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Shale Gas Fracking Dangers – Insurance companies refuse to give Coverage

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While Shale Gas extraction continues unabated in the USA leading to a massive oversupply and a price crash in natural gas, the environmental dangers continue to be overlooked. Note a number of investigations have been launched by EPA and others into the potential dangers of Shale Gas. The process of Hydraulic Fracking which involves pushing millions of tons of water mixed with chemicals under high pressure to fracture shale seems unsafe from a common sense point of view. The dangers which are apparent are:

a)      Poisoning of Water Bodies as the contaminated water used in Shale Gas mixed with the water used by residential communities.

b)      Earthquakes are also a potential problem as underground shale formations are disturbed without assessing the geological impact.

c)      Leakages of Shale Gas is also a danger for the nearby residents.

It is natural therefore for the insurance companies to refuse coverage, given the potential dangers which could lead to a massive liability in the future. The governments around the world need to take cognizance of the potential dangers of shale gas fracking as countries like India, Poland and China are aggressively looking to exploit shale gas resources inspired by the US success.

You can read more about the Pros & Cons of Natural Gas.

Is Shale Gas Environmentally Safe?

There have been concerns raised about the environmental degradation resulting from Shale Gas Production. Recent incidents of water and soil contamination from Pennsylvania has led to voices being raised in protest. Note all Fossil Fuel extraction leads to some extend of Environmental Pollution both during extraction and during usage. Shale Gas in no exception. However some unique types of Pollution being reported by Farmers has led to more focus on this still nascent technology.

Pennsylvania has quarantined cattle which have fallen sick after drinking toxic waste water. Shale Gas Extraction requires injecting Water mixed with Chemicals at High Pressure to fracture Shale Rock formations. This results in contamination of water with chemicals that can lead to human and animal sickness. The problem arises from “Fracking” that involves mixing of water and toxic chemicals. Reports from US indicate that tap and toilet water in houses near these gas wells have been severely contaminated. Their have also been reports about Gas Leakages.

Federal Regulators have tentatively started investigating  Shale Gas Technology. But the Oil Industry in typical fashion is opposing the scope of the study. Reminds me of Saudi Arabia blocking the study of climate change on rising seal levels. The Oil and Gas companies currently do not even have to reveal the chemicals they are using during the Fracking process. Lets hope that these Regulators do their jobs otherwise it could lead to another BP Oil Spill type of disaster in the future. The laxness of the Oil Drilling Regulator was a major factor in one of the world’s biggest environmental disasters.

Earthquakes the New Danger

The digging of new injection wells which is used to dispose off water has been linked to earthquakes in Ohio. Note the biggest disadvantage of hydro power is that it can cause massive earthquakes, due to movement of  large earth works. Shale Gas does the same in a  smaller way. The Technology is quite new and all the side effects are not known. Minor earthquakes near shale gas digging has been reported before as well.


 Nationwide Mutual Insurance Co. has become the first major insurance company to say it won’t cover damage related to a gas drilling process that blasts chemical-laden water deep into the ground.

The Columbus, Ohio-based company’s personal and commercial policies “were not designed to cover” risk from the drilling process, called hydraulic fracturing, or fracking, Nationwide spokeswoman Nancy Smeltzer said on Thursday.

 After months of research and discussion, we have determined that the exposures presented by hydraulic fracturing are too great to ignore. Risks involved with hydraulic fracturing are now prohibited for General Liability, Commercial Auto, Motor Truck Cargo, Auto Physical Damage and Public Auto (insurance) coverage.”

It said “prohibited risks” apply to landowners who lease land for shale gas drilling and contractors involved in fracking operations, including those who haul water to and from drill sites; pipe and lumber haulers; and operators of bulldozers, dump trucks and other vehicles used in drill site preparation.

What do you think can be done in this regard to save the Environment? Feel free to have your say & let us know.


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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