Will these be our new allies: Bankers and Insurance Companies Against Fracking? It could happen.
Bankers Against Fracking
We’ve covered this topic before many times. If you need to catch up, read this NY Times article: Rush to Drill for Natural Gas Creates Conflicts With Mortgages and the accompanying documents.
Another good resource:
At the Intersection of Wall Street and Main: Impacts of Hydraulic Fracturing on Residential Property Interests, Risk Allocation, and Implications for the Secondary Mortgage Market. A few of the many interesting points:
- A lease diminishes a home’s market value.
- An apparent nexus between gas drilling operations and contaminated water diminished value.
- Structural damage to the residence represents another cause for concern.
- Questions about restoration of property effect long term value because a mortgage lender expects the residence and land to retain its value for the life of the loan.
- Compulsory integration creates issues that reduce value.
Industry is working hard to convince the public that fracking, a heavy industrial mining process, in neighborhoods does not diminish property values. They want to hide the truth but Halliburton failed to nix property loss in a recent court case.
Halliburton Can’t Get Property Diminution Experts Tossed
Law360, New York (June 9, 2015, 1:10 PM ET)
An Oklahoma federal judge on Monday ruled that Halliburton Energy Services Inc. can’t nix the testimony of two appraisers who said the company’s alleged groundwater contamination devalued affected properties by 80 percent, denying the related motion for summary judgment on property diminution claims.
Accidents are a risk to home values and to public health and safety. Recently there were blowouts in Arlington and Denton. Lightning struck a Denton neighborhood gas well causing it to blow up and burn for hours.
Even Oklahoma fracking operators admit the risk of having neighbors too close.
News video: Too close for comfort: Playground built on drill site
Logan County well site operator demanding removal.
Texas bankers and operators lag behind.
Texas bankers lag behind other states in realizing fracking is not good for their investments nor safe for neighborhood children.
Builders are building homes right next to and only feet from existing wells.
In Grand Prairie, homes are being built right on top of a (maybe) plugged gas well and abandoned frack pond.
The unsubstantiated rumor is: A resident who bought one of the DR Horton homes in Denton off Vintage Blvd. said his home was $6000 less than homes further away from the gas well. He was told there is no threat from the well because additional fracking was banned in Denton. He was not fully informed about about VOC air pollution exposures, lightning strikes, work overs and repairs or all the many additional impacts. He recently learned that the state overturned the ban.
Previous post with development platt: Mansfield, Texas home buyers should beware.
Mansfield builders are also building new homes right next to existing wells. It is reported by a resident that in some cases, there are only 56′ from pad site wall to the back of homes.
I doubt these new home buyers were told about the recent compressor blowdown and that releases leaks and emergency venting are part of normal operations for oil and gas facilities. I doubt they were told about this Firefighters respond to gas leak at well site in Mansfield. I doubt there were told that exposure is certain.
I doubt they were told that Mansfield air is not safe to breathe.
I wonder what kind of liability cities have in allowing this to happen at all, much less without assuring buyers are given full disclosure.
Insurance Companies Against Fracking
Insurance coverage for fracking is complicated. Homeowners insurance won’t likely cover it. If you signed a lease, you need business insurance to cover liability. It’s all complicated. Here is a comprehensive analysis: Homeowners and Gas Drilling Leases: Boon or Bust? By Elizabeth Radow
This article caught my attention: Fracking, Earthquakes and Insurance: A Collision Course? Operators admit in their quarterly reports that they do not have sufficient insurance coverage for all the risks. But it seems lawsuits for damage could push insurance companies over the edge.
About Sharon Wilson
Sharon Wilson is considered a leading citizen expert on the impacts of shale oil and gas extraction. She is the go-to person whether it’s top EPA officials from D.C., national and international news networks, or residents facing the shock of eminent domain and the devastating environmental effects of natural gas development in their backyards.
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Thank you for the link to Westchester Gasette about this issue that began over a year ago. It’s definitely happening right now in the Westchester community in southern Grand Prairie. Apparently, Sandlin Homes (headquartered in North Richland Hills, Texas) is very proud to build on top of Chesapeake’s Frac Pond. The “plugged” Corn Valley Well 1H (that never had production b/c we stopped a pipeline due to the Moratorium…was plugged on April 4, 2014) will be featured front and center inside the community. This proposed housing development featuring $290,000+ homes is within the shadow of this Dam and 850 feet from the Joe Pool Lake Dam’s Spillway. All of this was presented to the city’s P&Z commission for approval and to the City Council last year.
We are not aware of any state laws or city ordinances that require Sandlin Homes or the City to conduct soil remediation for this contaminated soil or any requirements from other agencies to inform buyers or mortgage companies about this damaged land before purchasing these *new* homes.
WCGasette recently posted..City of Grand Prairie, TX Should Halt Extraction at the Lynn Unit
Be careful about buying a home in Texas–they are often built on old oil or gas fields. I’ll give you an old example in Houston which has the Rolling Fork subdivision which is built on an old oil field–still shown in the RRC web site. There are a lots of cracked slabs, strange smells, etc. in that subdivision.
If you need to live in Texas, don’t spend much money on a home site that you expect to give you quality of life residential living–live in a trailer or a shack.