Oil and Gas Lawyer Blog
A group of environmentally conscious social and investor organizations has produced a report, Disclosing the Facts: Transparency and Risk in Hydrualic Fracturing Operations. The report grades companies on how well they report risks attendant to operations in the major US shale plays.
The report is a collaboration of four organizations: As You Sow, Boston Common Asset Management, Green Century Capital Management, Inc., and The Investor Environmental Health Network. It was made possible by grants from several foundations, listed in the report.
The report assesses the public disclosures of 24 oil and gas companies on their quantitative reporting in five areas of environmental, social and governance metrics: toxic chemicals, water and waste management, air emissions, community impacts, and management accountability. Each company is graded on these metrics based on how well they measure and disclose, quantitatively, their performance in these areas. The grades are based solely on publicly available information provided by the companies. Example criteria:
- Does the company report its use of diesel fuel and TBEX in frac fluids?
- Does the company report its testing of water wells within a specified distance of a new well before and after drilling?
- Does the company report its percentage of flowback water reuse, its total water use, and its water use intensity?
- Does the company report the extent to which it uses closed-loop systems to manage drilling fluids?
- Does the company report the percentage of “green completions” (capturing natural gas produced during drilling rather than releasing or flaring the gas)?
- Does the company track community impact concerns (road damage, traffic congestion, etc.)?
The idea behind the report is to convince companies (and their shareholders) that monitoring and reporting of environmental and social impacts is good for business. It is a follow-up to an earlier report, Extracting the Facts: An Investor Guide to Disclosing Risks from Hydraulic Fracturing Operations, by The Investor Environmental Health Network, in 2011.
The highest scoring company was Encana, with a score of 14 out of a possible 32.
The report contains many good links to other reports and information. For example:
Resources for the Future, “The State of State Shale Gas Regulation” (2013): http://www.rff.org/RFF/Documents/RFF-Rpt-StateofStateRegs_Report.pdf
Model regulations for chemical disclosure and strengthening well drilling and completion practices, developed in collaboration with Southwestern Energy and the Environmental Defense Fund: http://portal.ncdenr.org/c/document_library/get_file?uuid=8356eb89-9c9f-4f8e-bb4d-4bb51b605575&groupId=8198095
George King, “Hydraulic Fracturing 101: What Every Representative, Environmentalist, Regulator, Reporter, Investor, University Researcher, Neighbor and Engineer Should Know About Estimating Frac Risk and Improving Frac Performance in Unconventional Gas and Oil Wells” (Society of Petroleum Engineers Paper SPE 152596 (2012)
http://FracFocus.org/sites/default/files/publications/hydraulic_fracturing_101.pdf.