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February 05, 2013

Shareowners Press on with Fracking Campaign
    by Robert Kropp

Nine oil and gas companies face shareowner resolutions this proxy season requesting quantitative reporting of risks associated with hydraulic fracturing and the management of fugitive methane emissions.

SocialFunds.com -- Nine leading oil and gas companiesóCabot Oil and Gas, Chevron, Exxon Mobil, EOG Resources, ONEOK, Pioneer Natural Resources, Spectra Energy, Range Resources and Ultra Petroleumóface shareowner resolutions this proxy season requesting that they quantifiably measure and reduce the environmental and social impacts of hydraulic fracturing, according to Ceres.

The proposals on fracking were filed by a number of organizations, including As You Sow, Calvert Investments, Green Century Capital Management, New York City Office of the Comptroller, The Sisters of St. Francis of Philadelphia, and Trillium Asset Management. The resolution filed with Cabot by the New York State Common Retirement Fund has been withdrawn due to commitments on disclosure made by the company.

Since 2009, when shareowners filed the first of 21 resolutions that by 2010 had gained an unprecedented 40% support, concerns over the impacts of hydraulic fracturing, or fracking, have gone mainstream. Risks associated with contamination by toxic chemicals of community drinking water supplies, the disposal of massive volumes of wastewater, and increased air emissions have been widely covered in the media, threatening the social license to operate of companies engaged in the controversial practice.

Green Century, which filed this year's resolutions with EOG Resources and Ultra Petroleum, coordinates a shareowner campaign on fracking with the Investor Environmental Health Network (IEHN). "Transparency is the first step, but oil and gas companies must now implement quantifiable plans to reduce the impact of their operations on the environment," Leslie Samuelrich of Green Century said.

"State regulations do not provide adequate protection from the adverse effects of shale gas operations," the resolution filed with EOG Resources states. "Shareholders request that the Board of Directors publish a set of systematic policies for tracking and responding to community concerns, reducing the use of toxic chemicals, disclosing violations, and reporting to shareholders, on an annual basis via quantitative indicators, the results of these policies."

"Oil and gas firms face clear environmental and business risks, and general assurances of safety and anecdotes about site-specific actions are not sufficient for investors," said Richard Liroff, Executive Director of IEHN. "Shareholders want to know how companies are systematically tackling environmental risk and community impact concerns and the measurable results of these efforts."

Resolutions addressing fugitive methane emissions from the fracking process were filed with Range Resources, ONEOK, and Spectra Energy by Trillium Asset Management. "Given the high short-term climate impact of methane emissions, it is now an open question whether natural gas can serve as a bridge fuel to a more sustainable energy future," said Natasha Lamb of Trillium. "Companies can and should reduce their emissions using new technologies with positive return on investment."

Last year, an international coalition of institutional investors with $1 trillion in assets under management, led by IEHN, Boston Common Asset Management, and the Interfaith Center on Corporate Responsibility (ICCR) called for the adoption of best practices by corporations engaged in hydraulic fracturing. Also last year, an international coalition of institutional investment organizations with assets under management in excess of $20 trillion called on companies and governments to minimize methane emitted in the fracking process.

"The oil and gas industry must account for its impact on natural resources, the climate and communities," said Mindy Lubber, director of the Investor Network on Climate Risk (INCR) and president of Ceres. "The environmental risks of fracking have bottom-line impacts, and investors are right to be demanding better performance from oil and gas firms."

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