The toxic water that gushes out of oil wells in the Permian Basin of Texas and New Mexico has spurred environmental concerns and even earthquakes. Now the problem has become so acute that it’s turning producers against one another.

In an ongoing case in Texas’ Loving County (population: 48), a New Mexico oil driller says Devon Energy Corp. and another company wrecked its reserves by flooding them with wastewater.

Closely held Stateline Operating LLC says Devon and water disposal specialist Aris Water Solutions Inc. pumped so much fluid underground in the Permian Basin that it leaked into a prolific oil-producing layer of rock, making it all but impossible to extract crude, according to an April court filing.

The New Mexico producer says the injections caused “permanent damage to Stateline’s wells and production, and irrevocably lost oil and gas in place,” according to the filing. The company is seeking $180 million in damages.

bloomberg.com - Toxic water leaks from top US oil field ensnare devon dvn in texas court fight

Part of the attraction of OXY is its large acreage in Permian and other basins with large O&G reserves. If they become liable for damage caused by wastewater disposal or have to spend much more money on safe disposal, then they might be worth less. Could this be a replay of the problem with wildfire liabilities of utilities?