The use of natural gas as an energy source is likely to grow. A Massachusetts Institute of Technology study released last year projected that the commodity would boost its share of the nation's energy market to 40% by 2050, up from the current 24%.

A Shale Tale
The Marcellus runs under most of West Virginia, roughly 60% of Pennsylvania and a large chunk of New York state. It also laps into eastern Ohio, western Maryland and the extreme western edge of Virginia. Named after a distinctive rock outcropping at Marcellus, N.Y., near Syracuse, the total area is roughly 95,000 square miles. By contrast, the country's largest natural gas field in terms of production, the Barnett field in the Dallas-Fort Worth area, is only about 5,000 square miles.

Marcellus drilling started to take off in the middle of the last decade. For now, activity is centered in Pennsylvania, the birthplace of the modern petroleum industry where Edwin Drake drilled the first commercial oil well in Titusville in 1859. One reason for Pennsylvania's pre-eminence is that the state's shale has greater amounts of organic matter that--through the slow process of geologic alchemy--morphed into natural gas. Another reason is that Pennsylvania remains the lone major gas-producing state to not hit drillers with a severance, or extraction, tax. Supporters of the tax say it's a logical way to help plug a gap in the state's yawning budget deficit.

But a wider debate centers around fracking's potential impact on water quality. After gas migrated from a Cabot Oil & Gas well in Dimock Township, Pa., in April 2010, the state made the company pay a $240,000 fine and install water treatment systems in 14 homes where water contamination occurred, and the state barred the company from drilling new wells in the township for a year.

Last June, after a blowout of an EOG Resource Inc. well that reportedly spewed gas and wastewater for 16 hours, Pennsylvania halted the company's operations in the state for 40 days and levied fines of $353,400. And in August, the state fined Atlas Resources more than $97,000 after fracking fluids overflowed a wastewater pit and contaminated a nearby watershed.

More recently, a blowout at a Chesapeake well in northeast Pennsylvania this past April caused thousands of gallons of chemical-laced fracking fluid to spew from the site for about a day. In response, the company voluntarily supsended all well completion operations in the state while it investigated the incident.

Chesapeake's drilling operations have racked up so many citations in the Marcellus that Harrington Investments, a Napa, Calif., asset management firm focused on socially responsible investing, in March divested all of its 56,025 shares of Chesapeake stock, valued at the time at about $1.9 million. "One of our screens is if a company continues to violate EPA standards, we have to divest the company," says Dale Wannen, a portfolio manager at Harrington.

Wannen says Harrington is searching for other natural gas companies to invest in. "The whole hydraulic fracking issue is a big concern of ours," he says. "We're still looking, but we haven't found a company yet we'd invest in."

Larisa Ruoff from Green Century Capital Management says her company started tracking fracking in 2009. It filed its first shareholder resolutions the following year and enlisted the help of the Investor Environmental Health Network (IEHN), a partnership of investment managers concerned about the financial and public health risks associated with corporate toxic chemicals policies.

The shareholder campaign seeks better disclosure about the business, regulatory and environmental risks of natural gas hydraulic fracturing by seeking adoption of best management practices in the areas of recycling and reusing waste waters, reducing the volumes and toxicity of chemicals, disclosing the chemicals used in fracking operations and ensuring well integrity.