There is no doubt that the global economy runs on energy. New discoveries and recovery techniques have significantly changed the energy market in the US and internationally but have also created new environmental risks. Increasing environmental awareness has stretched across all segments of the energy business.
For example, heated debate about the movement of oil and gas in the US has arisen around the Keystone pipeline. But while concerns are raised about the increasing “midstream” infrastructure being built, the risks of moving these products above ground (either through rail or truck) is highlighted by recent disasters. Sound financial risk management tools are called for in either case.
In addition, the petrochemical and marketing segments of the business continue to pose environmental risks for both short- and long-term exposures. Finally, the recent downturn in spot-market oil pricing has resulted in a significant slow-down in energy production, service, and drilling businesses. This downturn could result in significant consolidation of smaller exploration and production companies and service providers over the next few years. In sucha a scenario, the appropriate allocation of risk and/or financial risk transfer through insurance will become increasingly important.
Whether it is helping our energy clients evaluate and quantify their risks, placing effective insurance programs, or transferring risks in a complex merger and acquisition, the Marsh Environmental Practice experts have the expertise and experience our energy clients need.