[Refer also to:
Richard Payne still remembers what it felt like when a gas explosion lifted his house off its foundation five years. …
Many of the Payne’s neighbors also suffered a valuable loss: water. “You could actually see the gas bubbling up in the water,” explains Frances McGee, whose water well, along with dozens of her neighbors, was contaminated when gas leaked into the water aquifer. “Many of them we found 100 percent explosive limits that the gas was actually in their wells,” says Assistant Fire Chief Wayne Burge. Ohio Valley Energy paid for drinking water to be supplied to affected familes and 1,500-gallon water tanks were put in garages. It took two years before residents around the gas explosion site were connected to city water. “All the people wanted was to be made whole by having water,” says Frances. “Without water, you really don’t have a home.” [Emphasis added]
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.
While fracking has been the cause of some of the blowout increases, producing wells and plugged and abandoned wells are experiencing underground blowouts from the failure of old and corroded casings. These underground blowouts can lead to cratering events that are costly and difficult to bring under control.
Underground blowouts can be much more expensive to bring under control than surface blowouts, yet many operators do not insure these wells or have high enough limits for them. Another issue that has arisen from fracking is an increase in surface and water table pollution events that can result in expensive claims and erode the Control of Well limit rapidly, if not entirely. As a result, many of the blowouts that are now occurring are under-insured. [Emphasis added]
Forty-three households were involved in the class-action suit…. A separate amount was given to Mr. and Mrs. Payne, whose house on English Drive was lifted off its foundation by the explosion. Ohio Valley Energy and other companies involved with the drilling also paid off Nationwide Insurance, which had the coverage on the Paynes’ home. [Emphasis added]