After the most accessible oil and gas deposits have been tapped, energy companies have turned to shale hydraulic fracturing (fracking). Denton, Texas has attempted to ban fracking. Does my Texas homeowners insurance cover fracking?

On April 26, 1865, Edward Roberts received a patent, which was the beginning of the development of fracking (or superincumbent fluid tamping). Roberts’ patent #59,936 was called the “exploding torpedo.” On March 17, 1949, Halliburton conducted experiments on fracking, which was the start of the commercial development of this practice. Modern day fracking includes the uses of explosives and horizontal drilling to increase production.

There have been concerns in many states about the possible damage caused by fracking. Does standard homeowners insurance cover the water contamination, foundation damage and reduction in home values that could be caused by fracking? Has the linkage between fracking and these damages ever been firmly established?

The Denton, Texas Drilling Awareness Group has actually attempted to ban fracking due to its concerns over environmental degradation. There were 43 Denton families that sued EagleRidge Energy for $25 million in damage, nuisance and trespass using homeowners insurance claims. The Denton Environmental Group argues that the carcinogenic benzene increases in areas where fracking occurs.

The City of Denton does receive about 2% of the profits from fracking due to its underground mineral rights. In the City of Denton, fracking is permitted within 250 feet of playgrounds and homes. Environmentalists have argued that fracking is the “only industry allowed to operate in residential areas.” The City of Denton was able to collect enough citizen signatures to ban fracking. But the State of Texas intervened and prevented Denton from banning fracking.

On April 23, 2009, the United States Geological Survey (USGS) published a report stating that “industrial operations that dispose of wastewater by injecting it into deep wells” may have increased the frequency of earthquakes in the Central and Eastern United States regions. Specifically, the August 2011 5.3 magnitude earthquake near Trinidad, Colorado might have been linked to wastewater disposal and fracking. The earthquake occurred on a natural fault line, which was stressed to the breaking point by “wastewater injection.”

Have any lawsuits been won showing that fracking caused earthquakes or structural damage to buildings? The answer is NO. But in Pennsylvania, the insurance industry has discussed the development of a special homeowners insurance endorsement for “earthquakes that are not naturally occurring.”

On March 3, 2015, the Oklahoma Insurance Commissioner mandated that homeowners insurance should not “deny coverage for man-made earthquakes.” Thus, even the insurance industry is admitting that the science is still not conclusive. Homeowners insurance policies with earthquake coverage may be able to make claims over the dangers of “wastewater injection” before they can target “fracking” per se.

Texas homeowners insurance will need to add special “earthquake coverage” for claims related to foundation damage. The reality is that future lawsuits could be won under homeowners insurance policies if an energy fracking company was found guilty of being negligent or liable for property damages.