State Farm Wants To Insure Johnson County, Texas, Against Frack-Water Induced Quakes

Categories: Biz, Science

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Like a good neighbor, State Farm wants to insure Johnson County homeowners against fracking-related earthquake damage. Cleburne, aka Lil' San Andreas, has experienced a string of quakes this summer. Which is weird because, before 2008, the area had absolutely zero history of seismic activity.

State Farm reps have reportedly been firing off mailers to residents, urging them to buy earthquake coverage. A local rep passed me onto corporate. Gary Stephenson, the spokesman for the DFW area was coy, but conceded, "Is there major research going on at State Farm? I can say we're aware of this, we're watching this issue. It's more in the news, and we are watching this with interest."

None of the quakes has been huge -- most beneath 3 on the Richter scale, according to U.S. Geological Survey data compiled by StateImpact -- but their persistence in a historically seismically silent area is curious. Research into the activity shows a strong link between tremors and waste-water injection wells. During the fracking process, many millions of gallons of water, sand, and chemicals are injected a mile or more underground. As the gas is produced, much of it surges to the surface, often accompanied by subsurface brine. The "water" is almost impossible to treat. So the best idea the industry has at the moment is to inject into deep water-bearing formations like the Ellenburger.

The seismic rub here occurs when that waste water lubricates otherwise dormant faulting, triggering minor earthquakes. Bob Hartwig, president of the Insurance Information Institute in New York, says the insurance industry is well aware of the link. Until recently, agents in the area had no reason to sell that kind of coverage. "It's true that the coverage has always been available, but few people in your area would have purchased it due to the lack of seismic activity."

Per USGS data, there have been some 32 tremors in Johnson County alone since 2008. The first "felt" earthquakes in Dallas and Tarrant counties occurred in 2008, some seven weeks after waste-water injection began at a well near the Dallas/Ft. Worth International Airport.

It's a weird side-effect of a shale play currently propping up the Texas economy. But, worry not, North Texans. State Farm is there.

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15 comments
pak152
pak152

need to stop hanging around TxSharon

 

"President Obama's Interior Department (DOI) today contradicted media reports on a government study that supposedly tied natural gas drilling and fracking to a rise in earthquakes" http://washingtonexaminer.com/article/1229541

 

"The fracking drilling technique used to tap shale oil and gas is unlikely to trigger earthquakes, but underground injection of waste water from drilling offers more risks for seismic activity, a new U.S. study said on Friday."

http://www.reuters.com/article/2012/06/15/us-usa-earthquakes-fracking-idUSBRE85E14K20120615

 

"Induced Seismicity Potential in Energy Technologies"

http://www.nap.edu/catalog.php?record_id=13355#description

 

the real cause may be disposal wells not fracking itself

"Earthquake events have been on the rise in an area that hasn’t really seen a whole lot of quakes in the past. That was before disposal wells were constructed nearby, used to dispose of wastewater from hydraulic fracturing, or “fracking.” …"

http://www.tmdailypost.com/article/environment/fracking-causing-all-these-earthquakes#comment-1289

 

'Is the Recent Increase in Felt Earthquakes in the Central US Natural or Manmade?"

http://www.doi.gov/news/doinews/Is-the-Recent-Increase-in-Felt-Earthquakes-in-the-Central-US-Natural-or-Manmade.cfm

booCornyn
booCornyn

How 'bout or if or let's say one of those "minor" or grown up "major" quakes decides to take a notion and execute a strategic "backhand" or upper cut to the jaw of that nuclear plant that's in that area...and the nuclear plant starts to slobber all over everything and falls and flips and shakes up on top of all the residents in the Cleburne/Commanche Peak neighborhoods...I wonder if the insurance companies would be very willing to "fairly" compensate the customers or would it be the same song and dance that they did with Katrina...and for that matter, would the oil companies be willing to compensate, or would it be another show like the one we had when BP messed up the gulf...just saying...

holmantx
holmantx topcommenter

Insuring a non-existent occurrence is a money-maker.  Of course State Farm will issue a policy to morons.  It's right up next to beach erosion and bomb shelters (HA!).

 

The fact that they are willing to issue "earthquake insurance" should tip off the average reporter  who does not bring with them a bias.

 

In fact, had this been any other subject you would have led off with irreverence and treated it with sarcasm.

jharris214
jharris214

Typical.  It's like with the whole global warming thing.  You may not believe global warming exists, but its guaranteed that your insurance companies and your rates do!

scottindallas
scottindallas topcommenter

 @pak152 The injection wells are part and parcel of fracking.  The water/sand slurry is at once disposed of, and used to displace gas and oil which are pushed through the wellhead. 

holmantx
holmantx topcommenter

 @booCornyn no doubt State Farm would issue you a BILLION DOLLAR nuke fallout policy to placate your nerves.

claytonauger
claytonauger

 @jharris214  Don't know if you've ever partied with Actuaries, but they're not real risk takers. Example: Insurance companies refuse to offer policies for, or cover losses from, a nuclear accident of any sorts, because they know it could bankrupt them. If these sober folks have decided that climate change is happening, then chances are it is. Likewise, if they've decided there's a market there in Johnson County for earthquake insurance where non existed before, there's probably a pretty good reason for that - man-made, nature made, or a combination of both. It's one more sign that we're having to change our lives to suit the gas companies, instead of the other way around. I don't remember pulling the lever on whether constant low-level earthquakes were an acceptable price to pay for gas extraction. I don't think the folks in Johnson County do either.

scottindallas
scottindallas topcommenter

 @pak152 It's like saying sex doesn't cause sweating and spurts of reproductive fluids

holmantx
holmantx topcommenter

 @dallasdrilling Employment and tax revenue, much less royalty income to property owners and income trickle down all through the local economy . . . is why Texas is like the Grapes of Wrath.  We are no. 1 in the country largely due to shale gas.

 

And wind and solar won't even run your air conditioner.  So cut it off in solidarity with all those who have died or been injured by earthquakes.

scottindallas
scottindallas topcommenter

 @claytonauger The threat from these quakes is nothing.  You do appreciate that a 3 magnitude quake is 1/100th the strength of a magnitude 5.  Or 1/10,000 that of a 7.    Insurance companies don't like to ensure potential losses.   They'd rather get you to pay for coverage that will never meet your deductible.

TexOHara
TexOHara

 @claytonauger I don't know you can make the claim that insuance companies aren't risk takers.  AIG was frantically selling credit default swaps on financial companies purchasing CDOs primarily made up of subprime mortgages right up until the economy walked off a cliff in 2008.

 

dallasdrilling
dallasdrilling

 @holmantx You're right. Texas is becoming the 'grapes of wrath' with false employment numbers from the gas industry, a lack of revenue to the property owners since drilling has subsided. The people who made the most money were the ones with the first check at signing. Then it stopped.The worst medical care. It's the like we are becoming one big Joad family.

scottindallas
scottindallas topcommenter

 @marye27 Time, rain and gravity do the same thing.  I don't know the effect of these minor quakes.  In fact, I'd like to compare the seismic activity of a truck driving down the street.  When a big truck drives down my street, it shakes the house. 

 

I'm not overly sanguine about fracking, but I don't know that the earthquakes are a significant factor.  State farm is extending this coverage, cause they don't anticipate paying anything out.  State Farm is among the most egregious insurers in the state.

Gangy
Gangy

 @scottindallas It's enough to mess with your foundation, doors, and windows, especially if there is a series of them.

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