Insurers Keep an Eye on Fracking

Alex Brandon / AP Photo

Environmentalists say hydraulic fracturing will end the world in a whoosh of lethal contaminants, while drillers say it will save the American economy and inaugurate a utopia of oil and gas. In all the blowback and bluster associated with the controversial drilling technique, oil- and gas-company insurers find themselves wondering just how to assess the risks involved. “From an insurance standpoint, it’s really hard to underwrite something with a lot of uncertainty,” said Jeffrey Hanneman, director of Aon Risk Solutions. The cost is going up for “environmental-impairment liability,” experts said, even as the Environmental Protection Agency prepares to release initial findings later this year on the hazards fracking may or may not pose to drinking water.