While policy makers are divided over the environmental fallout of hydraulic fracturing, coined "fracking," proximity to sites could cause problems for homeowners, with uncertain protections under standard real estate insurance policies.
Fracking is a method of gas drilling where excavators drill thousands of feet into the ground to access natural gas in rock formations. Using chemicals, the deposits of gas are released and collected. Extracting the energy source from sites creates excess waste water, which is then either allowed to evaporate from lined ponds or injected back into the earth. Scientists have warned about the potential danger for this practice to cause seismic activity, like a 5.6 magnitude earthquake in Oklahoma that the United States Geographical Survey linked to injection of waste water from fracking.
While the rapidly expanding market for natural gas may lead to innovation that makes fracking less risky, a small chance of catastrophic incident remains. Particularly in California, where more than half of waste water deposits are located within 10 miles of active fault lines, time will tell what the long-term effects of extraction are on communities, according to NerdWallet. For now, homeowners who live near active fracking centers might consider seeing what their current insurance policy provides for in the event of a fracking-related disaster.
"There is a lot of variation in the law from state to state, in terms of how vigorously regulators seek to prevent damage in the first place, whether homeowners have administrative remedies and what burden of proof a homeowner must carry in court if initiating a damages action," said Lloyd Burton, a professor at the University of Colorado Denver School of Public Affairs.
One of the most visible environmental risks for fracking is earthquakes, which many communities have no experience preparing for, at home or in their insurance portfolios.