As You Sow’s Hydraulic Fracturing initiative focuses on reducing the financial, environmental, and community impacts of producing natural gas, including the use of hydraulic fracturing (or “fracking”), a controversial method of drilling for natural gas. Reduced impacts result in reduced risk to shareholders.
Disclosing the Facts 2015
The 2015 edition of our annual investor scorecard ranking the 30 largest oil and gas companies engaged in hydraulic fracturing finds improved risk disclosure by a few companies, even as 70 percent of the energy companies continue to get failing marks.
The third annual Disclosing the Facts report from As You Sow, Boston Common Asset Management, and the Investor Environmental Health Network (IEHN) gauges how well the oil and gas companies do in providing information so that investors can accurately assess how, or whether, these companies manage key risks of fracking, including use of toxic chemicals, water consumption and water quality, waste management, air emissions, methane leakage, and community impacts.
Eight oil and gas companies made substantial progress in their 2015 disclosures, spurred in part by the earlier scorecards as well as by shareholder engagements involving a wide range of investors. BHP Billiton emerged as the highest-scoring company for the second year in a row — almost doubling its 2014 score from 18 to 32 points, out of a possible 39 points. Hess (2nd), Apache (3rd), and Noble (tied for 4th) built on their leadership positions from 2014, disclosing information for about half of the scorecard indicators. Also tied for fourth, CONSOL nearly quadrupled its 2014 score, jumping from five to 19 points by securing third-party certification for compliance with the best practice standards of the Center for Sustainable Shale Development.
In addition to the top five companies, three other companies — Southwestern Energy Co. (6th), Anadarko Petroleum Corp. (tied for 7th), and QEP Resources, Inc. (tied for 7th) — made substantial gains in 2015.
Exxon Mobil, the largest of the companies scored, earned four points, placing it in the bottom third of the industry.
Find the full report and all the company scores at www.disclosingthefacts.org.
New York State Issues Historic Health-Based Fracking Ban
Fracking, a controversial process involves injecting, at high pressure, a mixture of water and chemicals into the ground to extract hard-to-reach gas and oil deposits. Fracking operations can result in harmful air emissions, water contamination from leakage and spills of toxic chemicals, adverse community effects, and even fires and explosions. As You Sow has long advocated that companies involved in fracking must disclose what practices they are using to reduce or avoid harms and provide quantitative measures of success in actually preventing or reducing impacts. Our second annual Disclosing the Facts industry scorecard, released earlier this month, found that the majority of oil and gas companies continue to receive failing scores on these measures.
“This action sends a clear message to the oil and gas industry – that human health and the environment are the number one priority,” said Danielle Fugere, President and Chief Counsel of As You Sow, and a co-author of the Disclosing the Facts report. “The frontier days are over. Oil and gas companies must now make human health and the environment their own priority or they will not be allowed to operate.”
Disclosing the Facts was authored in collaboration with Boston Common Asset Management, Green Century, and the Investor Environmental Health Network.
Disclosing the Facts 2014
Investor Report Shows Few Energy Companies Willing to Disclose Practices
Shareholder assessment grades 30 oil and gas companies; BHP Billiton in first place for fracking disclosures; Exxon and Chevron near bottom
Disclosing the Facts 2014: Transparency and Risk in Hydraulic Fracturing Operations, an update to our 2013 report analyzing companies’ reported practices and progress in managing the risks of their hydraulic fracturing operations, has been released by As You Sow, Boston Common Asset Management, Green Century Capital Management, and the Investor Environmental Health Network.
While a few of the 30 largest oil and gas companies engaged in ‘fracking’ have substantially improved their scores in our annual investor scorecard, the majority of oil and gas companies assessed continue to receive failing scores. As a result of the lack of disclosure, investors are unable to accurately assess how, or even whether, these companies are managing the material risks of fracking, including risks associated with toxic chemicals, water consumption, water quality, waste management, air emissions, and community impacts.
New in Disclosing the Facts 2014 is an analysis of how companies are managing methane leakage, a controversial issue due to methane’s significant contribution to global warming – methane has 86 times more ‘global warming potential’ than carbon dioxide over a 20-year time frame. Currently, most oil and gas companies fail to sufficiently monitor and disclose their rate of methane leakage, which feeds into investor and public concern that these emissions are poorly managed and contribute significantly to climate change.
It is encouraging to see some companies turning the corner on disclosure, but we need to see a bigger commitment. The oil and gas industry’s hydraulic fracturing operations are under intense scrutiny for potential harm to neighboring communities and the environment. It is difficult to show investors, regulators, or the public that the problems are being avoided or resolved when companies are not transparent about the operational practices they have in place.
Visit www.disclosingthefacts.org to download the full report and view all the company scores.
ExxonMobil Fracking Report Fails to Address Investor Concerns
Exxon Mobil issued a report Tuesday that acknowledges the environmental risks of hydraulic fracturing but also defends the practice as being better for the environment than other types of energy production and generation.
Under pressure from the corporate responsibility group As You Sow, as well as New York City Comptroller Scott Stringer and other shareholders, Exxon agreed earlier this year to reveal more about how it manages the risks involved with the drilling technique, known as fracking.
