Fracking—insurance

The following Energy practice note provides comprehensive and up to date legal information covering:

  • Fracking—insurance
  • How does the fracking process work?
  • UK’s position on fracking
  • 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
  • More...

Fracking—insurance

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.

UK’s position on fracking

The UK government has, historically, been supportive of fracking. However following a number of successive seismic events at the only active fracking site operated by Cuadrilla in Lancashire, a scientific report by the Oil and Gas Authority (OGA) concluded that it was not possible to accurately predict the probability of seismic activity associated with fracking. On the back of this report the UK government changed its position and on 4 November 2019 the UK government published a  written statement stating that: 'On the basis of

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