Question: I have heard that extreme storm events can be caused simply by a butterfly flapping its wings somewhere in a distant location. Is it true that such a small disturbance in the air in one location can result in such a large catastrophic event in another separate location? If so how can we know this is possible, and how is this even possible?

Answer: 
The causes of a single particular extreme weather event, like a tornado, may never be fully understood, especially if it is a chaotic system. The causes or contributing factors to the number of tornados expected for a particular atmospheric condition is much more fully understood and is certainly not chaotic. In that sense, butterflies do not cause tornados.
It's just a demonstration of cause-and-effect.

Over time(years and years) even the smallest motions compound, and the eddies from butterfies wings will be the difference between a tornado and a clear day.