Tag Archives: earthquakes

Fracking – Pros and Cons

Hydraulic fracturing or “fracking” has caused strife across the United States.  For some it promises increased energy independence.  For others, it means environmental catastrophe.

Fracking means drilling down several thousand feet into a rock formation that holds natural gas.  This rock is then cracked.  Pathways are created for gas to flow out of the well.  Natural gas and wastewater result from this exercise.  There are however a number of wastewater disposal methods.  The water is put into a lined pond. It then evaporates.   It can also be treated or injected underground. 

Opponents to fracking argue that the environmental impacts of fracking includes the risks of infecting ground water.   Earthquakes could be triggered. Fracking causes noise pollution as well as surface pollution.  There are furthermore the hazards to public health and the environment. 

Fracking requires an enormous amount of water – as much as 5 million gallons per well. Needless to say it requires numerous toxic chemicals.   About 25 percent of fracking chemicals could cause cancer.   Evidence is mounting throughout the country that these chemicals are making their way into drinking water.

Water quality can also be threatened by methane contamination.  This problem has been highlighted by footage of people in fracked areas accidentally setting fire to methane-laced water from kitchen faucets.

People are exposed to harm from lead and arsenic. This is brought back to the surface of the land with fracking flowback fluid.  In fact, fracking waste water is so dangerous that it can’t be reused for other purposes.

Fracking can release dangerous petroleum hydrocarbons.   It can also increase ground-level ozone.  This is a key risk factor for asthma and other respiratory illness.  The pollutants in fracking water and flowback fluid can enter our air. This happens when waste water is dumped into pits and then evaporates.

Today’s fracking techniques pose new dangers.  Directional drilling is a new technique that has greatly expanded access to rock formations.  Companies also employ high fluid volumes to fill horizontal “well bores”.  These sometimes extend for miles.  Oil and gas producers are using new chemical concoctions called “slick water”.  This allows injection fluid to flow rapidly enough to generate the high pressure needed to break rock apart.

Scientists believe a recent upsurge in earthquake activity is related to fracking.  The United States Geological Survey has linked fracking wastewater injection to a 5.6 magnitude earthquake in Oklahoma, which is seismically stable. 

Earthquakes are not the only possible consequences of fracking.  350.org, an environmental advocacy group said that some people have had difficulty staying in their homes because of methane buildup related to fracking.  Not only is it difficult to get homeowner’s insurance for properties with or near a gas well, it is also difficult to get a mortgage. 

The Insurance Information Institute stated that all homeowner’s insurance policies exclude damage from environmental contamination.  Homeowners with an earthquake endorsement can get coverage for earthquake damage, even if the quake is linked to fracking.  For people who have leased their land which in effect makes it a business, insurance is more complicated.  Liabilities arising from a business are not covered by a homeowner’s policy. 

Between the years 2010 and 2013, central and eastern United States had an average of five times as many quakes per year as between 1970 and 2000. 

Standard homeowners, renters and business insurance policies do not cover damage from earthquakes.  Coverage is available either in the form of an endorsement or as a separate policy for homeowners, renters and small business owners. 

Earthquake insurance provides protection from the shaking and cracking that can destroy buildings and personal possessions.  Coverage for other kinds of damage is provided by standard home and business insurance policies.

Cars and other vehicles are covered for earthquake damage by comprehensive insurance which also provides protection against flood and hurricane damage as well as theft. 


Hydraulic Fracking

The term “hydraulic fracking” is used to describe a drilling method. Quantities of water, chemicals and sand are injected into gas-producing shale rock beds.

The natural gas is trapped inside the shale rock. Pressure produced by this technique creates small cracks in the surrounding rock. Thus the natural occurring gas is released and captured. After the capture, waste water is released.

Environmental concerns

Hydraulic fracking has gained positive and negative attention over the past few years. This drilling method is highly contentious.  This is due mainly to environmental concerns. Methane gas is released.  It is dangerous because poses possible air and water pollution risks.

The amount of water used places strain on water supplies, especially in drought-stricken areas. Potential hazards include induced earthquakes as well as operational failures and traffic congestion.

Drilling operators should have the proper insurance coverage. Most drilling companies carry commercial general liability. This is protection against third-party bodily injury as well as property damage claims. Also carried by operators is extra expense liability coverage. This insures against well failures and closures.


Homeowners exposed to risks from fracking should be aware of coverage limitations. There are also exclusions in their homeowners insurance policy. Such policies exclude settling, cracking and shrinking. Pollution exclusions are also common in homeowners policies. These policies do not cover damage incurred by seismic activity. As a result,  individuals exposed to this risk should purchase earthquake specific cover.

Complicating matters, regulations over hydraulic fracking operators differ widely among the states.

Some U.S. Insurers have started excluding fracking activities from their policies because of pricing difficulties.

The rapid expansion of hydraulic fracking operations in the U. S. brings the need for insurance solutions.

Major global reinsurers, which traditionally pick up substantial parts of insurance exposure, remain unwilling to take on hydraulic fracking. The insurers and reinsurers are reluctant to participate if they can’t understand the risk. If they can’t understand the risk, they can’t price it. If an insurer can’t measure and quantify that, the choice would be to stay out of the business altogether.