Leaked documents uncover Nationwide Insurance's view on how dangerous fracking really is.
Environmentalists are claiming victory against the controversial drilling practice of hydraulic fracturing, known as fracking, with help from an unexpected ally. This week, Nationwide Mutual Insurance Company became the first insurance company to publicly state it won’t cover damages caused by the potentially toxic drilling process. Nationwide cited that their policies “were not designed to cover” the risks posed by fracking and that the dangers of these drilling operations “are too great to ignore.” This is yet another blow to the industry that is already in the cross hairs of environmentalists.
Apparently, an internal memo of Nationwide Insurance wound up on the websites of New York based anti-fracking group and a landowner coalition seeking gas leases, it was this memo that detailed the company’s view. The internal document reads, “After months of research and discussion, we have determined that the exposures presented by hydraulic fracturing are too great to ignore. Risks involved with hydraulic fracturing are now prohibited for General Liability, Commercial Auto, Motor Truck Cargo, Auto Physical Damage and Public Auto (insurance) coverage.” Nancy Smeltzer, a spokesperson for Nationwide, explained that these documents were not mean to be made public, though confirmed that they are authentic, according to a report by the Associated Press.
This news comes as the latest blow to the companies that use hydraulic fracturing methods to obtain fossil fuels. Recently, Vermont became the first state to ban fracking, joining some 96 towns in New York. The controversy around fracking is mainly due to the environmental concerns since the process has been linked to air pollution, toxic waste and contaminated drinking water that can literally be ignited when coming out of a household faucet.
Experts in the insurance industry felt that Nationwide’s move was unique and did not expect many other insurance companies to follow their lead. They did admit that some companies have been hesitant to write environmental coverage for companies engaged in fracking.
One thing is clear, fracking is a dirty business and by design pollutes and destroys the ground beneath our feet. However, the fracking process does create an abundance of natural gas and other fossil fuels, driving home energy costs down for many Americans. The question is, “is it really worth it?” As we noted in our previous article, I am sure many of us would opt to pay a few extra bucks each month if it meant keeping our air clean and our children safe from toxins. All we can say for certain is that Nationwide is on our side.