Fracking Catches the Attention of Insurers, With public attention focused on the practice, and lawsuits piling up, fracking is now a business concern too

Fracking Catches the Attention of Insurers, With public attention focused on the practice, and lawsuits piling up, fracking is now a business concern too by Lawrence Karol, May 14, 2012, Take Part
Not long ago, if you had asked someone what they thought about fracking—also known as induced hydraulic fracturing, a drilling technique used to release and extract oil and natural gas—you would probably have been met with a blank stare. But fracking stories have become ubiquitous lately, and you know something has gone mainstream when insurance companies start to worry about it. Reuters reports that with all the litigation and federal probes surrounding fracking, insurers are unclear how they should assess and price the risks associated with a practice that involves so much uncertainty. … Reuters notes that, “lawsuits and tests so far provide little help. One much-cited case involved Cabot Oil & Gas Co, which settled in late 2010 for $4.1 million with residents of the small Pennsylvania town of Dimock over methane found in their water.” Insurers are hoping to get some guidance on how to move forward when the EPA releases its initial findings later this year from a five-state investigation into the dangers of drinking water in areas where fracking has occurred. In the meantime, the lawsuits keep piling up. Citing an analysis by Fulbright & Jaworski LLP, a Houston-based firm, Bloomberg News reported that, “At least 23 cases involving fracking have been filed since August 2009 by landowners from Arkansas to New York.” And with so much money to be made by the oil and gas industry, and so much perceived risk to insurers and the public, this isn’t a debate that’s likely to be resolved any time soon.