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15 May 13 09:55

Swiss Re regularly updates its expert assessments of the shifting risk landscape through an array of publications aimed at its key stakeholders, largely drawn from the insurance industry.

The latest example is a paper with the innocuous sounding title, European Legal Developments 2011/2012: Implications for P&C; Insurers. But don't be put off by the label. This publication provides a revealing overview of the exposures and emerging risks of a legal nature that could influence insurance markets in Europe. The topics covered include developments on the class action front, the liability risks arising from breaches in cyber security and possible litigation associated with the activities of the oil and drilling industry.

Under the latter heading, the authors of the publication deal with the litigation risks arising from hydrofracking which, in case you don't know, involves pumping fluids into rock formations to extract petroleum and natural gas.

The concern, the authors say, focuses on what goes into the fracturing fluid that is pumped into the earth. These chemicals can include hydrochloric acid, ethylene glycol and benzene. Opponents of this extraction method point to the possible contamination of the ground water and natural habitat as well as the danger of seismic activity.

The supporters of fracking claim these fears are exaggerated and emphasise the economic benefits to be derived from this method of extraction. They also point to the fact that the fracking industry has created tens of thousands of new jobs, desperately needed in these tough economic times.

So what do you think?


Category: Sustainable energy: Fracking

Location: Europe


2 Comments

Jonathan Bates - 24 Jun 2014, 2:11 p.m.

Am wondering if there is much of a discussion on this topic now that the UK DECC has recently issued a consultation on land access rights and the accompanying issues. I am really interested in the connection between the risk carrier perspective, public policy, and the industry position. Would be interested to get involved in this dialogue. I can see Richard's note was issued about a year ago. For us, the question is not to frack or not to frack anymore, but the challenge for the various stakeholders is to lead or not to lead ..

Norbert Besdziek - 27 Jun 2014, 12:57 p.m.

In recent years, Hydrofracking (HF) has dramatically expanded in the United States, resulting in lowered energy costs and lessened its dependence on foreign oil supplies. It is also increasingly being applied- or considered for use- in a number of other countries (e.g. China, Canada, Australia, India, Indonesia, Mexico, Argentina, Poland and England).
With steeply rising activity levels and public focus, HF has become highly controversial. There is significant scientific and political dispute concerning the actual risk presented by HF. Water pollution and induced seismic events are most prominent amongst a number of risks which have prompted various government and non-governmental organization (NGO) investigations. It has triggered various regulatory responses, including HF moratoriums in some countries, states and municipalities.
Public policy across Europe indicates a much greater hesitation towards fracking than outside of Europe. For me it looks unlikely that fracking will be operated in Europe soon.


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