Joseph Boren

Joseph Boren
Joseph L. Boren is Chairman of the Environmental product line at Ironshore Holdings (U.S.) Inc., Executive Vice President of Ironshore Insurance Services, LLC, President of U.S. Field Operations and Director of Strategic Relations. He has experience in every segment of the environmental market; a regulator, practitioner, and insurer. Joe can be reached at joe.boren@ironshore.com.

Risk Insider: Joe Boren

Calculating the Costs of Fracking

By: | January 5, 2015 • 2 min read
Joseph L. Boren is Chairman of the Environmental product line at Ironshore Holdings (U.S.) Inc., Executive Vice President of Ironshore Insurance Services, LLC, President of U.S. Field Operations and Director of Strategic Relations. He has experience in every segment of the environmental market; a regulator, practitioner, and insurer. Joe can be reached at joe.boren@ironshore.com.

In October 1973, the U.S. experienced a major energy crisis.

Initiated by an OPEC oil embargo, Americans were left scrambling to try and deal with a sudden and severe fuel shortage that seemed to go on forever.

Gas was rationed to 10 gallons per purchase, and the wait for that meager amount often stretched to hours. Stations only accepted cash. Frustration and anger provoked fights among those waiting in line.

In response, President Richard Nixon vowed that we would become energy independent as a nation; we would never again be held hostage by foreign countries for energy. Czars were named and task forces formed.

Guess what impact these efforts produced? Zero.

Sure, we built some nuclear power plants and gave out additional drilling permits. But the urgency of the issue dissipated when the gas lines eased and Americans were no longer inconvenienced.

Energy independence was dropped as a priority and the issue became a periodic campaign slogan.

Yet, even without political leadership, the American energy industry found a real path to energy independence.

Yet, even without political leadership, the American energy industry found a real path to energy independence.

The innovation is called hydraulic fracturing (fracking for short).

We had long known of extensive U.S. oil and gas reserves that, if tapped, would provide energy independence. But existing drilling technology was inadequate to remove the energy from the ground.

Fracking was the answer. In a previously unimaginable short period of time, we became the number one oil and gas producing country in the world.

Huge new reserves were tapped, long-struggling communities became boom towns, and “U.S. energy independence” transformed from fiction to inevitability.

But like most things in life, a decision to act (or not act) comes down to an assessment of risk. Who takes it? How much? Who pays if something goes wrong?

And last week, New York Gov. Andrew Cuomo announced the results of his own fracking risk assessment.

From a professional risk management perspective, the insurance industry came to a very different conclusion.

Quoting a four-year-in-the-making “independent” health and environmental study conducted by New York State, and feeling protected by his recent re-election, Gov. Cuomo banned fracking.

The reasons? Concerns about water contamination and air pollution, plus insufficient scientific evidence to affirm the safety of fracking.

From a societal perspective, the reactions were predictable.

Environmental groups and the democratic left applauded. Residents and political leaders from parts of New York State where the economy was suffering and oil and gas resources are plentiful demurred.

From a professional risk management perspective, the insurance industry came to a very different conclusion.

Based on our own analysis and real world experience, we concluded that the risks are manageable and insurable, just like the environmental risks from many other U.S. industrial companies.

While Gov. Cuomo is busy calculating the political costs, we as an industry back up our assessment by putting our capital at risk. And then we work with our energy clients to ensure that the risks associated with fracking are constantly monitored and managed.

As a New York resident and an environmental risk professional, it’s a sad day to see such disconnect between public policy and effective risk management.

Read all of Joe Boren’s Risk Insider contributions.

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Risk Insider: Joe Boren

Do You Want Dirty Water?

By: | August 14, 2014 • 2 min read
Joseph L. Boren is Chairman of the Environmental product line at Ironshore Holdings (U.S.) Inc., Executive Vice President of Ironshore Insurance Services, LLC, President of U.S. Field Operations and Director of Strategic Relations. He has experience in every segment of the environmental market; a regulator, practitioner, and insurer. Joe can be reached at joe.boren@ironshore.com.

I had dinner with a few old friends last night. While we have slightly different views on a myriad of subjects — we are those old friends who would argue over whether Willie Mays or Mickey Mantle was  New York’s best centerfielder.

We always talk baseball and we always talk politics.  My pal Sandy started to deliver his usual over-regulation-of-America speech.  I let it go for a while. Until I no longer could.

I asked Sandy if he wanted his children to be able to continue drinking clean water.  Simple question: When you turn on the tap, do you want clean water or toxic water?

Imagine you live in Toledo, Ohio, and you wake up and hear the drinking water is contaminated.  Don’t drink it.  Don’t bathe in it.   According to the New York Times a half million residents had no water.

