Nationwide Mutual Insurance Co. will not cover damages incurred from the hydraulic fracturing (fracking) process.
According to an AP report this week, Nationwide is the first major insurance company to recognize the risks associated with fracking drilling and, through leaked internal emails, has said it would not cover damages caused by drilling. This applies to landowners with any number of Nationwide policies who decide to lease their property to drilling companies, or independent contractors who work in conjunction with drillers.
Emails obtained by anti-fracking advocates posted the details of these internal emails on several Web sites frequented by fracking activists. The messages acknowledge that the risks associated with fracking drilling are “too great to ignore” and that the company’s insurance policies “were not designed to cover” the damages that could result from it.
Nationwide’s emails indicate the company was conducting a months-long investigation into the potential hazards with fracking drilling and despite the insistence of the fracking and drilling industries that the process is safe when done properly, the company still sees too much risk and will not cover damages likely to be caused by it.
This means property owners who lease a portion of their land to drilling companies to open fracking wellls are taking their own risks if they own a Nationwide policy. The company did not deny the existence of the leaked messages even if they weren’t meant to go public. It said this company line of thinking applies to its General Liability, Commercial Auto, Motor Truck Cargo, Auto Physical Damage and Public Auto (insurance) policies.
Additionally, the company is not willing to cover damages incurred by contractors employed to work in fracking well construction. This could include vehicles used to “haul water to and from drill sites, pipe and lumber haulers, and operators of bulldozers, dump trucks, and other vehicles,” AP details.
Fracking drilling for natural gas deposits trapped in underground shale deposits has boomed in the last decade, mostly in the last five years. There is very little evidence that shows fracking can be conducted safely and Nationwide is clearing hedging with the growing amount of research that points to the myriad dangers fracking poses.
The drilling process has been blamed for air and water contamination and natural gas companies have already paid millions to affected property owners in Pennsylvania and elsewhere who blamed nearby fracking activity for contamination of their water wells.
Fracking uses hundreds of thousands of gallons of fresh water, sand, and a mix of hundreds of chemicals which are ushered through an underground well two miles below the surface until it reaches a shale bed. The rock is blasted apart and natural gas is released and rushed back to the surface. As much speculation exists for the safety of fracking drilling as there is for the overall safety of the drilling process. Well blowouts can result in serious injuries or death and many wells are constructed haphazardly or by poorly-trained construction workers, compounding the dangers of the process.