American Insurance Industry Adjusts to Earthquake Risk Caused by Fracking

Insurance Industry Adjusts to Earthquake Risk Caused by Fracking by Noel Brinkerhoff, Danny Biederman and, Steve Straehley, January 27, 2015,
In another sign that fracking is increasingly being acknowledged as a cause of earthquakes, the insurance industry has announced that it is now linking the controversial drilling procedure with seismic activity in establishing its rates.

Before insurance companies set their rates for an upcoming year, they turn to the U.S. Geological Survey (USGS) for information on quake activity. Specifically, insurers look at the USGS’s National Seismic Hazard Map, which “predicts where future earthquakes will occur, how often they will occur and how strongly they will shake the ground,” according to the Dallas Morning News.

But this map will now take into account earthquakes that occur within the vicinity of fracking wells, the USGS has decided. That means insurance rates may go up in some areas considered more at risk of seismic events because of fracking operations.

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. Human activity, including fracking, has been cited by scientists as the cause, according to Dallas Morning News.

Last year, USGS connected a 5.7-magnitude quake in Oklahoma to that state’s robust fracking industry. “The observation that a human-induced earthquake can trigger a cascade of earthquakes, including a larger one, has important implications for reducing the seismic risk from wastewater injection,” USGS seismologist and coauthor of the study Elizabeth Cochran said at the time.

More than 120 quakes have hit the Dallas area in the past six years, and scientists have cited the work performed at nearby fracking sites as the reason, according to Homeland Security News Wire. Even the Texas Oil & Gas Association agreed that some research into the nexus of fracking and quakes is called for. “The oil and natural gas industry agrees that recent seismic activity warrants robust investigation to determine the precise location, impact and cause or causes of seismic events,” Todd Staples, the association’s president, said in a statement.

A study published in the Bulletin of the Seismological Society of America says fracking near Ohio’s Poland Township triggered a previously undiscovered fault. The result was more than 70 earthquakes ranging in magnitude of 2.1 to 3.0, the latter of which was described as “rare” by the experts. [Emphasis added]

[Refer also to:

UK National Farmers Union Mutual Insurance New Frac Exclusion: “WE will not pay for liability arising out of any activity involving prospecting, extraction or refining of liquid or gaseous fuel. An example of such an activity is ‘fracking’” ]

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