Try living without water for one day and maybe then you will feel like a resident of Toledo, or those in West Virginia, where the spill from Freedom Chemical poisoned that water supply.

 My pal Sandy started to deliver his usual over-regulation-of-America speech.  I let it go for a while. Until I no longer could.

Think this is only happening in Toledo or West Virginia?  Think again.

Of all the Great Lakes, it so happens that Lake Erie is surrounded by the most development. The poison ends up in the drinking water supply as a result of leaky septic systems, fertilized farms and cattle feedlots.  It gets washed into the ground water, into the lake, into someone’s water supply.

Toledo is not an isolated situation.  We have many other areas affected by lakes and rivers around our great country that are exposed to the same pollutants.

This past April was the 20th anniversary of the cryptosporidium — a parasite outbreak in Milwaukee.  According to the Milwaukee Journal Sentinel, 403,000 people in the five county metropolitan area were sickened and 69 people with weakened immune systems died.

The parasite was caused by farm runoff into the water supply and through a water treatment plant that had some defects.  Milwaukee learned a major lesson, spent the necessary money on its infrastructure and has avoided a recurrence of this problem.

So when you think about over regulation, ask yourself if you want farm runoff in your water supply?  Water that is then sent to a defective water treatment plant because we haven’t spent the necessary money on our infrastructure.

Our industry will provide insurance for these facilities, water treatment plants are an example, but only if we are comfortable they are being regulated and made to correct defects. We will also insure industries as someone did for Freedom Chemicals.

However, in the future, obtaining coverage will depend on the insurance industry knowing that regulators are doing their job.

As for me, I want my children and grandchildren to turn on the tap and get a clean healthy water supply.

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Risk Insider: Joe Boren

Climate Change is Real and Hurts Our Industry

By: | June 19, 2014 • 2 min read
Joseph L. Boren is Chairman of the Environmental product line at Ironshore Holdings (U.S.) Inc., Executive Vice President of Ironshore Insurance Services, LLC, President of U.S. Field Operations and Director of Strategic Relations. He has experience in every segment of the environmental market; a regulator, practitioner, and insurer. Joe can be reached at joe.boren@ironshore.com.

While many aspects of managing environmental risks are very complicated, sometimes the direct relationship of a cause and its effect is clear.

In October of 1948, a historic air inversion over Donora, Pa., acted like an upside down fish bowl and trapped a layer of pollution from the local zinc and steel plants. Sulfuric acid, nitrogen dioxide, fluorine and other poisonous gases that usually were dispersed into the atmosphere mixed with fog to create a deadly smog. Twenty people died and 7,000 became ill, some seriously. Sixty years later, the New York Times described it as “one of the worst air pollution disasters in the nation’s history.” (Nov. 1, 2008)

 As I tell my friends, “if you want to be a climate change denier, do it quietly, alone, so others don’t know how foolish you are!” 

Dr. Devra Davis, director of the Center for Environmental Oncology of the University of Pittsburgh Cancer Institute, after a long study, concluded that the pollutants trapped by stagnant air were the primary cause of deaths (Pittsburgh Gazette, Oct. 21, 2008).

While the science behind climate change is on a much larger scale than the Donora smog, the cause and effect are still the same. When we put a lot of “bad stuff” into the environment over a period of time, we are not going to like the results.

And who puts that “bad stuff” in the environment?  Man does. We do.  Climate change is man made, man caused. As I tell my friends, “if you want to be a climate change denier, do it quietly, alone, so others don’t know how foolish you are!”

In the recently concluded National Climate Assessment, White House Science Advisor John Holdren said, “The study is the loudest and clearest alarm bell to date signaling the need to take urgent action to combat the threats to Americans from climate change.” If you need more persuading, read the report here.

Most of us probably studied something other than science in school. That is not a reason to dismiss science. Science gave us a cure for polio, put a man on the moon and an iPhone in your pocket.

I can only guess at the motivations of some politicians who think climate change is a hoax, but we are an industry that studies facts, patterns and prior results. When you study the facts about climate change, I have no doubt you will be in agreement — climate change is real. It is happening.

Changing weather patterns are having an effect on our business. Droughts, wildfires, hurricanes, etc. … I understand energy fuels our economy. I would not advocate not using oil, coal or gas, which all generate emissions. I just believe they need to be used in a cleaner way. At the same time, wind, solar and nuclear have a role to play as well.

Not dealing with the issue of climate change has and will continue to have an adverse effect on our business.

When our industry sounds an alarm, people usually listen. It is time to clang the alarm.

Read all of Joe Boren’s Risk Insider contributions.

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