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January 10, 2013
Shareowner Urges End to Natural Gas Flaring
    by Robert Kropp

Mercy Investment Services files a shareowner resolution with Continental Resources, requesting that the oil company reduce or eliminate the environmentally destructive practice of natural gas flaring in its operations.


A shareowner resolution filed by Mercy Investment Services for the 2013 proxy season seeks to end the wasteful and environmentally damaging practice of burning off natural gas as part of the operations of oil company Continental Resources.

The resolution cites a 2012 letter from 37 institutional investors to 21 oil companies, expressing concern that flaring of natural gas in shale oil production, "because of its impact on air quality and climate change, poses significant risks for the companies involved, and for the industry at large, ultimately threatening the industry's license to operate."

Even before the decline in recent years of the price of natural gas, flaring was the typical practice of many oil producers. As early as 2004, the World Bank established the Global Gas Flaring Reduction Partnership (GGFR), primarily to encourage regulation of the practice in major oil-producing countries.

"The gas flared daily in North Dakota, about a third of the state's production, represents enough energy to heat half a million homes," the resolution from Mercy states. "Despite low gas prices, this represents hundreds of millions of dollars in additional potential revenue."

Furthermore, the resolution continues, "Given the considerable controversy that already surrounds natural gas hydraulic fracturing, operational restrictions for shale oil are a very real risk. A lack of aggressive industry action also invites potentially inhibiting regulatory responses."

"The flaring of natural gas is a tremendous economic waste, and it threatens oil developers' license to operate, as well as the environment," said Pat Zerega, Mercy's director of shareholder advocacy. "Our concern over the environmental impacts of flaring continues to grow. Continental should focus on eliminating this wasteful practice."

The resolution requests that Continental Resources "adopt quantitative, company-wide goals, based on current technologies, for reducing or eliminating flaring in all operations and facilities under the company's financial or operational control; and that the Company report to shareholders by December 2, 2013, on its plans and progress towards achieving these goals."

 

 
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