Investors Ask Oil and Gas Companies To Report Fracking Risks

Investors filed shareholder resolutions with nine oil and gas companies, asking them to report on plans to deal with the risks surrounding natural gas hydraulic fracturing (commonly called ‘fracking’) in the U.S. The risks investors want the companies to report on include chemical use and water contamination. Fracking injects water, chemicals and particles underground to break up shale formations and release natural gas.

As conventional natural gas supplies shrink, companies are turning to methods such as fracking to tap into harder to reach supplies. The Energy Department estimates that recoverable shale reserves are 827 trillion cubic feet, energy equivalent of 140 billion barrels of oil. The American Petroleum Institute estimates that 60 to 80 percent of natural gas wells drilled in the next decade will need fracking.

The nine oil and gas companies investors filed shareholder resolutions with are Anadarko Petroleum Corporation, Cabot Oil & Gas Corporation, Carrizo Oil & Gas, Chevron, El Paso Corporation, Energen Corporation, ExxonMobil, Southwestern Energy, and Ultra Petroleum.

Water contamination in Pennsylvania

The Marcellus Shale is an underground shale development which runs throughout the Appalachian Basin, including Pennsylvania. A survey by geology professors in 2008 estimated that the Marcellus Shale could hold up to 500 trillion cubic feet of natural gas. While oil and natural gas companies reap the economic benefits from fracking operations in Pennsylvania, Pennsylvanians near those operations are dealing with water well contamination.

Thirteen water wells Susquehanna County, Pennsylvania near Cabot Oil & Gas Corporation’s fracking operations have been contaminated, according to the shareholder resolution filed with the company. The contamination resulted in regulatory consent orders, temporary halts to new well drilling, and payment of substantial penalties by Cabot. In October, Pennsylvania environmental regulators banned Cabot from drilling in the state until it plugs three natural gas wells believed to have caused the contamination. Cabot paid a $240,000 fine, and will pay $30,000 per month beginning in May until it meets its obligations to the residents affected.

A lawsuit filed last September by thirteen Pennsylvania families alleges that water wells were contaminated with toxic chemicals due to Southwestern Energy’s fracking operations in Susquehanna County.

Testing of the water well of a family in Pennsylvania’s Washington County near Atlas Energy’s natural gas wells found arsenic at 2,600 times acceptable levels, benzene at 44 times acceptable limits, naphthalene at five times the federal limits, and mercury and selenium levels above limits. Chevron bought Atlas for $4 billion in November.