Danielle Fugere, president of As You Sow, said Tuesday’s report falls far short of the specific data she and others had been calling for. “Exxon continues to discuss generalized practices…but provides no concrete data on whether it is actually reducing risks and impacts at each of the plays in which it is conducting fracking,” she said.
Fugere says she wanted data specific to the regions where Exxon operates that showed such things as what sources of water Exxon was tapping to operate and how much recycled water Exxon is using in each location.
As You Sow Reaches Agreement with ExxonMobil on Fracking Disclosure
Exxon’s shift toward disclosure and transparency is important, having come after five years of shareholder resolutions seeking better management practices and disclosures about the practices and their effectiveness. Against a backdrop of moratoria, well accidents, environmental disruption, and community harms, company assurances of good practices are no longer sufficient to attract and maintain investment.
Pursuant to the withdrawal agreement, the company will address how it manages the environmental and community risks associated with its hydraulic fracturing and production practices for shale gas using criteria identified in our 2013 report called Disclosing the Facts: Transparency and Risk in Hydraulic Fracturing Operations, authored in partnership with Green Century, Boston Common Asset Management, and the Investor Environmental Health Network. In the report, ExxonMobil was ranked as one of the lowest scoring among 24 companies on transparency and risk in hydraulic fracturing operations, with adequate disclosures in just 2 out of 32 indicators.
The Exxon resolution is part of a coalition effort targeting six major oil and gas companies over failure to disclose measurable reductions in environmental and social impacts of hydraulic fracturing operations. As You Sow also filed fracking resolutions at Occidental Petroleum and Chevron. You can learn more at our 2014 resolutions table.
Disclosing the Facts 2013
In 2014, investors asked Exxon Mobil and Chevron, two of the largest players in the natural gas industry, to report to shareholders, using quantitative data, the results of company practices to reduce harm to the public and the environment from their fracking operations. The requested data would include:
- Percentage of wells reducing methane emissions using “green completions”
- Total reductions in water pollution and spills
- Sources and amount of water used for shale energy operations by region and reduction measures implemented
- Total amount of air emissions reduced annually
- Systems to track and manage naturally occurring radioactive materials
- Extent to which closed-loop systems for management of drilling residuals are used
- Number of community complaints or grievances filed and how many were resolved
As You Sow is also supporting individual and institutional investors interested in divesting from fossil fuel-based energy and re-investing in carbon-free energies. We provide resources for these investors including research on the risks of fossil fuel-based energy such as coal, documentation that carbon divestment poses minimal portfolio risk, and tools for fossil-free investment.
Hydraulic fracturing is a process of injecting a mixture of water, chemicals, and particles underground at high pressure to create fractures in the ground through which gas flows for collection.
While natural gas development is often viewed as a preferred energy option to coal or oil, and as a source of jobs and economic development to rural communities, investors, regulators and communities are growing increasingly concerned about the environmental and health impacts of this process. Harms associated with hydraulic fracturing and the production of shale gas include: above and below ground water pollution from fracking chemicals; the creation of millions of gallons of toxic waste water which has to be stored, moved, and disposed of; the potential for air pollution associated with trucks, pumps, and other machinery; depletion of drinking water stores; release of methane, a potent global warming pollutant; environmental disturbance and damage; and community impacts including strained social services, increased crime, traffic gridlock, road damage, and noise among others.
- A recent report listed 245 chemicals used in the fracturing process. Ninety-two percent of the products had negative health effects.
- Independent tests in Colorado found at least 65 of the chemicals used in fracturing fluids were defined as hazardous under six major federal laws and if these same chemicals were released from an industrial facility, reporting to the EPA would be mandatory.
- Millions of gallons of water are typically used in each fracturing process.
- The EPA, which regulates chemicals used in underground injection under the Safe Drinking Water Act, had its authority to monitor hydraulic fracturing significantly reduced by the 2005 Energy Policy Act. This legislation was shepherded through Congress by former Vice President Dick Cheney, a former CEO of Halliburton – the company which pioneered hydraulic fracturing and one of the leaders in this field.
Hydraulic fracturing is now used in about 90% of operational natural gas wells according to industry reports.
Shareholder Resolutions: As You Sow began filing shareholder resolutions and engaging with companies about their use of hydraulic fracturing in 2010, asking for disclosure of the chemicals used in hydraulic fracturing operations. Those resolutions resulted in the industry creating a site called FracFocus which provides information on toxic chemicals used in hydraulic fracturing. (The site continues to generate controversy regarding failure to disclose ‘proprietary’ chemicals.) Our current resolutions seek transparency and quantitative disclosure about how the Company manages and measures impacts associated with shale gas production across a broad range of issues, from chemicals, to toxic waste management, water use and pollution, air quality, and community impacts.
Among the risks facing companies involved in fracking operations are:
- Legal liabilities: Hydraulic fracturing may expose companies to financial risk from environmental and health impacts caused by their fracking operations, in particular those related to toxic contamination of air and water;
- Reputational risk: Companies that cause harms to communities and the environment, who oppose reasonable regulations, and that are unwilling to disclose information about their management practices and impacts can incur substantial reputational harm;
- Moratoriums: When companies fail to manage the impacts from their hydraulic fracturing operations, or to openly provide information about their practices, community opposition can lead to bans and moratoriums, increasing costs or reducing lucrative opportunities.