Investors Want More Public Disclosure from Fracking Companies
BISMARK, N.D. - A lot of companies fracking for gas do a poor job of informing the public, according to investor groups. While a just-released scorecard faults Occidental Petroleum for secrecy in some areas, other companies like North Dakota-based Hess scored near the top of the third annual Disclosing The Facts report.
It grades the largest gas producers on disclosure in such areas as water pollution, methane leakage, use of toxic chemicals, and community effects. Danielle Fugere is president with As You Sow, one of the groups behind the scorecard. She says the research found more than two-thirds of the companies were not properly informing investors or local communities.
"Leaks, spills and explosions continue to make headlines," she says. "Even as 70 percent of the energy companies continue to get failing marks."
The scorecard praises Hess for dramatic improvement over last year, even saying it's one of five companies to lead the nation in disclosing information. Meanwhile, Occidental Petroleum is a bit above the middle of the pack.
The investor groups say public disclosure will encourage voluntary use of best industry practices in such areas as water use, waste disposal, leak detection, and traffic and road effects. The industry often cites its economic importance when arguing against government regulation. But Richard Liroff, executive director with the Investor Environmental Health Network, says the companies that choose voluntary disclosure and good corporate citizenship are also enhancing their long-term profitability.
"We hold shares in the companies. We have access to senior management," says Liroff. "We can say, 'Look, here's the business case for doing all these good things that will position the company well competitively, and will also be good for the environment and local communities.'"
The scorecard comes just a few months after Occidental Petroleum announced plans to sell all of its nearly 300,000 acres in North Dakota's Bakken shale formation.