Major earthquake could cause $75B in damage, study by Insurance Bureau of Canada warns; major quake would bring insurance industry to its knees

Major earthquake could cause $75B in damage, study by Insurance Bureau of Canada warns by CBC News, October 29, 2013
Canada is unprepared for a major earthquake that would cause between $60 billion and $75 billion in damage, a new study warns. The report, commissioned by the Insurance Bureau of Canada, says a major earthquake would have a significant economic impact on the region it hits, as well as a domino effect on the entire Canadian economy. Nearly 4,000 earthquakes hit Canada each year, but the vast majority are too small for humans to notice. However, there are seismically active regions both off the West Coast and in Quebec that could produce damaging earthquakes within the next 50 years. There is a 30 per cent chance of a major earthquake hitting B.C. in that time period, and a five to 15 per cent chance of a damaging quake hitting Quebec.

It’s the first study of its kind in 20 years, and highlights how unprepared Canada is for a major seismic event. The study looked at two scenarios – a major earthquake off the West Coast of British Columbia, and one in Quebec east of Quebec City. The report does not look at loss of life or casualties, focusing solely on the impact to the economy, but says it considers an earthquake “sufficiently threatening and devastating to warrant prudent planning and preparation now.” According to the report, a 9.0 magnitude earthquake off the western coast of Vancouver Island would have a major impact on the economy. It estimates that scenario would cause $62 billion in direct damage in the region, primarily due to building damage, and $12.7 billion in indirect impact caused by things like supply chain interruption and infrastructure damage. Although most Canadians would consider a western earthquake most likely, there is a seismically active area in Quebec that could produce a lower-magnitude quake that would be less devastating but still potentially damaging. The report’s eastern quake scenario models what would happen if a 7.1 magnitude earthquake hit to the east of Quebec City, in the Charlevoix seismic zone. That earthquake could cause $61 billion in damage, $49 billion of which would be direct impact. [Emphasis added]

Major quake in Canada would bring insurance industry to its knees: study by Canadian Press, October 29, 2013, Calgary Herald

The Insurance Bureau of Canada says tens of billions of dollars in damage could result in British Columbia or Quebec if they were ever hit by a major earthquake. … The bureau said damages such as those incurred in the scenarios would exceed the insurance industry’s capacity to respond. The study by catastrophe analysts AIR Worldwide predicted potential economic losses of $75 billion in the B.C. seismic zone, and $61 billion in the Quebec one. By way of comparison, that figure for Quebec is nearly the total cost of the province’s annual budget and the figure for B.C. is far higher than its total annual budget.

“Events of this magnitude have a domino effect on the Canadian economy triggered by property damage, supply chain interruption, loss of services, infrastructure failure and business interruption,” said Don Forgeron, the insurance bureau’s president. “Insurers, governments and all Canadians have a responsibility to prepare. If a mega-earthquake should strike in a densely populated area, insurance alone will not pay for all the damage. Governments and consumers have a role to play.” … The study, which was completed for the insurance bureau in July but released Tuesday, acknowledges that such earthquakes are considered a 1-in-500-year event. It notes that the evaluation is not a prediction of future events. The report said that earthquakes in Japan, Chile, New Zealand, and Turkey during the last few years highlighted the need for insurance industry preparedness. … There have been at least 24 significant earthquakes in Canada in the last 300 years which have had a magnitude of 5.0 or greater. These were concentrated off the west coast of B.C. and in southeastern Canada, mainly in southern Quebec and southeastern Ontario.

Major earthquake could devastate Canadian insurers, bureau warns by Jacqueline Nelson and Jill Mahoney, October 29, 2013, The Globe and Mail

[Refer also to:

WATCH: Cochrane resident Howard Hawkwood worries CAPP’s new fracking guidelines too weak, Alberta rancher says he’s felt many tremors on his property

Spain Suffers from Hundreds of Earthquakes Caused by Offshore Drilling; Largest Quake is Magnitude 4.2; Citizens Complain of Cracks and Tremors Whipping Their Home

Arkansas homeowners settle fracking lawsuit, Frackers Sued for Causing Earthquakes, Five federal lawsuits mark the first attempt to link drilling and quakes

Fracking linked to earthquakes, study finds, raises new concern about earthquakes and fracking fluids

Earthquakes from onshore gas drilling threaten a disaster, warn residents of Dutch city, Residents of Groningen are up in arms over onshore gas drilling that triggered earthquakes, damaging homes and sending property prices crashing

Groningen gas fields – the Dutch earthquake zone

Investigation of Observed Seismicity in the Horn River Basin
Horn River Basin seismicity events, from 2009 to late 2011, were caused by fluid injection during hydraulic fracturing. All events occurred during or between hydraulic fracturing stage operations. [Emphasis added]

Drilling method can be extended throughout UK, say experts, even though it has caused two earthquakes

Fracking process causing earthquakes noticeable kilometres away

Seismicity in the Oil Field 

CLIENT ADVISORY New Technology Creates New Insurance Issues for Oil and Gas Lease Operators by Pascal Ray and the AmWINS Energy Specialty Practice
This shift to unconventional drilling and heavy multi-stage fracking has created new insurance issues for the industry:
• Increase in blowouts during the completion/fracking stage.
• Increase in blowouts involving communication between multiple wells.
• Increase in blowouts caused by casing/cementing failure.
• Increase in blowouts caused by surface events.

In addition to these blowout trends, we are seeing:
• An increase in blowouts involving producing wells.
• An increase in blowouts involving plugged and abandoned wells.

Nationwide Insurance: Fracking Damage Won’t Be Covered July 12, 2012 ]

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