Exxon, Chevron Face Pressure on Fracturing Disclosure

Mike Lee
Thursday, January 20, 2011

(Corrects description of Boston-based group in third paragraph)

Shareholder groups are pressing Chevron Corp., Exxon Mobil Corp. and Southwestern Energy Co. to disclose the risk the companies face from hydraulic fracturing. The groups say they want shareholders to know that the companies could face litigation or fines related to their use of rock-fracturing techniques to find natural gas and oil. They plan to introduce resolutions during the annual meetings of nine companies, calling on them to disclose the chemicals used in hydraulic fracturing.

The Investor Environmental Health Network in Falls Church, Va., helped organize groups of investors to file the resolutions, including the New York State Comptroller’s Office, the Sisters of St. Francis of Philadelphia and Ceres, a Boston- based coalition that directs the $9 trillion Investor Network on Climate Risk.

The same groups, working together as the Investor Environmental Health Network, filed similar petitions last year against 12 oil and gas producers. None passed. More than 20 percent of shareholders voted for the resolutions at some companies, said Richard Liroff, executive director of the Investors Environmental Health Network. “Clearly we’re getting our point across,” he said.

Some landowners have accused gas companies of polluting local water supplies with their fracturing activities. Cabot Oil & Gas Corp. agreed to provide drinking water and put $4.1 million into escrow for families in Pennsylvania who said their drinking water was polluted by the company’s oil wells, settling a claim by the Pennsylvania Department of Environmental Protection.

New York has imposed a moratorium on fracturing horizontal wells until an environmental review is completed. The U.S. Environmental Protection Agency is also conducting a study of fracturing’s impact. Few Problems Morgan Crinklaw, a Chevron spokesman, said the company is reviewing the shareholder proposal. “We believe that hydraulic fracturing is critical to accessing the nation’s natural-gas resources, leading to greater energy security,” Crinklaw wrote in an e-mail.

More than 1 million wells have been hydraulically fractured over the last 60 years with only a few problems, America’s Natural Gas Alliance, an industry trade group, says on its website. Exxon said it supports the disclosure of hydraulic fracturing chemicals, without commenting on the shareholder proposals. “We believe the concerns of community members can be alleviated by the disclosure of all ingredients used in these fluids,”

Karen Matusic, an Exxon spokeswoman, wrote in an e- mail. Southwestern didn’t return calls seeking comment. Exxon and Southwestern have looked for ways to reduce the need for chemicals used in hydraulic fracturing.

To see a complete list of the companies targeted in the campaign, go to: http://www.iehn.org/resolutions.shareholder.php -Editors: Charles Siler, Susan Warren. To contact the reporter on this story: Mike Lee in Dallas at Mlee326@blooomberg.net. To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net.

Related issues: