University of Colorado at Boulder
BMP of Oil and Gas Development

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Citation Label: OK011
Publication Name: The link between hydrofracking, wastewater injection and earthquakes: key issues for re/insurers
Publication Type: Report
Section Name:
Author Name: Swiss Reinsurance Company
Other Authors: Barrett, Sarah
Contractor Name:
Publication Year: 2016
Publication No.:
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Local Source File: OK011_Fracking_Oklahoma-8-29.indd.pdf
Annotation: In this paper, we summarize the relevant scientific background of why the hydrofracking industry boom has led to increased earthquake activity, especially in Oklahoma. We explain current understanding of how earthquakes are induced and some difficulties of establishing causality for a specific earthquake, after it has occurred. To quantify the current risk landscape, we present results from our in-house earthquake loss model after updating earthquake frequencies to a level observed in recent years. We further consider other key issues for insurers and reinsurers, such as liability precedents, the low penetration of earthquake insurance, and the potential influence of oil industry regulation. Throughout this paper, we focus on Oklahoma where the issue is most acute. However, induced earthquakes are also on the rise in Kansas, Texas, Western Canada and elsewhere. Our final suggestions as to how our industry can better respond to this emerging risk are relevant far beyond the boundaries of Oklahoma.
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