Nationwide

Earlier this summer Freddy Fredrickson and I traveled through Pennsylvania. We drove through Tioga County (where there are currently 1,076 fracked gas wells), through Bradford County (1,749 wells) to Susquehanna County (592 wells). Outside of Mansfield, Pa we stopped and took a look at our first fracking site. It looked like many of the photos I had seen, drilling rigs, tanker trucks, condensate tanks, all on a large leveled area where there once was a rolling meadow, directly across a small road from an occupied farmhouse. Across the valley from this installation was a long mountainous ridge and spanning the horizon were at least 30 windmills. This poignant image of fracking in the foreground and windmills in the background seemed to encapsulate our choices in the 21^st century – but that is for another column. We proceeded east along Rt. 6, experiencing even on a weekend, a large volume of truck traffic that made for slow going. Additionally traffic was often at a standstill because practically every bridge we came to was under repair. Many license plates were from Texas, Alaska, Oklahoma, Louisiana, Virginia, Arkansas, and Tennessee.

We arrived in the Montrose area of Susquehanna County and met our host Vera Scroggins who gave us a tour of the area’s fracking sites, and compressor stations, and introduced us to families who have had their water poisoned by nearby fracking operations. We saw the ubiquitous “water buffalos”; these are large plastic tanks stationed outside affected houses. They hold the water that is delivered regularly, and the large chimney like extensions on water wells are there to siphon off methane so it doesn’t accumulate and explode. We met the Manning family, a young couple with small children, who had saved to buy their first home and 15 months after moving into it, had their water turn grey and their well cap start hissing. Testing revealed high concentrations of methane as well as Barium, Iron, and Strontium. There are fracking sites nearby the Manning home, both cited for defective well casings. The Mannings don’t drink the water from the water buffalos and there is a constant stream of bottled water deliveries to their front porch, dropped off by friends and neighbors and visitors like ourselves. People with “water buffalos” have the added monthly expense of $150 in the winter to prevent the tanks from freezing.

We then traveled to Dimock, Pa and saw a fracking site that has been plugged and abandoned. The well casings had failed and polluted wells in homes downhill from the site. We drove through a community downhill from the closed well where there was water buffalo after water buffalo after water buffalo – about 30 to my count. The people we spoke with were traumatized, worried, angry and frustrated. Many are involved in ongoing lawsuits and seem lost in a legal maze of denied responsibility and official abbreviations…. DEP, EPA, PEMA. One tragic aspect evident were the tensions between people harmed by fracking and people benefitting financially from it. Vera described it as “ a civil war between the pros and cons” and added dryly, “ It hasn’t enhanced community relations”. When people heard we were from New York State they gave us the same advice over and over, “ don’t let them over the border, you have no idea what you are in for.”

 Recently, as reported by the Associated Press, National Casualty Company, part of the Nationwide Mutual Insurance Company, said it wouldn’t cover damage related to hydraulic fracturing — or fracking — for natural gas and oil.
Nationwide spokeswoman Nancy Smeltzer said that the company’s personal and commercial insurance policies “were not designed to cover any kind of fracking risk.”

Columbus, Ohio-based Nationwide says risks involved in fracking operations “are too great to ignore” and apply to policies of commercial contractors and landowners who lease property to gas companies, General Liability, Commercial Auto, Motor Truck Cargo, Auto Physical Damage and Public Auto (insurance) coverage. The company said any policies currently written with the exposure would be non-renewed
(following state requirements).

Among the prohibited risks involved in fracking operations listed by the company are contractors involved in fracking operations, landowners whose land has been leased to lessees with fracking operations, frack sand and frack liquid haulers and site prep (dump trucks, bulldozers) or leasing of tanks.

Nationwide issued the following statement “Gas and oil drilling has been going on in this country for many years in the west and southwest. Fracking is another variation of the gas and oil business.

Fracking-related losses have never been a covered loss under personal or commercial lines policies. Nationwide's personal and commercial lines insurance policies were not designed to provide coverage for any fracking-related risks.

From an underwriting standpoint, we do not have a comfort level with the unique risks associated with the fracking process to provide coverage at a reasonable price.

We encourage consumers to be knowledgeable about any risks to their property and assets. For advice, seek the help of financial and legal specialists who can discuss the unique nature of the risks associated with oil and gas exploration. We also advise consumers to talk to their insurance agent to understand what coverage is provided in their personal or commercial lines policies.”

What struck me when reading the statements about Nationwide’s policy was the abstract and couched language, the calculations of risk versus profitability that an insurance underwriter makes. I thought of what we saw in Pennsylvania. The people we met there were the real faces of risk, caught in the gap between theory and practice, between propaganda and marketing and the daily effects on their families and property values. It is clear to me, and apparently also to Nationwide, that high volume, slickwater, horizontal hydrofracking will always demand a sacrifice. That sacrifice might be the loss of someone’s water well, or liberty through compulsory integration, or peace of mind as the countryside is transformed into an industrial zone, or perhaps it will be an entire town’s aquifer system.