning, Ed.D.
ROTARY Article 19 – Earthquakes
Bart Binning, Ed.D.
In addition to being in the commercial real estate business, I am President of the Central Oklahoma Commercial Association of REALTORS®. On September 21, we conducted our annual Oklahoma Commercial Real Estate Forum TM; this year’s topic was Earthquakes. At the Forum, an interdisciplinary group of experts assembled to discuss how earthquakes impact Oklahoma.
There were some fascinating points discussed, and questions that may need a legislative solution. The basic questions the Form answered included:
What is causing the Increased Frequency of Earthquakes in Oklahoma?
Traditionally, there are several reasons for earth-movements or earthquakes including the general movement of the earth’s primary tectonic plates resulting from naturally occurring forces. Other reasons include exploration and production of water, oil and/or natural gas. Oklahoma has hundreds of faults, most of which are inactive.
In Oklahoma, over the past decade, about 90% of Oklahoma’s earthquakes have been in the 14 county area of north-central Oklahoma (extending from the Osage to Woodward) that encompasses the Arbuckle Formation, an under-pressure formation that is beneath all other oil-producing formations; the water-heavy Mississippi Lime generally lies on top of the Arbuckle. It is not clear why the Arbuckle Formation is under-pressure or where the wastewater (about the volume of Lake Thunderbird annually) injected into the Arbuckle Formation goes… but it is clear that at times sections of the Arbuckle become saturated. As evidence, the water level rose in monitoring wells near the 5.8 September Pawnee earthquake, and then fell back to normal levels after the earthquake. While data spotty, it appears that about ½ of the oil and gas production waste water produced in Oklahoma is injected in the Arbuckle Formation; plus significant amounts (2.4 million barrels in 2015) from surrounding states. Water has been injected into this formation for at least 60 years without problem.
It appears that the earthquakes in the Arbuckle Formation are a new type of earthquake. According to Dr. Jeremy Boak, Director of the Oklahoma Geological Survey, (who spoke at a Rotary event last year) it is fairly settled science that the majority of recent earthquakes in Oklahoma’s Arbuckle formation are manmade and caused by the over-saturation of the formation by injecting waste-water from oil and gas production activities. During these times of saturation, the ancient layers within the Arbuckle, in effect, start floating. When these sections of the Arbuckle start floating, they start moving and this movement causes earthquakes along faults; some faults were previously unknown.
Do Building Codes need to be Changed to Accommodate this Increased Frequency of Earthquakes?
A primary generic purpose of building codes is to protect life, not to prevent damage to the building. However, building codes also recognize that depending on the use of the building, there are levels of protection for structures that, based on a buildings location and soil conditions, will dictate methods of construction that will determine a building’s ability to withstand a given earthquake. At its most elementary level, for a given magnitude of earthquake, building codes are designed to construct buildings with sufficient “run time” – to provide occupants sufficient time to exit the building before it collapses. It is also recognized that if a building is designed to be occupied by a number of people (more than 300) the building will need to be made of studier materials to allow additional time to exit the building. Additionally, there will be buildings, such as hospital, police, or fire, which will need to be constructed to maintain their operation and functionality after the earthquake.
The primary destructive forces on a building during an earthquake are lateral forces at the base of the building cause by the building trying to keep up with the earth’s movement. Fundamentally, the objective is to make the building stiffer – which can be accomplished by adding bracing and anchors to elements of the structure. A monolithic foundation with elements anchored to the foundation is also recommended to prevent the structure from sliding in relation to the foundation. There are simple construction methods, which may add $1 to $2 per square foot to the cost of the building that will greatly improve a building’s survivability during an earthquake.
Dr. Christopher Ramseyer, Director of OU’s Fears Engineering Laboratory, noted that earthquakes and tornados tend to have the same lateral forces on a building – earthquake forces focus at the based and tornado forces focus at the top. Dr. Ramseyer recent helped write changes to the City of Moore’s building code that addressed EF2 tornadoes (up to 135 MPH winds, previous code would account for 90 MPH winds). It was suggested that a building code handling EF2 tornadoes would also be sufficient to handle most of the areas earthquakes. However, not all jurisdictions in earthquake prone areas have adopted these new building codes. An additional caveat is that current seismic maps do not take into account factors surrounding man-made earthquakes.
Do Insurance Policies need to be Adjusted to Accommodate the Increased Frequency of Earthquakes?
The Oklahoma Insurance Department is actively reviewing the insurance industry with regards to earthquake insurance. Because so few companies are issuing Earthquake policies, that section of the industry is being pro-actively regulated (other aspects of the insurance industry are reactively monitored.) The insurance commissioner has made rulings that should make Earthquake riders more uniform and transparent.
Standard insurance policies are designed to cover a broad and generalized risk that would relatively consistent across all localities in the country. For specialized and localized risk, riders may be purchased. In general, earthquake riders are designed to cover catastrophic events, and not the fatigue issues caused by multiple earthquakes over a short period of time. For example, it may take an earthquake with significant energy to start a crack in a wall, but subsequent earthquakes require little energy to grow the crack; how does one differentiate crack from multiple earthquakes vs. settling as a result of a pre-existing condition?
What are the things we should be concerned about in the future?
Trent England, JD, VP Vice President for Strategic Initiatives at Oklahoma Council for Public Affairs, conducted a speakers’ panel discussion where questions from the audience were answered. A summary of the session:
1. Seismic maps do not take into account factors involving manmade earthquakes, such as those found in the Arbuckle formation.
2. Will insurance companies or property owners without earthquake coverage be able to recover damages from earthquakes near the Arbuckle Formation? If so, how will this impact an industry that represents 10% of the state’s economy and 20% of its tax collections?
3. Should Oklahoma ban the importation of oil and gas production wastewater for injection in disposal wells?
4. While it appears that newly revised residential building codes designed to accommodate EF2 tornados are also sufficient to handle the most common earthquakes, not all jurisdictions have adopted these new building codes. There is some resistance from the building community because of the added cost of construction ($1 to $2 per square foot). Is there a need for a statewide mandate to impose building codes to address both tornadoes and earthquakes?
5. Because of the differing risk characteristics of catastrophic earthquakes vs. every-day damage from earthquakes, is there a need to a new class of insurance to handle non-catastrophic earthquake damage?
6. There is concern that most insurance companies do not have reserves sufficient to handle a catastrophic event, hence many companies are withdrawing from the market. Is there a reason to establish federally (or state) subsidized earthquake insurance similar to flood insurance? 
The 2017 Forum topic will be “Municipal Funding”. A full version of this document and Copies of PowerPoint Presentations used at the Forum are available at: www.swrea.org/earthquake-materials.html