New Mexico has been a major producer of oil and natural gas since hydrocarbons were first discovered in the state during the early 1920s. New Mexico is the 7th largest natural gas producer and 8th in natural gas reserves in the US. But there are certain risks involved in these processes. A team of scientists with the US Geological Survey has found evidence linking the uptick in New Mexico earthquakes since 2001 to wastewater injection, a process widely used in the controversial technique of hydraulic fracturing, or fracking, and conventional drilling. However, these findings are not conclusive.
Geological risk refers to both the difficulty of extraction and the possibility that the accessible reserves in any deposit will be smaller than estimated. Oil and gas geologists work hard to minimize geological risk by testing frequently. Fracking produces millions of gallons of wastewater. The amount can inundate under-equipped treatment plants.
Scientists are worried that the chemicals used in fracturing may pose a threat either underground or when waste fluids are handled and sometimes spilled on the surface. This exposes the area and these companies to environmental risks requiring oil field insurance in nm to aid with any claims related to this vital industry.
Fracking concerns are widespread
A typical fracking case may allege bodily injury or property damage arising out of contaminated groundwater (methane or other pollutants such as fracking fluid). However, there have also been cases involving air pollution, nuisance and trespass, well blowouts, disposal of fracking fluids, and corporate malfeasances by directors and officers.
There are elements of coverage you should seek to tailor to the operations of your project. This will require partnering with a good environmental underwriter with risk management as a prerequisite for risk transfer. They should be able to offer loss control, risk mitigation, and claims management service as well as a remediation and liability policy. You will have to put in the necessary work to understand how risk transfer happens.
Many assume the industry is poorly monitored and regulated. Instead, the opposite is true. Many leading states involved in oil and gas drilling have all instituted stringent regulations to ensure that drilling is safe for the general public. Along with any state regulations, associations such as the American Petroleum Institute have created standards and guidelines that promote best practice implementation. But the concerns are real and the environmental impact could have serious consequences. Speak to your agent about your concerns and make sure you have the necessary coverage under oil field insurance in nm.