Revisiting Oil Wells

by Nelson Cole

The insurance journal is doing a three part series regarding the current state of hydraulic fracking. In this first article they describe how due to the improvements in fracking technology, companies are able to revisit previously fractured wells and reach further oil. However, the risks involved with wells that are completed using hydraulic fracturing are significantly higher and different than conventional wells.

As companies revisit these old wells it reminds us of the age and risks of these wells. Oil and gas wells do not have an infinite life span. A well can blowout at any phase of its life whether producing, shut-in, or plugged and abandoned wells. With older wells that stretch back to 1859, the casing and cementing deteriorate with time and the risk of a blowout significantly increases. Re-fracturing these wells with new technologies is similar to a kid playing with fire. Everything is fine until a blowout occurs and pollutes a whole community’s groundwater and air. We saw this happen in the Gulf of Mexico in 2010 and later Los Angeles in 2015. (Insurance Journal)

Again, the likelihood of a blowout increases with these older wells being revisited which create a problem with insurance cost. Companies look to dodge paying higher insurance cost but what is most important in this process is that companies should be pressed to ensure that the proper casing is applied to the older wells when fractured again. (Insurance Journal)

In previous post I have discussed how the people lose in terms of royalties as land is handed back and forth within companies. The people lose big when land is handed back and forth and companies are not pressed to ensure the highest quality casing is implemented as new companies reopen wells.

A well drilled in one policy period, where coverage for the well completion was paid for, may not be completed via fracking until several years later, and possibly with a different carrier. Fracking risks have evolved to the point where the idea of creating a separate insurance coverage for hydraulic fracking and separating it from drilling exposures has come up and must be applied. (Insurance Journal)


Insurance Journal


Risks that Hydraulic Fracturing Poses to Water Sources

by Alex Frumkin

There has been a rapid increase in shale gas development in the united States due to the increase in use of hydraulic fracturing to access these shale beds. The rise of hydraulic fracturing has lead to intense public debates about the potential environmental and human health effects from hydraulic fracturing. Vengosh at el. (2014) identifies four potential areas of risks for water resources from hydraulic fracturing: contamination of shallow aquifers due to stray gas contamination, contamination of surface water and shallow groundwater from spills, leaks, and/or the disposal of inadequately treated shale gas wastewater, accumulation of toxic and radioactive elements in soil near disposal or spill sides, and the over extraction of water resources that could induce water shortages. To be able to fully understand the water contamination risks associated with hydraulic fracturing there needs to be an in depth investigation of the hydrology, hydrogeology, water chemistry, and isotopic tracers for identifying what the cause of the water contamination is. Continue reading

Distance: a Critical Aspect for Impact of Hydraulic Fracturing

by Alex Frumkin

Hydraulic fracturing is the process used to access than one-half o the U.S.’ natural gas supply and is rapidly changing the energy supplies in the United States. The popularity of unconventional drilling is increasing over the past decade, and scientists are continuing to analyze the environmental impacts of hydraulic fracturing. While public concerns are encouraging scientists to continue to evaluate the possible adverse effects related to hydraulic fracturing, Ming et al. (2014) focus on understanding the current research of these environmental impacts within a spatial content. The authors set out to better understand what the environmental impacts related to how close an area or home is to an active fracking well. They find that there are five key areas that are more likely to be impacted due to proximity to a gas well. These five areas are that the closer drinking and groundwater are to a fracking site the more likely the water is to be contaminated, that residents living nearest to fracking wells will experience higher human health risks, high density gas emissions are detected, small earthquakes are more frequent and common near a fracking well, and that there are changes to the landscape characteristics. These assessments are imperative for better understanding the impacts of hydraulic fracturing on both the environment and on human’s health. Continue reading