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January 29, 2010
Shareowner Campaign Targets Hydraulic Fracturing by Natural Gas Companies
    by Robert Kropp

Twelve shareowner resolutions ask natural gas companies for transparency about the business and environmental risks of a controversial drilling method.

As concerns over the effects of the natural gas drilling process known as hydraulic fracturing grow, a group of investors, led by Green Century Capital Management and the Investor Environmental Health Network (IEHN) have filed shareowner resolutions with 12 companies, requesting that they increase transparency regarding the environmental impact of the practice, and mitigate risks associated with it.

The companies addressed by the resolutions on hydraulic fracturing include Cabot Oil & Gas Corporation, Chesapeake Energy, ExxonMobil, Hess, EOG Resources, and Range Resources. Shareowner activists have engaged with about 20 companies on the issue.

Hydraulic fracturing is used by natural gas companies to extract reserves from pockets underground. The process requires the injection of as much as 7.5 million gallons of water per well, as well as often toxic chemicals, to crack open rock and allow the natural gas to flow to the surface.

According to a November 2009 report by the Environment America Research and Policy Center, companies are often not required to disclose the chemical make-up of the fluids used in hydraulic fracturing. However, the report states, “The available information from state-required or voluntary disclosures paints a very troubling picture of the toxicity of these chemicals.”

The practice is the subject of legislation currently under deliberation in the US Senate and House of Representatives. The proposed law would require that companies engaged in the practice of hydraulic fracturing comply with the Safe Drinking Water Act by disclosing the chemicals used in the practice.

Larisa Ruoff, Director of Shareholder Advocacy for Green Century Capital Management, said in a statement, “Shareholders believe that through the adoption of best practices and policies to phase out the most toxic chemicals used in this process, companies can ensure that they are both protecting the environment and their balance sheets from unnecessary and potentially devastating risks.”


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