Royal Dutch Shell's announcement today that it will buy closely held East Resources Inc., a natural gas explorer that's been very actively working in the Marcellus Shale region of New York and Pennsylvania, highlights the intense and rapidly growing interest in shale-gas production. The problem is that multinationals with deep pockets like Shell and Exxon could accelerate these explorations even more, before stakeholders get the answers they want on the impact to the environment, including potential threats to drinking water and public health.
According to the Investor Environmental Health Network, 12 shareholder resolutions have been filed this year seeking more disclosure on natural gas hydraulic fracturing, which shoots chemicals and vast amounts of water underground to fracture shale so gas can be released. Environmentalists say there is virtually no disclosure on the chemicals used in hydraulic fracturing, or fracking, and point to instances of contamination.
The companies that use fracking say the process has been used for years and is safe. However, the process hasn't been used on the grand scale that we're going to see in coming years.
Larisa Ruoff, director of shareholder advocacy for Green Century Capital Management, which has sponsored some of the shareholder resolutions, notes that six of them have or will go to a vote this proxy season. Four of those votes have already happened at Cabot Oil & Gas, EOG Resources, Williams Companies Inc. and ExxonMobil. While none of those resolutions got majority votes, 42% of shareholders supported the Willams' proposal. Ruoff says she recently learned from RiskMetrics Inc. that the Williams' results put the resolution among the group with the top ten highest votes for a first-year proposal related to the environment. Other upcoming votes on fracking resolutions are scheduled at Chesapeake Energy on June 11 and Ultra Petroleum on June 14.
With the devastation and unknown long-term impacts adding up off the coast of Louisiana as a result of the BP oil spill, it is essential for this country to implement much more stringent rules and require extensive disclosure from companies whose operations could pose threats to the environment and our health.