Hydraulic fracturing (fracking) combined with horizontal drilling has unleashed a huge oil and gas boom in the United States and redrawn the world energy map. But could this new technology result in widespread bodily injury and property damage?

Executive Summary

It's difficult to cut through the polarized debate on fracking risks. So to help P/C insurers and reinsurers manage future liability risks, Praedicat's R.J. Briggs offers an update on scientific research, which substantiates some concerns more than others while also revealing subtleties and opportunities for underwriting.

With an estimated 15.3 million Americans living within one mile of new natural gas wells, and millions more living near unconventional oil wells, will fracking result in a massive set of correlated insurance claims?

The answer should not depend on whom you ask, but it’s difficult to cut through the polarized debate. If you could imagine a “representative” scientist who pulled all the research together, what would he or she say about fracking? Is fracking actually poisoning our air? Will it leave a legacy of groundwater contamination? Is fracking responsible for earthquakes?

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