Environmental Risks: Liability, exposure and Insurance Solutions Environment vs Oil and Gas How to turn and conflict into mutual cooperation? Bucharest 24 th November 2010 Presented by: Simon Johnson, Ph.D. Practice Leader EMEA Aon Global Environmental Services Group
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Environmental Risks: Liability, exposure and Insurance Solutions€¦ · – 32 major accidents in commercial and transport activities – 24 major incidents in oil refineries auses:C
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Environmental Risks:
Liability, exposure and Insurance Solutions
Environment vs Oil and Gas
How to turn and conflict into mutual cooperation?
Bucharest 24th November 2010
Presented by:
Simon Johnson, Ph.D. Practice Leader EMEA
Aon Global Environmental Services Group
Aon Risk Solutions | Aon Environmental Group and Aon Global Risk Consulting: Proprietary & Confidential
1
Agenda
� Environmental Risks and Liability
– Current Operations
– Historical
– New technologies
� EU Environmental Liability Directive
� Exposure to uninsured loss and damage
� Environmental Insurance Solutions
� Summary
Aon Risk Solutions | Aon Environmental Group and Aon Global Risk Consulting: Proprietary & Confidential
2
Oil and Gas - operations
� Environmental incidents since 1997 in Europe:
– 32 major accidents in commercial and transport activities
– 24 major incidents in oil refineries
� Causes:
– Leaks from valves/joints/pump failure
– Overspill
– Corrosion and defects
– Bulk storage tank collapse and failure
– Pipeline burst
– Fire and explosion
Pollution and environmental damage from oil and elated products and also
fire water and foaming agents
Aon Risk Solutions | Aon Environmental Group and Aon Global Risk Consulting: Proprietary & Confidential
3
Explosion – Tank Farm – Buncefield 2005
All images courtesy of Hertfordshire Constabulary
Petrol leakage from storage tank – vapour cloud ignited.
Explosion registered 2.4 on Richter scale
and was heard 125miles away.
Fines so far total >£10M
Environmental issues remain as a result of product and
contaminated firewater entering the ground and groundwater
Aon Risk Solutions | Aon Environmental Group and Aon Global Risk Consulting: Proprietary & Confidential
4
Donges - France – 2008
Accidental leak - pipeline breakage
400 tons released
Environmental damage to river Loire
Damage to protected reed beds
Photograph Cedre
Aon Risk Solutions | Aon Environmental Group and Aon Global Risk Consulting: Proprietary & Confidential
5
Star Terminal—Suburban Washington DC
A petroleum leak from the Pickett
Road Tank Farm on a nearby site
contaminated the 1,500-home
community
Aon Risk Solutions | Aon Environmental Group and Aon Global Risk Consulting: Proprietary & Confidential
6
Puerto Rico – San Juan Harbour - 2009
An explosion of 11 fuel tanks at a fuel storage complex which shook the ground of
Bayamon, a municipality near San Juan, with the force of a 2.8 magnitude earthquake
caused the evacuation of about 1,500 residents, school closings and class actions
suits. Environmental damage.
Aon Risk Solutions | Aon Environmental Group and Aon Global Risk Consulting: Proprietary & Confidential
7
Plaine de Crau – France - 2009
� France
– Coussouls de Crau
nature reserve
– Oil pipeline failure 4M litres
– Clean-up costs exceed €25M
– Protected species damaged include:
– Crau grasshopper and ocellated lizard
– Environment also important for several
rare birds
– Treated as ELD type claim
– Currently in litigation
Aon Risk Solutions | Aon Environmental Group and Aon Global Risk Consulting: Proprietary & Confidential
8
Oil and gas - Historical Activities – Legacy Liabilities