Fracking—insurance
Fracking—insurance

The following Environment guidance note provides comprehensive and up to date legal information covering:

  • Fracking—insurance
  • How does the fracking process work?
  • Potential environmental damage caused by fracking
  • Fracking cases in the UK
  • Insurance for environmental damage caused by fracking
  • Insurance for landowners near shale gas development sites
  • Insurance for shale gas developers
  • Insurance for landowners who lease property to shale gas developers
  • How the insurance market is responding to fracking development
  • Information requirements
  • more

How does the fracking process work?

Shale gas extraction or hydraulic fracturing ('fracking') is the process whereby water and chemicals are pumped into shale rock at high pressure to release the natural gas (comprising mostly methane) that is trapped in the shale rock.

Vertical well bores are drilled thousands of feet into the earth, through sediment layers, the water table, and shale rock formations in order to reach the gas. The drilling is then angled horizontally, where a cement casing is installed and serves as a conduit for the massive volume of water, fracking fluid, chemicals and sand needed to fracture the rock and shale. The fractures allow the gas to be removed from the rock formations.

Fracking is usually undertake at a significant depth (1.7km to 3.1km), affecting a large horizontal area as the geological sequence is utilized.

Potential environmental damage caused by fracking

The UK is at a very early stage in shale gas development and only a handful of sites are being explored. In the US, the fracking industry is 10-15 years old with around 500,000 active gas wells.

There are a number of environmental issues that landowners and opponents of fracking have raised, with reference to experience in the US. These include:

  1. environmental damage from pollution

  2. environmental damage from migration of contamination

  3. safety issues

  4. water resource