Hydraulic Fracturing and Insurance

The Journal of Insurance & Indemnity Law- July 2017

3 Pages Posted: 18 Aug 2017

Date Written: June 10, 2017

Abstract

Hydraulic Fracturing involves pumping water a high pressure to create fractures in rock that allow oil & natural gas to flow more freely to the well bore. Fracking allows energy producers to extract oil & natural gas from places previously too expensive or too difficult to retrieve.

Environmentalists and property owners have raised concerns about groundwater contamination and other environmental problems. The Environmental Protection Agency in a 2015 draft report concluded that fracking activities have impacted drinking water through subsurface fluid migration and surface spills. This article is a guide and sets out the high points and does not cover many issues involved in hydraulic fracturing.

Water contamination claims from fracking fluid have been made in numerous states including Michigan, Ohio, New York, Texas and Pennsylvania. The majority of lawsuits are commenced by private landowners and citizen groups under various environmental statutes.

Relevant issues of insurance coverage will probably involve various forms of pollution exclusions. There is a question as to which insurance policies are potentially involved, issues of trigger and allocation.

Most cases involving hydraulic fracking lawsuits are in their early stages but certain to increase in number. The exposure to liability and accidents in both the surface and subsurface estates are numerous.

Keywords: Hydraulic Fracturing, Fracking, Environmental Law, EPA, Litigation, Insurance Coverage

Suggested Citation

Johnson, James A., Hydraulic Fracturing and Insurance (June 10, 2017). The Journal of Insurance & Indemnity Law- July 2017. Available at SSRN: https://ssrn.com/abstract=3019290

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