Shareholder groups join opponents of fracking

[irishbobcat]

Shareholder groups join opponents of 'fracking'
Sunday, January 23, 2011  03:08 AM
By Michael Rubinkam

ASSOCIATED PRESS

ALLENTOWN, Pa. — Activist shareholder groups want energy companies to do a better job of reducing the risks of hydraulic fracturing, the drilling technique that has unlocked vast stores of previously inaccessible natural gas while raising concerns about environmental contamination.

Investors announced Friday that they have filed resolutions with nine oil and gas companies that use hydraulic fracturing, or "fracking," to extract gas from shale formations thousands of feet underground. The proposals ask drillers to explain how they plan to manage the potential environmental consequences of fracking, and to go "above and beyond" existing regulatory standards. The resolutions also demand a reduction in the volume and toxicity of chemicals used in fracking; improvements in well construction; and increased recycling of toxic wastewater.

Recent technological advances have allowed drillers to reach gas reserves in the gigantic Marcellus shale — a rock formation beneath Pennsylvania, New York, West Virginia and Ohio — and other shales in the U.S. for the first time.

Energy companies combine horizontal drilling with fracking, in which millions of gallons of water, along with sand and toxic chemicals, are blasted underground to break up the rock and release the gas. The U.S. Environmental Protection Agency plans a study of its environmental and health consequences.

The activist shareholders say drillers need to become more transparent about their operations and reduce water, air and soil pollution.

"Oil and gas firms are being too vague about how they will manage the environmental challenges resulting from fracking," New York state Comptroller Thomas DiNapoli said in a statement.

DiNapoli manages the state's public-worker pension fund, one of the investors that filed a resolution to be voted on by shareholders of Carrizo Oil & Gas Inc. and Cabot Oil & Gas Corp. The fund's stakes in the two drillers are valued at nearly $35 million.

The state of New York has declared a moratorium on fracking to allow state regulators to issue new guidelines for shale gas extraction.

"The risks associated with unconventional shale-gas extraction have the potential to negatively impact shareholder value," DiNapoli said. "I urge companies working in this field to share their risk-mitigation and management strategies with investors and the public."

The American Petroleum Institute said fracking is already "carefully regulated" by the states.

"These kinds of resolutions could interfere with use of a tried-and-true technology that promises thousands of new jobs and vast and indispensable supplies of clean-burning energy," institute spokesman Reid Porter said.