Whiting Petroleum Corp.: Request for Report on Hydraulic Fracturing Policies
WHEREAS: Extracting oil and gas from shale formations using hydraulic fracturing and horizontal drilling technology has become a controversial public issue. Leaks, spills, explosions, and community impacts have led to bans and moratoria in New York State and elsewhere in the U.S., putting the industry’s social license to operate at risk. In particular, multiple efforts to ban hydraulic fracturing have occurred in states where Whiting operates, including North Dakota and Colorado.
Disclosure of management practices and their impacts is the primary means by which investors can assess how companies are managing the risks of their operations. The Department of Energy’s Shale Gas Production Subcommittee recommended that companies “adopt a more visible commitment to using quantitative measures as a means of achieving best practice and demonstrating to the public that there is continuous improvement in reducing the environmental impact of shale gas production.”
Whiting has been a laggard in the oil and gas industry in its disclosure practices. In a 2016 report “Disclosing the Facts: Transparency and Risk in Hydraulic Fracturing Operations”, which scores companies on their disclosure of quantitative information to investors, Whiting scored only 2 out of 43 points for its disclosure practices, earning fewer points this year than it did in 2013. In comparison, this year BHP Billiton earned over 40 points and nine other companies earned 20 or more points.
Whiting was cited for 4 violations and 11 spills associated with hydraulic fracturing operations between 2009 and 2013 in Colorado alone (NRDC, Fracking’s Most Wanted, 2015). These violations have increased shareholder concern about Whiting’s operational practices.
Due to Whiting’s poor disclosure performance, investors call for the Company to provide detailed, quantitative, comparable data about how it is managing the risks and reducing the impacts of its hydraulic fracturing extraction operations.
BE IT RESOLVED: Shareholders request the Board of Directors report to shareholders, using quantitative indicators, the results of company policies and practices, above and beyond regulatory requirements, to minimize the adverse environmental and community impacts from the company’s hydraulic fracturing operations associated with shale formations. Such report should be prepared at reasonable cost, omitting confidential information.
SUPPORTING STATEMENT: Proponents suggest the report provide quantitative information for each play in which the company has substantial extraction operations, on issues including, at a minimum:
Quantity of fresh water used for shale operations, including source;
Goals and quantitative reporting on progress to reduce toxicity of drilling fluids;
Quantitative reporting on methane leakage as a percentage of total production;
Percentage of drilling residuals managed in closed loop systems;
Numbers and categories of community complaints of alleged impact, and their resolution;
Reductions in air emissions, including NOx and VOCs; and
Practices for identifying and managing the hazards from naturally occurring radioactive materials.