私は地震が怖い。
For me that's like saying 私は彼がきれいです.
It doesn't make sense putting 私 here.
私は地震が怖い。lit. As for me, earthquakes are scary. → I am scared of earthquakes.
Your sentence is correct and natural.
が is used with several adjectives that indicate one's feelings, e.g. 「怖い」「欲しい」「つらい」「楽しい」「恐ろしい」「悲しい」「うれしい」「うらやましい」「憎い」「愛しい」 (i-adjectives) 「好きだ」 「嫌いだ」「いやだ」「心配だ」「面倒だ」「楽しみだ」 (na-adjectives) etc.
Examples:
「僕は自転車が欲しい。」 I want a bicycle.
「私は日本語の勉強が楽しい。」 I enjoy learning Japanese.
「山田さんはコーヒーが好きだ。」 Yamada-san likes coffee.
が is also used with the desiderative auxiliary 「~たい」. eg 「私はコーヒーが飲みたい。」 I want to drink coffee.
While it may be redundant, using 私は
certainly does make sense here and may even be necessary in some contexts to avoid ambiguity. A somewhat contrived example:
彼は幽霊{ゆうれい}屋敷{やしき}は苦手{にがて}、私は地震が怖い。
He doesn't like haunted houses, and I'm afraid of earthquakes.
Your second example is indeed somewhat nonsensical but is not equivalent to the first.
私は地震が怖い makes sense and the user "Chocolate" has given a very good explanation.
Other ways to express the fear of earthquakes could be:
地震が怖いんだよ。I'm telling you, earthquakes are scary.
地震は私の一番恐怖です。Earthquakes are my biggest fear.
地震はとても恐ろしいと思います。I think earthquakes are very scary.
地震の時パニクりた。I panicked at the time of the earthquake.