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Saturday, January 22, 2011

Shareholder Groups Want Assurances on Hydraulic Fracturing

Shareholder groups have filed resolutions with major oil and gas companies urging them to disclose their plans for managing water pollution and financial risks associated with hydraulic fracturing (fracking), a technique used to extract natural gas from shale. Resolutions have been filed with companies such as Chevron and Exxon Mobil.  The resolutions are taking aim at the hydraulic fracturign practice that has been blamed for polluting water supplies and land with chemicals.

The Center has developed Hydraulic Fracturing Evaluation Criteria to rate projects.  The Hydraulic Fracturing issue does not lend itself to taking a blanket position 'for' or 'against' the practice. As such, the Center has developed criteria for project by project determinations.  The Center criteria are fairly rigorous, but if a company adheres to them, we believe it will go far in satisfying shareholder groups.  In fact, some of our criteria include some of the same items included in the resolutions.

The shareholder groups include the New York state pension fund, Domini Social Investments, Trillium Asset Management and the Sisters of St. Francis of Philadelphia. The resolutions called on the companies to recycle waste water, disclose the type of chemicals used in the operations and lessen their toxicity.

Fracking utilizes high-pressure water, chemicals and particles are injected deep underground to break up shale formations and release natural gas. Companies are turning to fracking because more-accessible deposits of natural gas have dwindled.

Hydraulic fracturing has caught the attention of regulators and politicians. EPA is conducting a new study of the practice and its effects on groundwater. The Center presented a statement at the EPA hearings on hydraulic fracturing in April 2010. New York state placed a temporary moratorium on new fracking permits and lawsuits have been filed against operations in Pennsylvania. (Wash Post, 1/22/2011)

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