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Just the Fracts Discussion

Swipe Right: Seeking Fracturing Policy Alternatives

Surety bonding, insurance, or some combination of the two would promote best practices by making risky behavior prohibitively expensive. Shifting risk to a fiducially-responsible third-party creates a strong incentive to mandate good behavior. The insurance company would set common standards at a point where their expected policy payout would not exceed their expected premiums (or in the case of surety bonding, they would set the interest rate at a level where payout would not exceed interest payments). Since the cost of cleaning up contaminated water or the wreckage of an earthquake could be expensive, these insurance or surety bonding companies would either set their premiums or interest rates at levels high enough to cover the risks or to impose strict operating standards to make coverage affordable and manageable. The insurance or surety bonding company would then assume the regulatory role. Think about your daily life and how surety bonding and insurance either do or could play a role in changing your behavior by making you financially responsible for you actions.


Bonding of some sort is more likely to be accepted and exercised. It exists in enough areas that it is familiar and proven.

An additional ability to self insure can help for those who can afford it.

Nothing threatens a company more than a known court outcome.