Fifty five major investment organizations and institutional investors with nearly $1 trillion in assets under management have united to support “best practices” for the fracking of shale gas. These investors are seeking action from the industry due to the persistent, increasing level of uncertainty about fracking, such as spreading moratoria and bans, inconsistent practices regarding chemical disclosure and risk management among companies, and growing shareholder unrest at a reported 16 companies in the last two years.
In December 2011, the Investor Environmental Health Network and Interfaith Center on Corporate Responsibility published Extracting the Facts: An Investor Guide to Disclosing Risks from Hydraulic Fracturing Operations. The well-thought-out report presents 12 core goals for shale gas companies and supporting practices and indicators:
· Manage risks transparently and at board level;
· Reduce surface footprint;
· Assure well integrity;
· Reduce and disclose all toxic chemicals;
· Protect water quality by rigorous monitoring;
· Minimize fresh water use;
· Prevent contamination from waste water;
· Minimize and disclose air emissions;
· Prevent contamination from solid waste and sludge residuals;
· Assure best in class contractor performance;
· Secure community consent; and
· Disclose fines, penalties and litigation.
Smart companies are already going beyond Federal and state regulations in certain areas of their operations - the guide cites practices that are being used by 17 companies. But shareholders are demanding more industry leadership. Still, these excellent voluntary guidelines are not a substitute for strong regulations that apply to all oil and gas companies.