Source: Insurance & Financial Advisor, December 11, 2012
Maryland’s Marcellus Shale Safe Drilling Initiative Advisory Commission recently held its first vote, and endorsed four recommendations including bonds and self-insurance if hydraulic drilling is allowed in Western Maryland.
The Cumberland Times-News reported the commission endorsed four financial safeguards when drilling for natural gas, known as “fracking”:

• Drillers should be required to have a minimum amount in performance bonds;
• Drilling companies should be allowed to self-insure if they have sufficient assets and financial stability;
• Verification of funds to address environmental cleanups not covered by comprehensive liability insurance should be instituted;
• The Maryland Department of the Environment should have flexibility to adjust required bond amounts as costs of reclamation change.

The endorsements are intended to guide legislation that could be introduced by the Maryland General Assembly, including bills that would require pollution insurance for gas companies, if drilling is permitted.
An earlier meeting of the commission included a proposal that would require liability insurance for at least $5 million per loss, for drillers.
Marcellus Shale formations have untapped natural gas resources that can be removed through hydraulic fracking, a controversial process that uses chemicals, water and sand to break apart rock and free the gas.
Gov. Martin O’Malley created the advisory commission in June 2011.