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The Oil and the Glory
The shareholder challenge to the natural gas revolution
It’s been clear for awhile that the hydraulic-fracturing industry must get in front of the moving train of public opinion, and show that the natural gas extraction method is as safe as it claims. If it does not, such as by proactively disclosing the ingredients of the cocktail of chemicals in frakking fluid, it could ...
It’s been clear for awhile that the hydraulic-fracturing industry must get in front of the moving train of public opinion, and show that the natural gas extraction method is as safe as it claims. If it does not, such as by proactively disclosing the ingredients of the cocktail of chemicals in frakking fluid, it could face PR problems worse than have befallen BP, only unlike the British oil company the frakking folks can’t run and hide in Russia. But a slew of resolutions against the companies by their own shareholders shows that time may be running short to effectively carry out such a voluntary public-relations exercise.
Natural gas has been the biggest story in energy over the last couple of years — so much of the fuel is sloshing around the globe that it is shaking up geopolitics, along with the climate change calculus: Russia is much friendlier because of the gas, and power-generation could become much cleaner. But this shift has always been on shaky ground — it is founded largely on the fresh availability of gas in the United States due to frakking, in which water laced with chemicals and sand is forced through shale, thus releasing the gas contained within. There has been an essential tension between frakking enthusiasts and the communities where it’s done. Last year, for example, documentary maker Josh Fox won a prize at the Sundance Film Festival for Gasland, a powerful takedown of frakking.
One of the key accusations is that frakking contaminates ground water, which the companies say is not the case as long as the work is done right. Critics have said assurances are all well and good, but have sought disclosure of what’s in frakking fluid. Almost all the companies refuse to disclose the ingredients on the grounds that doing so would put them at a competitive disadvantage.
The way PR best works is that you recognize a potential or glaring weakness before the public does, and make it into a strength. In this case, the companies might want to very publicly agree to the disclosure request before they face the super-disadvantage of being banned from frakking.
As it stands, the state of New York has been the most aggressive against frakking. This is important because New York lies above the Marcellus Shale, which appears to be the largest shale gas reserve in the United States. But last year, New York placed a moratorium on drilling in areas providing water for the city of New York, and last week, the state’s $133 billion pension fund filed shareholder resolutions asking two companies — Cabot Oil & Gas and Carrizo Oil & Gas — to show first-rate plans for preventing an accident.
Last Friday, shareholder groups filed resolutions against nine companies drilling in the Marcellus (list of shareholder resolutions), including Chevron and ExxonMobil, attempting to force them to reveal the contents of their frakking fluid.
Exxon is among those appearing to understand the landscape. It released the following statement: "ExxonMobil supports the disclosure of the identity of the ingredients being used in fracturing fluids at each site. While we understand the intellectual property concerns of service companies when it comes to disclosing the proprietary formulations in their exact amounts, we believe the concerns of community members can be alleviated by the disclosure of all ingredients used in these fluids." The statement did not, however, include a list of its frakking ingredients.